Home Blog


Top 3 Benefits of Human Resources Outsourcing

Posted by Stacey Jones


Aug 13, 2019 9:00:00 AM

adult-asking-blur-630839Outsourcing is a more popular choice than ever. More companies are choosing to team up with experts for the delivery of everything from IT services to accounting.

Outsourcing makes sense for an international company operating in several different countries. Each country will have different regulations about how your business performs certain tasks. In many cases, it’s beneficial to have on-the-ground service from a provider in that country.

Human resources outsourcing is one of the more desired options for companies with global reach. If you’re thinking about expanding, you may wonder if you should send your HR functions to a partner provider. These top three benefits should convince you that it could be the right move for your business.

1. Human Resources Outsourcing Saves Time and Money

The top reason any business leader decides to send a service to a partner is because it saves time and money.

It’s easy to see how HR outsourcing can do just that, especially for an international firm. Tasks like payroll and compliance monitoring are ongoing, which means you must continue administering them. These jobs eat up your HR team’s time, especially if your team isn’t familiar with the rules and regulations in another market.

Take a look at payroll. Differences between US payroll and Canadian payroll trip employers up repeatedly. The result is penalties, as well as a frustrated HR team who spends more time on this task than they need to.

When you decide to outsource, you partner with an expert team. They already know the ins and outs of providing payroll or employee management in your chosen market. With their knowledge in hand, administering payroll or calculating vacation pay becomes a breeze. Your HR team saves time, frustration, and money.

2. Outsourcing HR Provides More Flexibility

For global companies, “flexibility” has become more than a buzzword. It’s integral to your survival in a hypercompetitive international market.

Flexibility allows your company to go with the flow, responding swiftly to the market’s ever-changing demands. When you outsource HR, you bring that same flexibility to your personnel and employee management.

Your team can be as lean as you need, and the right HR team in your corner helps you both find and keep the talent you require to compete on the global stage. Better management helps you streamline your HR offerings and deliver more of what your employees expect of you.

Finally, your HR team itself becomes more flexible and adaptable. If you require more help during tax season, it’s easy to add the hands you need.

3. Outsourcing Gives Employee Satisfaction a Boost

Many of the benefits of HR outsourcing are focused on how the service directly aids the company. Have you thought about the impact it has on your employees?

An HR provider usually offers better, more efficient HR service, which can help keep your employees happy. The provider could help you administer benefits. Some providers will not only assist you in locating talent, but they’ll work with you to create employee development plans as well.

More efficient delivery of HR service also keeps your employees satisfied. They’ll know about changes to policies, and payroll will be done correctly and on time. Benefits, learning opportunities, and even workers’ compensation become more transparent.

Finally, working with an HR provider helps global companies improve HR communication with their team. Therefore, your employees will be more satisfied, as they know they will get clear answers sooner.

All of this adds up to employees who not only stick around longer, but who give you their all. When they arrive in the office, you know they’re ready to give you 110 percent.

Find the Right HR Outsourcing Partner

If you want more flexibility, happier employees, and a more efficient HR team, it’s time to talk to the experts. Discover how the right human resources outsourcing solution can help your company succeed on the global stage.

Topics: Outsourced HR Management, human resources, Outsourcing HR

Global Companies: 5 Things to Keep in Employee Files in the US

Posted by Karen McMullen


May 6, 2019 9:00:00 AM

Global Companies 5 Things to Keep in Employee Files in the USHiring and employment often present concerns for global employers. How do you let someone go? How can you find the right people for the job? What are your tax responsibilities as an employer, and how do you make sure you’re not misclassifying your workers?

Request a quote for US payroll services today!

There are many nuances in this area, including documentation and employee files. You might be wondering what you need to keep in your files. Employing workers creates plenty of paperwork, but do you need to keep everything?

If you keep these five records, you should be well on your way to satisfying most requirements.

1. Global Companies Must Keep Files Relating to Job Performance

You’ll want to keep documents related to the employee’s job performance in their file. This includes records of evaluations and commendations.

These documents are important, particularly if an employee or ex-employee decides to file proceedings against you. Evaluations can show a record of the employee’s performance, which can help establish a pattern of behaviour in a courtroom situation.

2. Tax Documents Are Also Important

Global companies may feel overwhelmed by the number of tax forms they need to fill out or have their US employees complete. Not only are these important to complete, but it’s important for you to keep them on record.

At minimum, you’ll want to keep a copy of the employee’s Form W4 on file. This document allows you to collect and withhold taxes on the employee’s behalf. Employees should be permitted to periodically review and amend the form, which can be difficult if you don’t have it on file.

3. Records Pertaining to Discipline and Complaints

It’s also important for global companies to keep formal documentation of poor employee behaviour, disciplinary actions, and complaints from co-workers or customers. All these files can be presented as evidence in court.

They may also assist you in determining whether to keep on an employee or let them go. If corrective measures have been taken, but the employee’s behaviour doesn’t improve, it might be time to let them go.

4. Information about Compensation

You’ll also want to file records around notices of raises. You should supply employees with written statements of their raises, but you will want a copy in your files as well. This can serve as evidence if the employee lodges a complaint.

Benefits are also a form of compensation, and you’ll want to those records as well.

Be sure to explain to employees what their compensation consists of, and have them sign a form indicating they’ve read and understood the information.

5. Documents about Hiring and Departure Should Be Kept

Your employee file should open with a description of the job, as well as the employee’s resume and application. You should also include your formal offer of employment.

You’ll need to retain records for some time after an employee departs, so be sure to add documents to their file. Other documentation, such as exit interviews and records that clearly state the reasons an employee parted ways with the company, are important to keep on file. As with paperwork mentioned earlier, these items can serve as evidence if a complaint arises.

With these basics in hand, global companies can build better personnel files for their US employees.


Topics: human resources

5 Tips to Manage Currency Fluctuation Adjustments & Salaries

Posted by Shannon Dowdall


Feb 27, 2019 9:00:00 AM

5_Tips_to_Manage_Currency_Fluctuation_Adjustments_&_SalariesIf your business has international operations, you’re likely all too familiar with the uncertainties of the exchange rate. Today, the exchange might be high, but tomorrow, it might take a tumble. Your buying power can increase and decrease at the drop of a hat.

12 Things an American Company Looking to Pay a Worker In Canada Needs to Know

Managing these currency fluctuations is particularly important when it comes to paying your international employees. Here are a few tips you can use to manage these changes in the value of currency as you continue to employ and pay people in international markets.

1. Consider Paying in the Local Currency

One issue employers sometimes face is the question of which currency to pay in. Many favour paying in their own currency versus the local currency. This is often the case for employers backed by a relatively stable currency, such as the US dollar.

Almost every other currency experiences volatility, although to varying degrees. The Canadian dollar, for example, has been weak against the US dollar for some time now, although there was a period when Canadian currency achieved parity with the US dollar. The euro is traditionally very strong, but economic crises in Greece, Italy, and other EU countries have affected the exchange rate. Brexit has been predicted to cause fluctuations in the pound and the euro alike.

Paying in the local currency often isn’t attractive for the employer because its value against the home currency may increase or decrease. Nonetheless, it keeps your employees’ wages stable against these changes.

In some countries, you’ll be obligated to pay in the local currency by law. Always check the regulations to ensure compliance. Even if you’re allowed to pay in another currency, it’s sometimes a better idea to pay in the local currency.

2. Keep an Eye on Inflation

Inflation erodes the buying power of currency within its home economy. Argentina in 2018 provides an excellent example. Consumer prices increased over 47 percent.

What does that mean? If you paid your employees one Argentine peso, they could buy 47.6 percent less with it in 2018 than they could in 2017. Their salary is worth less than it is on paper.

One way to deal with this is to issue bonuses or adjustments on a regular basis. You may opt to do this annually or even quarterly to keep pace with inflation. This allows your employees’ wages to maintain their buying power.

3. Work with an Experienced Partner

What else can you do to ensure you’re dealing with currency fluctuations adjustments properly? Perhaps your best option is to work with an experienced partner. This partner is often familiar with the market and the country you’re operating in or looking to expand to. They can advise you on law and compliance, as well as help you monitor matters of currency.

Professional employer organizations have already helped other companies like yours through currency fluctuation adjustments, and they know the best way to handle them.

4. Choose What to Protect

If you offer your employees packages, such as healthcare benefits or assistance with the costs of living, you’ll need to choose what elements of this package to protect.

Protecting salary is usually a good choice. You may decide to let the value of other benefits you’re providing erode in order to keep employees’ salaries in line with inflation.

5. Establish a Guaranteed Exchange Rate

Another thing you can consider doing if you want to protect against currency fluctuation adjustments is to establish a guaranteed exchange rate for your employees. This can protect against small fluctuations in the market, but it poses a larger risk if the currency experiences extremes.

If you’re not sure what your best option is, get in touch with the experts at a professional employer organization in the US or Canada. We can help you evaluate the situation and determine the best solution for your business.

What Are You Leaving to Chance by Handling Payroll on Your Own

Topics: human resources

5 Talent Retention Strategies When Your Employees Are in a Different Country

Posted by Ray Gonder


Jan 16, 2019 9:00:00 AM

5_Talent_Retention_Strategies_For_When_Your_Employees_Are_in_a_Different_CountryIt’s often said that your people are your biggest asset. Although some people disagree with this idea, the importance of human capital to your business can’t be understated. In fact, some people go to the opposite extreme, suggesting the only thing that sets you apart from your competitors is your people.

Download "7 Challenges Companies Face When Expanding into the US" eBook

Once you’ve gone to the work of hiring someone, you want to make sure they stay on your team. After all, you spent time considering why they were the right fit for your organization. If they leave soon after, it will cost you in many ways.

In the current market, it’s also more difficult to replace talent. Talent shortages have started cropping up in some markets, and falling unemployment rates in places like Canada and the United States have meant there are fewer people searching for jobs.

You have plenty of reason to retain the people you’ve already hired. Doing so can be difficult, even when you’re overseeing the day-to-day operations in the office. What happens when your employees are in another country altogether?

These five talent retention strategies will help you keep international employees on your roster.

1. Trust Is the Basis of All Talent Retention Strategies

If you want your employees to stick with you, you have to show you trust them. While this is true for all employers, it’s particularly true when your employees are located in a different country.

If you’re constantly checking in or smothering employee attempts at independence, your employees will quickly become dissatisfied and move on. Treat your employees like the talented, intelligent professionals they are. Allow them to exercise some of their better judgement.


2. Give Employees Room to Grow

One way to demonstrate your trust in an employee is to invest in their career development and growth. Sign them up for a workshop on improving their sales skills or assist them by providing a mentor.

You can also assign employees to new tasks. This challenges them to continue learning. It also demonstrates that you have faith in their ability to master new skills and succeed in an expanded role or with new responsibilities.

3. Focus on Communication

How do you communicate with your employees, particularly those who are located in another country?

Communication should be a key pillar of your talent retention strategies. Focus on how you talk to your employees. You should ask them to voice their concerns or offer feedback. Encourage them to table new ideas.

You need excellent communication with those employees living and working in another country. They’re the only ones who can tell you what’s happening in the business and what they’re seeing on the ground. Fostering open and honest communication helps employees feel valued.

4. Respect Cultural Differences

One big stumbling block for international employers is adjusting to local expectations and cultural norms. Even Canada and the US have quite different business cultures.

Take, for example, communication standards. Americans are more likely to value being concise and direct. Canadians prefer small talk and consensus building. They’re more likely to see it as polite. This can sometimes cause animosity and confusion. Americans may want their Canadian counterparts to get to the point, while Canadians can sometimes see American-style missives as borderline rude.

Keep these sorts of cultural differences in mind whenever you deal with employees in another country. Being aware of differences and adjusting for them will help your employees feel more like part of the team.

5. Give Employees a Sense of Purpose

Today’s workforce is looking for meaning in work. They want their work to have a purpose, even if it may not change the world. Help your employees build a sense of purpose, and they’ll be more likely to stick with your company for the long term.

Talent retention strategies are wide and varied. These few can help you work towards higher retention for your international operations.


Topics: human resources

5 Ways to Mitigate Human Capital Risk When Employing in North America

Posted by Ray Gonder


Jan 9, 2019 9:00:00 AM

5_Ways_to_Mitigate_Human_Capital_Risk_When_Employing_in_North_AmericaWhether you’re a Canadian business owner looking to hire American employees or an American manager staffing a Canadian expansion, you know exactly how much stock your organization places in your people. Human capital is often one the biggest assets any company has. In fact, many experts now theorize people are one of the only things that set organizations apart from their competition.

Download "7 Challenges Companies Face When Expanding into the US" eBook

As with anything in business, building and maintaining human capital comes with risks. People you’ve spent years training may decide to leave. Hiring a new person has inherent risks. There are also risks associated with labour laws and compliance, some of which can turn into costly legal matters. Accidents and injuries are other risks.

These five methods can help you manage and mitigate some of the risks associated with human capital in North America.

1. Plan Ahead for Risks

The first thing you should do is identify the risks associated with your human capital on both sides of the border. What are the costs associated with an unmotivated or disengaged employee? What are the risks of hiring someone who isn’t the right fit?

Keep in mind that risks extend beyond hiring and dismissing employees. Many accidents and injuries take place in the workplace, which pose risks to you in terms of talent loss and legal costs.

Don’t wait for the worst to happen. Instead, identify the risks and create a plan to deal with them as they arise in the business.

2. Foster a Positive Workplace Culture

Many of the human capital risks for North American businesses involve employee behaviour. A disengaged employee is a flight risk, but they might also engage in unethical behaviour. Employees who are under pressure to perform may not act ethically either. Still other employees may abuse positions of power.

You can avoid many of these problems by building a positive work culture in your organization. Determine your values and communicate them to employees. Then walk the walk. If you say you value employee feedback, be sure to collect it and act on it.

Put some emphasis on valuing your people, and, in return, they’ll value your company.

3. Change How You Conceptualize Risk

While the traditional HR approach to managing human capital risk is solid, you might want to take cues from some of the other divisions in your organization. How does the IT department approach risks? What about the financial division?

One way to see risk is not as a risk, but as an opportunity to optimize uncertainty. You don’t know which employees will be star performers and which ones won’t quite fit the bill when they start. Take steps to manage this uncertainty. In doing so, you’ll increase the chances you’ll find more star performers.

4. Use Data to Inform Strategies

You collect workforce data; put it to good use. Don’t just collect it. Instead, organize and analyze it.

By doing so, you can discover the insight you need to make better decisions. Determining where your risks are can provide you with the knowledge you need to develop a better risk management strategy.

5. Work with the Experts

Human capital risk management across borders comes with many challenges. You may not be familiar with the local labour market, for example, or you might not be familiar with regulations around the hiring process.

Working with experts on either side of the US-Canada border can help you manage your risks more effectively. It’s particularly helpful when you’re navigating the legal waters around your HR operations.

These tips can help you reduce and mitigate various human capital risks in your operations. By doing so, you’ll set up your company to grow its human capital and succeed in almost any market you enter.


Topics: human resources

Canada Hiring Basics for International Companies

Posted by Anna Mastrandrea


Dec 31, 2018 9:00:00 AM

Canada_Hiring_Basics_for_International_CompaniesAlthough Canada is a smaller market than the US, it shares many similarities with the American market. Canadian and American cultures often follow similar sensibilities, and the logistics of shipping products around a geographically enormous area are as present in Canada as they are in the US.

Download "What Are You Leaving to Chance By Handling Payroll on Your Own" Guide

If you want to expand into Canada, however, you’ll probably want to hire a few Canadian staff members to help with the expansion. As with all countries, Canada has its own employment law. Hiring here can pose challenges for international employers. That’s why it’s important to start with the basics.

Canadian Employment Is Contractual

This particular fact can be difficult for American employers and those from countries where “at will” employment is legal. In Canada, there is no such thing as “at will” employment.

All employment in Canada is considered contractual, which means contract law applies. If one party seeks to break the contract, there are certain protocols to be followed.For this reason, it’s best to lay down the terms of employment in a written contract.

If there is no written contract, then courts may impose obligations on you as the employer. You can create limited-term contracts.

Canadian Labour Law Has More Protections and Worker Entitlements

Employers from European countries may find Canadian labour law lax in terms of protections and rights for workers. American employers and those from other parts of the globe, by contrast, may find the rules in Canada to be more demanding.

A good example is paid parental leave. Canadian labour law offers up to a year of paid parental leave, in addition to laying out other paid and unpaid leaves. Employers, for example, must give workers bereavement leave.

There Are Provincial Differences in the Rules

Work hours, minimum wage, overtime, and even holiday pay and vacation time are governed by provincial laws. You’ll need to be familiar with the requirements in every province you operate in.

Federal law applies across the country, but it is only applicable to federal employees.

This means minimum wage in Ontario is different than minimum wage in Alberta. It also means Saskatchewan and Quebec can have different formulas for how to calculate vacation time, and even for which holidays workers are entitled to.

The rules in any province can be complex, so it’s best to work with an expert team to navigate them.

Ending Employment Can Be Difficult

Since Canadian employment is considered contractual, it can be difficult to end employment arrangements. In Canada, employers usually need what’s termed just cause to end employment.

This is a protection against discrimination. A just cause might be downsizing your operations. It might also be poor performance on the employee’s part. It’s your responsibility to prove that letting someone go is the only choice.

You’ll also need to observe notice periods. The longer an employee has worked for you, the more notice you’ll need to give them. If you can’t give notice, you’ll be required to pay severance.

Protecting Identities and Information

The Canadian Charter of Rights and Freedoms entitles Canadians to live their lives free of discrimination on a number of grounds. During the hiring process, you’ll need to be careful of bias and discrimination. There are certain questions you can’t ask, for example, such as whether a person is married.

You’ll also need to be clear about what information you collect from employees, how it’s stored, and how it’s used within your company.

As you can see, Canadian employment law is quite different from US labour law or that of any other country. If you need a hand navigating these tricky legal waters, don’t hesitate to reach out.

What US Companies Need to Know about Paying Employees in Canada

Topics: human resources

Do You Understand the Canadian Employee Dismissal Process?

Posted by Ray Gonder


May 30, 2018 9:00:00 AM

Do-You-Understand-the-Canadian-Employee-Dismissal-Process-compressorUnderstanding the laws where your business operates is integral. When you follow the rules, you’ll be able to ensure you avoid legal battles, as well as continue to grow and achieve your business goals. 

12 Things an American Company Looking to Pay a Worker In Canada Needs to Know

This is particularly important when it comes to employment legislation. These laws govern how you deal with your employees, including hiring, contracting, and even dismissing people. The laws are designed to protect workers. Without them, companies could easily violate people’s rights. Even with these laws in place, human rights are sometimes violated by businesses, often unwittingly. 

In places like Canada, where the Charter of Rights and Freedoms and the UN Declaration of Human Rights are entrenched, the laws surrounding employment can be quite robust. For this reason, it’s important you understand the Canadian employee dismissal process.

The Employee Lifecycle

Employment law generally extends to the entirety of the employee lifecycle. For example, employment law may legislate the kinds of questions an employer can and can’t ask during an interview. Generally speaking, discrimination during the hiring process is illegal in Canada. If a job candidate feels they weren’t considered for a job due to discrimination or bias, they can bring a suit against your company. 

Employment law also governs how you treat your employees during the time they work for you. It may dictate things such as paid and unpaid breaks, shift lengths, duration between shifts, vacation time, overtime, and more. 

Typically, employment legislation also extends to the process of dismissing an employee. This is the end of the employee lifecycle. If an employee is not dismissed, they may decide to quit or retire. These actions also represent the end of the employee lifecycle.

Reasons for Dismissal

The first thing you should know about dismissing an employee in Canada is that you must have a reason to do so. This comes back to concerns about discrimination and human rights. For example, it is illegal for an employer to dismiss a female employee because she decided to have a child. 

Grounds for dismissal are usually more objective. You may have concerns about the employee’s ability to do the job. An employee who has been warned repeatedly about absenteeism may be dismissed if there are no legitimate reasons for their absence, such as illness or familial leave.

Giving Notice

When you dismiss an employee, you must give them proper notice. The federal law, which governs only federal employees in Canada, suggests dismissed employees must be given a minimum notice of two weeks. This law varies among provinces. The length of notice is often related to the length of tenure. 

For example, in Ontario, an employer must give two weeks’ notice to an employee who has worked for them for two years. An employee who has worked for an employer for three years receives three weeks’ notice, and an employee who has worked for you for eight years would receive eight weeks’ notice of the dismissal.

When You Can’t Give Notice

Sometimes, you’re not in a position to give enough notice to an employee in accordance with the law. Perhaps head office gave you short notice about dismissals happening two weeks from now. Some people affected have worked for you for many years. In another scenario, an employee who has been problematic may not be someone you wish to have back in the office, so you dismiss them without proper notice. 

In these cases, you have the option to pay the employee for the notice period. If you can only give an employee of eight years two weeks’ notice, you’ll need to compensate them for the remaining six weeks of notice they should have received. Again, the law varies among provinces, so be sure to check specific requirements where you operate.

A Probation Period

The other exception the law makes is a probationary period, usually the first three months of an employee’s tenure with your company. In this situation, you can dismiss the employee with relative ease. Notice and compensation requirements do not apply to employees during their probationary period. 

Understanding these rules will help you avoid penalties and negative consequences when it comes to dismissing employees. Dismissing an employee is never an easy task. Doing it the right way and in line with the law makes it a little easier.

12 Things an American Company Looking to Hire a Worker in Canada Needs to Know

Topics: human resources

Is It Possible to Hire Canadian Employees for My American Business?

Posted by Karen McMullen


May 25, 2018 9:00:00 AM

Is_It_Possible_to_Hire_Canadian_Employees_for_My_American_BusinessYou’re hiring for an American company. You’ve just seen the best resume in the bunch and you’re convinced you need to hire this person to do the job. They have all the right skills, the right education, and a lot of experience. You may have even had a phone interview with them.

12 Things an American Company Looking to Pay a Worker In Canada Needs to Know

There’s just one problem. This person is a Canadian. Can you actually hire Canadian employees for an American business?

The Simple Answer

The easy answer to this question is “yes.” You absolutely can hire Canadian employees for an American business. You’ll want to be aware of the implications of making this hire. There are also a few different situations in which it’s appropriate to hire Canadian employees. There are also some situations when it isn’t possible to hire Canadian employees.

While the simple answer is yes, there are many factors you must consider.

Operating in Canada

If your business is operating in Canada, it is most certainly acceptable and possible to hire Canadian employees. In fact, it’s probably expected, especially if you have physical locations in Canada. It would be difficult to hire American employees to staff a retail store in Yellowknife, Northwest Territories.

You’ll want to pay close attention to the differences in employment legislation and payroll in Canada. You may even want to engage an employer of record to act as the employer for your Canadian employees. The employer of record knows the ins and outs of Canadian payroll and human resources legislation, so they can make managing your Canadian workforce much more streamlined.

Hiring on a Visa

An American firm can opt to sponsor a Canadian worker to be employed by the company. This usually involves obtaining a visa or work permit for the Canadian employee. This allows them to legally work in the United States. Without one, they cannot work for you legally.

There are several different classes of visa your Canadian employees could apply for. A common one is the TN1 visa, which is sponsored under NAFTA legislation. With this visa, you can invite qualified professionals in several different occupations to work for you in the US.

There are some requirements, such as having the right education and relevant experience. Workers filling some roles, such as a construction labourer, wouldn’t be eligible for a TN1 visa. You’ll also need to provide an offer of employment.

Remote Workers and Contractors

With the advancements of technology, it’s now possible to have employees located all around the world. You can absolutely hire a Canadian to work remotely for your company. In many cases, you’ll structure this type of employment as contractor work. Rather than hiring the person on as an employee, they’ll render services for you and bill you for them. You’ll still need to fill out and file paperwork, such as a W-8 BEN. You may need to withhold taxes from contractors as well.

If you hire someone to work remotely as an employee, the situation can become somewhat more complex. You may want to consider working through an employer of record or talk to a lawyer before you hire this person. There may be certain situations when it’s preferable to hire a Canadian, and there may be situations where it isn’t advantageous for you.

Is It Right for the Business?

Before you hire a Canadian employee for your American business, consider whether it’s the right move. If the person is truly the best-qualified or you need someone on Canadian soil, then hiring a Canadian might make the most sense. In other cases, the red tape and paperwork could make it less advantageous.

Each situation will be unique, but in most cases, it will be possible for an American company to hire Canadian employees. If you need assistance or have questions, talk to an employer of record.

What US Companies Need to Know about Paying Employees in Canada

Topics: human resources

Who Qualifies for a TN 1 Visa?

Posted by Shannon Dowdall


Apr 13, 2018 9:00:00 AM

Who-Qualifies-for-a-TN-1-Visa-compressor.jpgAre you a Canadian professional hoping to get a job in the US with an American company? Maybe you work for an American firm looking to hire top talent, no matter where those people currently reside. If so, you may be wondering about the visas available for people to come and work in the United States. 

12 Things an American Company Looking to Pay a Worker In Canada Needs to Know

One of those visas is the TN 1 visa, which can be used to get foreign professionals working in the US.

The TN 1 Program

The TN 1 visa program was created under the North American Free Trade Act (NAFTA) in 1994. This trade agreement allows free trade between Canada, the United States, and Mexico. Free trade agreements often include provisions for workers as well, opening up opportunities for citizens of the signing countries to work in the other countries. 

The TN 1 visa is designed to help professionals in certain areas move between the three countries. This allows companies to hire the very best of the best.

Who Qualifies?

Generally speaking, you must be a citizen of Canada or Mexico to qualify for a TN 1 visa. This is a non-immigration visa that allows people to go work in the United States. Canadian citizens usually face fewer restrictions than those applying from Mexico on account of closer ties between Canada and the US. 

Of course, not just anyone can apply to get a TN 1 visa. If you could, it would be much more difficult to get one. As it stands, the TN 1 visa is one of the easier visas to get provided you meet certain criteria.

Qualified Professionals Only

The TN 1 visa is not for everyone. The program is designed to facilitate the movement of highly trained and talented professionals between Canada and Mexico, and the United States. Some educators and engineers are welcome to apply under the provisions of the TN 1 program.

A list of the qualifying professions is available online. If your profession isn’t listed, you won’t qualify for the TN 1 visa program.

Another issue is ensuring the people who apply are actually qualified in their fields. To that end, you’ll need to prove you have education and work experience in the area you’re applying in. Someone who is a computer engineer can’t apply to the TN 1 visa program as a mechanical engineer. An educator can’t apply as a physicist.

You may have to prove your qualifications before you’ll be approved for the TN 1 visa.

You Must Have a Job Offer

Another restriction on the TN 1 visa program is that those who apply must have a job waiting for them in the United States. This visa does not allow you to enter the US and then look for work. It’s awarded to people who have already secured employment in their fields and now need a visa in order to legally work in the US for a particular US employer.

Most of the time, this is facilitated by the potential employer. They’ll write you a letter, outlining the job offer you’re accepting. They’ll even vouch for your qualifications.

If you don’t have a standing job offer, a TN 1 visa is not the visa for you.

Who Doesn’t Qualify?

The list of who doesn’t qualify for a TN 1 visa is a little lengthier. People who aren’t citizens of Mexico or Canada can’t apply. Those who work in areas or have accepted jobs in areas not listed under the terms of the program also don’t qualify. Those who aren’t qualified to work in these areas wouldn’t be eligible for a TN 1 visa.

Finally, those who don’t already have a job on offer don’t qualify.

If you meet the criteria, a TN 1 visa could be right for you!

12 Things an American Company Looking to Hire a Worker in Canada Needs to Know

Topics: human resources

What Is an Unlimited Liability Company (ULC)?

Posted by Ray Gonder


Mar 23, 2018 9:00:00 AM

What_Is_an_Unlimited_Liability_Company_ULC.jpgSetting up shop in Canada is an exciting prospect for your business. As you look to open the doors on your first location, you’re likely wondering how you should go about structuring your business. You might wonder if it’s better to set up as a branch office. Maybe you should be a subsidiary?

The terminology can sometimes be confusing and there are many different options for the structure. You might have heard of unlimited liability companies (ULC). Is this structure right for your business or should you steer clear?

12 Things an American Company Looking to Pay a Worker In Canada Needs to Know

A Vehicle for US Investors

Your business is looking to move north of the border, and you need to structure your Canadian holdings somehow. You were debating a branch office and a subsidiary, but someone has now mentioned an unlimited liability company as an option. If you choose to become a subsidiary, you can incorporate as a ULC.

You’re curious. You want to know what this vehicle can do for you. ULCs are becoming more popular with American businesses as a way of structuring their Canadian subsidiaries or Canadian assets.

What Is It?

A ULC is a hybrid entity, but it’s treated as a regular Canadian corporation for tax purposes. As such, it’s subject to the 25 percent withholding when it comes to paying shareholders dividends and interests.

The ULC is only available for businesses operating in Alberta, British Columbia, and Nova Scotia. It has specific tax advantages, which is why it intrigues most US business owners.

The Tax Advantage

The primary advantage of a ULC is it avoids the issue of double taxation in the US. Shareholders may find they’re being double-taxed, paying both personal income tax and corporate taxes on payments from their corporate income.

The ULC can also defer US tax on its own income. Since Canadian tax rates are lower than US taxes, it’s advantageous for a company to pay Canadian taxes and defer the US tax. The ULC can be treated as a corporation for US tax purposes. It can also be treated as a disregarded entity.

Finally, the ULC allows for flow-through of both profits and losses to shareholders. Flowing through the company’s losses can help shareholders offset their income, thus reducing their taxes.

Other Benefits

There are a few other advantages to using a ULC if the option is available to you. First, it could allow you to invest in passive investments in Canada. Foreign holding companies can sometimes run up against the US anti-avoidance rules when they invest passively in Canadian assets. The ULC structure doesn’t trigger these rules.

Another, smaller advantage is that a ULC doesn’t have the same stringent rules about Canadian representation on the board of directors. For most subsidiaries, you’ll be required to place a particular number of Canadian citizens on your board. No such requirement exists for ULCs.

The Downsides

It’s not all rosy with ULCs. Perhaps the largest drawback is they can only be formed in three of ten provinces in Canada, which limits your choice of operation base.

The tax situation can become somewhat punitive, depending on how your US business is structured. If you’re operating as a disregarded US Limited Liability Company (LLC), a ULC can certainly be tax inefficient.

There’s also the idea that the business’ liability is not limited, as it is with an LLC. If the business goes under and needs to be liquidated, the shareholders become responsible for the company’s debts and liabilities. Even former shareholders can be liable in certain circumstances.

ULCs are not the correct structure for every business, but it could be the right choice for yours. If you’re still unsure, talk to the experts today.

12 Things an American Company Looking to Hire a Worker in Canada Needs to Know

Topics: human resources

Subscribe to Email Updates

Recent Posts


Posts by Topic

see all