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Who Qualifies for a TN 1 Visa?

Posted by Shannon Dowdall

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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

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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

When and How to Obtain a TN 1 Visa

Posted by Karen McMullen

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Mar 19, 2018 9:00:00 AM

When_and_How_to_Obtain_a_TN_1_Visa.jpgYour company has opened a branch office or a subsidiary in Canada. You’ve hired Canadian employees, maybe for years now. Today, however, you’re faced with a unique prospect. Some of your Canadian employees are crossing the border into the United States.

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

They’ll still be working for you while they’re on US soil, so now you’re wondering about the visa implications. Do they need a visa? Which type of visa will they need, and how can they obtain it?

The TN 1 Visa

The North American Free Trade Agreement (NAFTA) provides for Canadian and Mexican citizens working in particular professions to obtain a visa to work for a US employer. Generally speaking, the employer must be employing the professional in one of the approved professions and the position must require a NAFTA professional.

An example might be bringing a bioengineer across the border from Canada. The profession qualifies under NAFTA. You’re going to employ them as a bioengineer, and you’ve already looked for an American professional in this area. Your potential Canadian employee, however, has better qualifications and more years of experience, and is thus better qualified to do the job.

You must have made an offer of employment for full-time or part-time work to the person before they apply for the visa.

When Do Canadians Need a TN 1?

It’s unlikely a Canadian citizen would need a TN 1 visa if they were coming to the US for a single day to lead a workshop or seminar at your headquarters. They wouldn’t need a TN 1 if they were coming to the head office for a week of meetings either. There’s a different visa for that.

If you’ve decided to promote someone from your Canadian branch or you’ve hired a Canadian professional to come work at your US office full-time or part-time, however, they’ll need to apply for the TN 1 visa. They also cannot be immigrating to the US, as the TN 1 is a non-immigration visa.

How to Apply

Canadian citizens don’t need to apply for their TN 1 visa at a US consulate. Instead, they can simply provide the required documentation to a US Customs and Border Protection officer at the time of entry into the US.

What does someone applying for a TN 1 visa need? The requirements are actually only a few extra documents. The employee will need proof of Canadian citizenship and some proof of their credentials as a professional. The employer must also provide a letter detailing the job, the length of stay in the US, and the candidate’s educational qualifications.

The employer can also choose to file on the employee’s behalf. They can do so by submitting Form I-129, Petition for Nonimmigrant Worker to USCIS.

The TN 1 Visa Is Temporary

You should keep in mind the TN 1 visa is temporary, which is reflected in its status as a non-immigration visa. Essentially, a Canadian citizen cannot move to the United States indefinitely on the TN 1 visa.

TN 1 visas can be issued for up to three years. This makes them ideal for project-based or temporary assignments. If you have a big engineering project that has funding for two years and you want to bring in a Canadian engineer to lead the team, a TN 1 visa might be the perfect fit.

If you’re hiring someone indefinitely, then you might want to consider other visa types, although they can be more difficult to obtain. You can always sponsor an employee for an immigration visa if you need to hire someone long term, but the restrictions and requirements are more onerous.

All in all, however, the TN 1 visa is a great option for US employers and Canadian employees alike.


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

Topics: human resources

American Companies: How to Terminate an Employee in Canada

Posted by Corinne Camara

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Mar 16, 2018 9:00:00 AM

American-Companies-How-to-Terminate-an-Employee-in-Canada---compressor.jpgYou hired an employee in Canada. Now you need to know how to go about terminating their employment with your company. 

In Canada, as in other countries, there’s legislation governing how you should go about this process. If you don’t comply with the regulations, you could find yourself facing fines or penalties. An employee may even decide to take you to court.

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

The Basics

Almost all of the various legislation in Canada around employee termination agrees on a couple of things. First, you need to provide the employee with notice of their termination. At the federal level, this is two weeks’ notice, but the provincial legislation is of more concern to most American companies. 

In Ontario, if the employee has worked for you for less than a year, you’re only required to give them one week’s notice. The longer an employee has worked for you, the longer the notice period is. For example, if an employee has worked for eight years with your company, you must give them eight weeks’ notice. 

By contrast, employers in Quebec don’t need to give as much notice. Eight weeks’ notice is given to employees who have 10 years or more of service, while those with five to 10 years will receive four weeks’ notice. Other provinces have their own rules as well.

Termination Pay

The idea behind giving notice about termination is it allows the employee to prepare. The employee receives their wages for the notice period, up to two months in some cases. 

If you can’t give notice for some reason, you need to provide termination pay instead. In Ontario, the termination pay you provide must be equal to what the employee would earn over their notice period. If, for example, you terminate an employee with eight years of service but give them no notice, their termination pay must be the equivalent of eight weeks of wages. 

If you gave the same employee four weeks’ notice, you’d be required to pay them four weeks of wages. An employee with four years of service would not be entitled to termination pay.

Probation Periods

In most provinces, there’s a period of time after an employee’s hire date colloquially known as the “probation period.” In Quebec and Ontario, this period is three months. You’re not legally required to provide notice or termination pay to employees who have been with you three months or less.

This is recognition that sometimes you’ll hire someone who just doesn’t work out. If, at any point during the first three months, you’re not seeing satisfactory improvement, you can let the employee go.

A Reason for Termination

You must provide a reason for termination. Sometimes, it will be that you need to scale back your operations. Reorganization and budget constraints can cause businesses to shed positions. In this case, provide as much notification to the employee as you can and be prepared to pay termination pay if you can’t provide sufficient notice. If you can, provide a better severance package.

Layoffs are handled differently, and most provinces make special provisions for companies that need to terminate a large number of positions at one time.

Otherwise, you must always provide a sufficient reason for letting the employee go. This is another reason for the termination payments and notice periods. It forces employers to think through their decisions and to try to work with the employee to resolve things instead of just terminating someone immediately.

Beware: If you can’t provide an adequate reason for the termination, you could face a fine or even a lawsuit.

Provide Records

Finally, once the employee has been terminated, you’ll need to provide them with a Record of Employment for their files. If you need help with any of this, a Canadian employer of record can always assist.

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

Topics: human resources

Tips for Remotely Onboarding Your International Employees

Posted by Anna Mastrandrea

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Dec 22, 2017 9:00:00 AM

Tips-for-Remotely-Onboarding-Your-International-Employees---compressor.jpgWhenever you hire a new employee, onboarding is the most crucial step to acclimating the individual to your company procedures, culture, and structure. But when hiring internationally, this can be challenging. For U.S. companies operating businesses north of the border, it's important to fully accommodate Canadian employees from the beginning.

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When onboarding these remote employees, consider the following tips to make the process as effective as possible. From Canadian payroll for US companies to simple document sharing, there are ways to navigate every detail smoothly.

Take Advantage of Video Calls

If your new employee can't be in the office, bring the office to them. Have as many meetings as possible over video call since you and the employee will benefit from putting a face to the name they are speaking with. When going over documents, you can also use screen sharing technology to make the process easier.

Create Unique Documents

Your onboarding presentations and documents that you use for in-house employees should not be the same as those used for you your international employees. Since there are so many logistical differences, such as payroll, it's best to keep all of these details separate.

Ask What the Employees Want out of This Process

If you choose to listen, the employee may be willing to give valuable feedback on your process. For example, you may not be handling payroll and other details as well as you could. Ask them clearly about their expectations and what they want to learn.

Provide Thorough Online Resources

Since you can't hand them a stack of papers, be sure to provide your employee with adequate resources through a cloud sharing service or via email. This will allow them to reference it freely and contact you directly with questions.

Hire a Professional Employer Organization

Many U.S. companies are hesitant to hire in Canada because of jurisdictional differences. To avoid this problem, you may consider hiring a PEO service in Canada. This professional employer organization can help you craft your onboarding process. And this can also make Canadian payroll for US companies much easier.

By making the above efforts, you can seamlessly onboard your international employees and make them feel like part of the company. As you go through this process, be sure to take note of what is and is not working. Then you can improve the process for future years.

What US Companies Need to Know about Paying Employees in Canada

Topics: human resources

Canadian Small Business Trends to Know in 2017

Posted by Shannon Dowdall

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Nov 8, 2017 9:00:00 AM

How to Pay Employees Who Work in the United States and Canada--.jpgThe Canadian economy is ever changing, which means that small businesses are evolving as well. This year's small businesses are more tech savvy and independent than ever. From online solutions to outsourced payroll services, the following are some of the top trends that Canada's entrepreneurs are experiencing.

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Remote Employment

With the rise of technology, employees no longer have a reason to be in the office. This opens up hiring options for Canadian firms, including international candidates. While this introduces the need for foreign employment compliance, it also creates a more diverse and well-rounded work force.

Online Customer Service

Tech-driven small businesses are also able to streamline their customer service through online communication. This includes online chat bots and social media customer service techniques. This meets the customers where they are, moving it offline when necessary. While this introduces an extra element to digital training, it also makes the customer service process more user-friendly on both ends.

Crowdfunding

Some startups are no longer relying on more traditional venture capital solutions. Crowdfunding is becoming more popular for projects as well as entire businesses. This creates a community around a product or service, as well as a level of social responsibility.

Mobile Transactions

While some small businesses are forced to take cash due to infrastructure limitations, artists and other entrepreneurs are able to make transactions via their mobile phones. Companies like Square make this easier since you can place an attachment right on your mobile device for customers to swipe their cards. This simply makes commerce more efficient and doesn't limit potential customers to those who just have cash.

Outsourcing

Small business owners are busier than ever, meaning that they need to make certain parts of their jobs easier. This is why many Canadian firms are choosing to use outsourced payroll services. Many of these businesses will find that these services save them time and money during tax season especially. This is particularly true if they are hiring employees internationally.

Small Business Empowerment

Today's small businesses are empowered by a wide variety of resources. Outsourced payroll, mobile transactions, and streamlined customer service all make owning a business so much easier. This allows business owners to focus on their product or service more than the logistics. As Canada becomes a better place for small businesses, these trends will become more intuitive. The future is open for entrepreneurs, especially if they have the tools to empower them.

Canadian Payroll Tax Deduction Calculator

Topics: human resources

5 Answers to Questions about Vacation Time Rules in Quebec

Posted by Corinne Camara

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Nov 1, 2017 9:00:00 AM

5 Answers to Questions about Vacation Time Rules in Quebec--.jpgCanadian provinces have jurisdiction in a number of areas, including employment. Employment regulations are a shared federal and provincial responsibility. The majority of workers—up to 90 percent of them—are covered by provincial, rather than federal, law. 

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As a result, payroll regulations and employment standards vary as you move across the country. Perhaps the most unique province is Quebec. 

Of course, the gulf between Quebec and the rest of Canada can mean confusion when it comes to payroll. One of the most common subjects is vacation time. Employers and payroll providers alike have plenty of questions on this topic.

1. How Much Vacation Does an Employee Get?

Vacation time rules in Quebec prescribe calculating vacation time by the length of service. Generally speaking, the longer employees work for you, the more vacation time they’re entitled to. 

If employees have worked less than one full year, they’re still entitled to vacation time. They earn one day per month of service. So, if an employee is hired on May 1 and works until September 1, they earn four days of vacation. 

For employees who have worked for you longer than a year, but less than five years, they’re entitled to two weeks of vacation. The employees can also ask for an additional (unpaid) week off. 

If employees have worked more than five years, they are entitled to three weeks of vacation.

2. What If Someone Is Hired Seasonally?

Suppose you hire a student worker for the busy summer months. This employee works for four months, from May 1 to September 1. Next year, you hire them back again. You continue this until they graduate university, for five years total. How much time off have they earned under vacation time rules in Quebec? 

The answer is one day per month of consecutive service. Since this employee’s service isn’t uninterrupted, they wouldn’t be considered as having worked for you for more than a year. Employment must be based on consecutive months of service.

3. How Do You Calculate a Year?

Another complicating factor for vacation rules in Quebec is the reference year. In Quebec, the year begins on May 1 and runs until April 30 the following year. Many businesses follow this fiscal year model anyway, since their taxes to the Canada Revenue Agency are due on April 30 each year.

To calculate a year, you begin from May 1. If you hired an employee on May 1, 2016, they would have accrued one year of service on May 1, 2017. As of April 30, 2017, this employee has still worked less than one year, so the vacation entitlement for 2017 would be one day per month of service.

If this employee is still with you on April 30, 2018, however, they will be entitled to two weeks’ vacation, plus an additional unpaid week of time off. This might seem a bit confusing at first, but it’s relatively simple once you know the reference year.

4. How Much Vacation Pay?

Vacation rules in Quebec are heavily centered on how long the employee has worked for your business. This is true both in how much time employees accrue and how much you’re required to pay them.

For employees with less than five years’ service, you’re required to pay four percent of their annual gross earnings. For those who have been with you for longer than five years, six percent of annual gross is required as vacation pay.

The same rules are used for full-time and part-time employees. You can use a deductions calculator to make the job easy.

5. How Do You Pay?

Vacation time rules in Quebec stipulate you must pay out vacation pay in one lump-sum payment before the employee leaves on vacation.

At first glance, vacation time rules in Quebec seem quite complicated. If you still have questions, talk to a Canadian payroll provider today!

What US Companies Need to Know about Paying Employees in Canada

Topics: human resources

What You Need to Know About Vacation Policies for Canada

Posted by Stacey Duggan

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Jul 31, 2017 9:00:00 AM

What You Need to Know About Vacation Policies for Canada--.jpgWhether it’s to another country, into the Canadian wilderness, or just a relaxing staycation at home, Canadians love their vacation time. So much so, that many Canadians take this into account when negotiating their employment contracts.

In fact, Canada was the only country that chose vacation time as their preferred benefits. 20 percent of Canadians said that they would prefer an additional week of vacation time, compared to a $500 salary increase. Clearly Canadians know their priorities!

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With vacation time comes vacation policies for Canada. Companies and employees alike need to be aware of what the rules and regulations surrounding Canadian vacation policies to properly account for accurate payroll processing. There are many myths surrounding vacation policies for Canada and it’s important to know truth from fiction. If you don’t already, here’s four things you’ll need to know about vacation policies for Canada.

They’re Different in Every Province

That’s right, if you conduct business in only one province, you’ll only have to know your province’s vacation policies. However, if you conduct business and hire employees in multiple provinces, you’ll need to be aware of the differences to ensure proper payroll accuracy and ensure compliance.

If you have trouble keeping track of provincial regulations, it may be a smart investment for your company to enlist the support of a back office solutions provider, who can not only keep you informed on provincial differences, but handle all your payroll needs to avoid any mistakes or errors. Don’t leave your payroll to chance, trust the experts.

Vacation Policies for Canada—How it Works

Unlike Canada’s neighbours south of the border, it is mandatory for Canadian employers to offer vacation time to employees after one year of employment. Employees are entitled to two weeks of vacation time, except in Saskatchewan where the minimum is three weeks, and Quebec where the minimum is 12 days (one for every month of the year).

You may have noticed on your paycheque that every payday four percent, or six percent in Saskatchewan, is deducted for vacation pay. What does this mean? While vacation time may seem like free money, it’s actually an accumulation of a percentage of your paycheque. So, each pay period, four or six percent of your pay is withheld from you in order to pay for your time off.

For temporary employees, the accumulation of their vacation pay is given to them once they complete their employment with the individual business.

Can an Employer Reject a Request for Vacation Time?    

When it comes down to it, yes, an employer does have the right to reject requests for vacation time. Vacation policies for Canada are not meant to harm businesses, and if your employer believes that the time you have requested may negatively impact their business, they have the right to reject your request.

While they have the right, most employers do not exercise this. It diminishes employee morale, and ultimately can leave employees feeling very bitter towards their employers. While employers can reject vacation time requests, many do not in order to keep their employees happy and productive.

The Use It or Lose It Rule

Many people have heard of the use it or lose it rule, but what does it mean? The use it or lose it rule only applies to extra vacation time granted to employees by their employers. For the minimum two weeks’ vacation, employers cannot implement a use it or lose it policy.

Employees must take two full weeks off within 10 months of the end of the vacation period. You should never be fearful that you’re going to lose your vacation time unless you receive over two week’s holiday.

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

Topics: human resources

What American Companies Need to Know about Employing a Canadian

Posted by Karen McMullen

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Apr 21, 2017 9:00:00 AM

What-American-Companies-Need-to-Know-about-Employing-a-Canadian-1.jpgHiring new employees is an exciting and busy process, butit can get complicated quickly, especially when the new employee lives in a territory outside your own. American companies hiring Canadian employees remotelyneed to be aware of the significant differences that occur when employing non-U.S. residents. 

Employing a Canadian in an American company requires compliance with certain regulations. Here’s what U.S. employers need to know. 

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Labour Legislation Is a Provincial Matter

Unlike the U.S., employment legislation in Canada is largely a provincial matter.The federal government rules on a minority of employment issues, meaning each province has its own regulations to follow.Employing a Canadian in Ontario, for example, will have different labour rulesthana Canadian employee working and living in British Columbia. 

Where said employee works will determine the pay schedule, the applicable minimum wage rate, holiday and vacation pay, acceptable employee contract terms, and more. Provinces individually outline these minor details for legally employing Canadians, so American companies must do their due diligence beforehand to ensure they’re following the correct provincial standards.While the regulations may appear similar across the provinces, many haveminor variances. 

Agencies and tribunals that deal with work issues, whether discriminatory practices, human rights violations or other issues, also vary. Each province has its own administrative tribunal to handle these situations, and while they all do the same job in principle, each tribunal conducts business in its own way. 

Unions,as well,are governed differently in Canada. Unlike the National Labour Board in the U.S., which governs the entire country’s unionized force, Canada’s unions are run by their own trade and vary between provincial and federal positions. 

If Canadians are employed from several provinces, American employers will need to be sure each individual employee’s management is in line with that province’s human resources, employee benefits, and contractual standards.

“At Will” Termination Isn’t an Option

Should you employ a Canadian, it’s crucial to remember they cannot be terminated “at will.” Unlike U.S. employers who have this option, Canadian employers must have a legitimate reason for termination, and as such, employees are entitled to reasonable notice or pay in lieu of it. 

As legal justification is difficult to prove when firing an employee, severance packages are a popular alternative. American companies need to be absolutely aware of this to avoid lawsuits or possible discrimination charges should they need to terminate their Canadian employees. Unless they’re contractually obligated, American employers can terminate without giving sufficient reasoning, notice, or pay.

Canadian courts place a very high onus on the employer to meet human rights standards to prevent wrongful termination. American companies need to fully grasp what side courts will choose when deciding to terminate. If you’re considering hiring a Canadian employee, fully understand how termination and dismissal works.

Calculating Payroll and Taxes

It’s crucial to correctly calculate employee payroll and deduct the right taxes, in order to submit accurate remittance reports later. Canadian tax remittance reports are submitted to the federal agency namedthe Canada Revenue Agency (CRA).The CRA outlines when these reports are due based on timing and type of company, and late submissions cause problems. Canadian employees have three major tax deductions American employers need to account for: the Canada Pension Plan, Employment Insurance, and income tax. All three are deducted each pay period.

In addition, correct employee classification outlines how said employee is paid, and mistakes here can result in audits, fines, and penalties from the CRA.

American companies should also pay attention to the fluctuating exchange rate to determine the best way to pay their Canadian employees and understand all the financial obligations, including what’s mentioned above, involved when employing a Canadian.

Some U.S. employers find it helpful to outsource these tasks to a Canadian employment of record, to ensure they’re handled correctly.

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

Topics: human resources

How Do I Terminate an Employee Who Isn’t Working Out?

Posted by Stacey Duggan

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Apr 5, 2017 9:00:00 AM

How-Do-I-Terminate-an-Employee-Who-Isnt-Working-Out.jpgIt happens. You hire someone who appears to be the right fit with the right qualifications. Shortly after they start though, it’s a disaster. Incorrectly firing personnel is bad business, so how can you fire staff without getting into legal hot water? You have to cover all your bases to ensure you correctly terminate an employee, and protect your business.

Timing

Employers have to be incredibly careful when deciding to terminate an employee. Ideally, the sooner you can terminate an employee, the better. The standard 90-day probation period generally lets employers off the hook for firing, however, confirmwith the correct legislation in case a period of notice, or pay in lieu of,still applies. Firing an employeewithin this period can also leave employers vulnerable to backlash comments that this intervalis a training and skill-testing period, but generally, employees fired at this time have no right to appeal.

Firing a staff member after probation requires a reasonable notice period.Various factors will determine how long reasonable notice is: age, years of service, their character, and availability of similar jobs. Employees are still entitled to receive compensation and benefits for a sustainable period, as if still employed by the employer.

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Comply with the Employment Standards Act

Review all the various laws to ensure you can terminate said employee and have met the provincial legislation standards to avoid possible lawsuits and legal penalties. Each province has its own labour law or employment standards act to follow, which specifies whether the employee has to be paid out or not. They also outline the minimum standards of pay and benefits employees are entitled to receive upon leaving. 

When you terminate an employee, their severance package must meet these minimum requirements. Ensure you’ve followed the provincial legislation, your employer handbook, and the employment contract prior to firing. If necessary, obtain legal advice to confirm you’ve covered your bases.

The Employment Contract and Termination Letter

Complying with the correct terms of the employment contract is key to verifying termination. Employment contracts need to be reviewed to make sure you’re not breaching any terms, and the contract will spell outspecific provisions regarding termination. Examining this document first ensures you have legal grounds to fire this employee.You may also need to confirm the employee was given proper warnings and a chance to improve, and that regular performance reviews were conducted along with meetings and chances to explain, if necessary.

Keep in mind that termination clauses in contracts may vary depending on who drafted it. Courts have the power to set aside documents that don’t meet the provincial requirements, so it’s important your employment contracts meet minimum standards in initial drafts to avoid future legal disputes. Improperly drafted contracts that fail to meet ESA standards can be thrown out.

After reviewing the contract, draft the termination letter. The termination letter must be ready when you call the meeting with the employee, and after you’ve inspected the employment contract. It should specify the end date, and clearly communicate that this is termination, to avoid confusion of it beinga disciplinary or time out period. Details about the amount of notice, payment in absence of, and severance package will be noted here.If your letter offers benefits above the requirements outlined in the ESA, have the employee sign a release in exchange for receiving the statutory amounts. This ensures full coverage and future liability for your business. This option is completely discretionary to employers.

Once you’re legally and ethically clear to fire, deliver a termination notice and hold an exit interview to explain to the outgoing employee the reasons they are being let go. It’s not easy firing staff, but at the end of the day, it’s just business.

7 Signs It's Time to Outsource Payroll

Topics: human resources

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