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Doing Business in Canada, eh? Top 5 Differences US Employers Need to Know

Posted by Stacey Jones

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Aug 15, 2019 9:00:00 AM

redWhen it comes time to expand their business, many American business leaders and owners look to the Great White North. Canada makes sense as your first international market. There are so many similarities between the two countries, success may seem like a guarantee.

Doing business in Canada can prove to be a stumbling block for expanding companies. Although Canadians have much in common with their neighbors to the south, there are also plenty of differences. That’s especially true regarding employment law and managing your employees.

If you plan to hire Canadians to staff your operations, keep these five differences in mind.

1. Payroll for Doing Business in Canada

Payroll is already confusing enough in the United States. When you step over the border into Canada, a whole new set of rules come into play.

At first glance, Canadian payroll may not seem too different than its US counterpart. You calculate how much you owe your employees, you take certain deductions, and you remit those to the Canada Revenue Agency.

Unfortunately it’s not that simple. Canadian law imposes different penalties, different payment schedules, and even different record-keeping obligations on employers. You must be aware of all those differences as you administer payroll.

2. Holidays and Vacation Pay Are Mandatory

Another major difference between employee compensation in the US and Canada is holiday and vacation pay. In the US, both of these are almost entirely optional. If you want to pay your workers for a holiday or give them two weeks of paid vacation, that’s your choice.

In Canada, both are mandatory. Certain holidays are considered statutory, which means employees must be given the day off and paid for the day.

Paid vacation is also non-optional. Employers are expected to set aside a certain amount, often equivalent to a percentage of an employee’s salary or average earnings. This is then used to fund an employee’s vacation entitlement.

Rates of pay for holidays and vacations, as well as the amount of time off, are set by the provinces. That means the rules vary from place to place. An employee in Quebec will be paid differently than one working in Ontario or BC.

3. Health Insurance Is Supplemental

The Affordable Care Act created an obligation for American employers to offer health insurance to their employees. Employers are still able to choose the plan they offer and the provider they work with. Health insurance can act as an incentive for hiring the right talent.

In Canada, the situation is quite different. Canadian employees still like employers who offer health insurance as part of their benefits, but the policies are considered supplemental. Most Canadians are covered by the publicly funded system, so their private insurance usually extends to medical expenses that the provincial programs don’t cover.

Your Canadian employees probably won’t be interested in hospital care or coverage for visiting the doctor. Instead, look for ways to offer them coverage for the care they need, such as dental visits, eye care, or prescription medications.

4. Paid and Unpaid Leave

Another difference US employers encounter when they’re doing business in Canada is the robust set of paid and unpaid leaves Canadian workers are entitled to. Although it varies by province, almost every Canadian employee is entitled to some form of paid or unpaid leave.

Parental leave, for example, is covered for up to 18 months by the federal Employment Insurance program.

5. At-Will Employment Does Not Exist

One of the most jarring differences for US employers operating in Canada is the relationship between employers and employees. In the US, employment is considered “at will.” Either the employer or employee can end it without concern.

The same is not true in Canada, where employers must provide adequate notice or compensation to employees upon termination.

These are just a handful of the differences you’ll find when you’re doing business in Canada. Working with a PEO can help you navigate these issues and help your business succeed north of the border.

Topics: Hiring Canadian Employees, Overseas Workers, Manage Employees Overseas, business expansion into Canada

Important Legal Differences You Should Know Before Hiring an Employee Overseas

Posted by Stacey Jones

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Nov 6, 2015 2:45:07 PM

Important_Legal_Differences_You_Should_Know_Before_Hiring_an_Employee_OverseasSometimes, the best person for the job is someone who lives outside of your company’s home country. However, trying to hire an employee who lives in another country can lead to complications. For example, the employee payroll and HR management in Canada is very different than in the United States, due to different laws and regulations. There are over 190 regulatory legislative requirements in Canada, which can make it very challenging for U.S. based companies to ensure they are in proper compliance with these requirements when paying their foreign employee. If you’re looking to expand your company by hiring out of country, here are a few important things to look into before setting up your financial management services.

Holidays and Time Off

There are many nationally recognized holidays where employees are expected to be able to get off of work in order to observe the traditions. There are similar holiday rules for other countries; however, that does not mean they are all the same. Different countries have different holidays they observe, meaning your foreign employees will need to take off those days, even if your country doesn’t observe them. When setting up your business management services, make sure you also fully understand the policy for things such as time off, which can be very different from the U.S. laws.

Unions

In many countries, unions carry a heavy weight when it comes to industry. Employee benefits and the conditions of work are strongly connected to unions, which negotiate on the behalf of their employees. Many countries have work councils that must be contacted before any changes can be made to an employee’s contract or other work policies. Before hiring an employee, make sure you understand the unions they are a part of, and how they can affect your company.

Non-Competing Contract

Many U.S. companies like to make their employees sign a non-competing contract, which protects them from the leaking of trade secrets that could allow a former employee to become a competitor. However, many foreign countries have regulations against these types of contracts. A company can get in big trouble if they try to sign one of these contracts with a foreign employee.

If you are looking to hire an employee who does not live in the same country as your company’s headquarters, it may be beneficial to look for a business management services provider that has experience in the country where your potential employee resides.

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

 

Topics: Hiring Canadian Employees, Overseas Workers

Top 5 Traits of Effective Overseas Workers

Posted by Ray Gonder

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Jun 10, 2015 9:00:00 AM

Top_5_Traits_of_Effective_Overseas_WorkersWhen you’ve tried to hire locally but without any luck or you’re expanding your markets in new countries, you may need to look for skilled employees overseas. Hiring overseas workers can sometimes be your best option when the skills you need are in short supply in your country or you need someone who can bring in new ways of doing business or fresh ideas. However, when it comes to overseas employees, the recruitment and hiring process is more difficult than if you were to hire locally.

To be assets to your business, overseas workers require specific traits. You must spot those traits in your candidates to ensure you’re hiring the right people. When you’re so far away, making hiring decisions over Skype, it can be tricky to choose the best candidates.

To help you make the right hiring decisions, here are five traits you should look for.

Communication

Communication is going to be the key to a successful business relationship with your overseas employees. For one, you’ll need to be able to understand each other if there is a language barrier. If there are issues here, it could be difficult to train your new workers or provide instructions. Miscommunications and misinterpretations can be damaging to your business. Additionally, you’re going to have to rely on your overseas workers to stay in constant communication when needed. Make sure your overseas workers have the means for effective communication.

Dependability

You can’t have your overseas employees disappearing on you when you have looming deadlines. You need to be able to depend on them to be available when you need them and to get the work done correctly and on time. Your overseas employees need to have the integrity to not leave you hanging and dependability that you can trust.

Independence

Because your overseas workers are going to be working on their own, thousands of miles away from you and the rest of your team, you need them to have a high level of independence. You need to be able to trust that they’ll be able to follow directions, figure stuff out on their own, and get the work done without direct supervision. If you’re hiring overseas workers who aren’t independent, you’re going to have a tough time getting any work done.

Ability to Learn Quickly

Though you’re hiring overseas workers with the skills necessary to get the job done, they might not be totally familiar with your processes, operations, your systems, or technology. For them to be effective, they need to have the ability to learn quickly so you can get right to work.

Flexibility and Open Mindedness

Different countries do business in different ways. It’s important for your new overseas employees to be flexible to the way you do business. They need to be able to adapt to your type of schedule, your circumstances, your demands, and your pace. If you’re getting a lot of pushback because your workers don’t want to budge on the way they usually do things, your business relationship isn’t going to last. They won’t properly fit within your company culture.

Hiring locally isn’t always possible. Businesses often need skilled workers that they can’t find in their own countries. When this is the case, recruiting overseas employees is ideal. But hiring overseas is a complex task. You must ensure that your new hires have not only the right skills to get the job done but also have the right traits to be great workers. When hiring, look for effective communication skills, independence, dependability, the ability to learn quickly, and flexibility.

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

Topics: Overseas Workers

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