With more US companies than ever hiring contingent and international workers out of Canada, more questions arise and so few answers seem available. Hiring workers from across the border comes with a unique set of problems, and this leaves a lot of American-based businesses wondering how to solve them. Here are a few things to consider.
Laws and Regulations Are Different
It can be easy to forget that the US and Canada have so many differences, being so close together in both culture and economics, but they do and one of the main manifestations of that is laws and regulations. While some Canadian laws are nearly identical to American laws, it's important to remember that many others are completely different in critical ways. When many businesses begin to consider how to pay Canadian workers, they can often find it difficult to navigate through so many foreign policies and ordinances.
Remember that those laws also vary province to province, and can affect everything from how much you pay your employees to how regularly you have to. It's also imperative to remember that the pay Canadian workers receive is also subject to an entirely different set of taxes, which can be affected not just by Canadian tax law but US laws as well. It's important to do as much research as possible on all the intricate differences to ensure you don't land yourself in legal trouble, which can result in fines, penalties and even, worst case, jail time.
Fluctuating Exchange Rates
As anyone paying attention to the world economy knows, the difference between the American dollar and the Canadian dollar is constantly shifting, which can complicate matters when processing payroll for employees across the border. Many companies deal with this in different ways, some checking the rate once a week, once a month, or every pay period and adjusting all foreign currency from there.
In order to most accurately pay Canadian workers, some businesses keep separate accounts filled with foreign currency which can be bought up at opportune times based on market prices and pay out from there, though this is one of the riskiest options. Not only is it highly complicated, but depending on how the market does, money can be lost or gained and requires a great deal of attention to trends to stay on top of it. One of the most common ways around this problem is to simply pay Canadian workers in US funds accordingly, as long as you consider the policies involved with that.
PEOs Can Smooth Out the Process
Canadian workers are a highly skilled and sought after group, which is why so many American companies are keen on hiring them. By and large, most companies would rather go through an agency to hire them to ensure they're getting the most reliable and talented individuals, but curiously, they rarely consider hiring agencies to deal with their payroll or their management.
A PEO is not just a great way to hire them, but they can pay Canadian workers for you as well. The greatest benefit, by far, is the simplification. It takes a great deal of resources, time and money for the average payroll department to handle all the intricacies involved, especially when hiring workers from another country. They need to consider laws, currencies, garnishments, various payment methods, invoices and hundreds of other details on a regular basis, and the more time they spend focusing on that, the less time there is for those resources to be put to good use to further your own company's goals. When you outsource these concerns to a PEO, all of that is delegated to a professional organization that specializes in that and only that, which means they're consistently up-to-date, are intensely familiar with every aspect of payroll law management and that means you can focus only on what you do best.