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What US Companies Looking to Pay Canadian Workers Need to Know

Posted by Stacey Duggan

|

Nov 4, 2015 9:00:00 AM

What_US_Companies_Looking_to_Pay_Canadian_Workers_Need_to_KnowWith 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.

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

Topics: Pay Canadian Employees

How a Company from the UK Can Pay Its Canadian Employees

Posted by Stacey Duggan

|

Apr 24, 2015 9:00:00 AM

How-a-Company-from-the-UK-Can-Pay-Its-Canadian-EmployeesExpanding into Canada or hiring Canadian employees can be a smart move for a UK company. After all, there is no language barrier and many of the employment laws, markets, and buying behaviours are similar between the two countries. However, there is one big difference that must be accounted for: payroll. Canada has stringent and complex payroll and tax regulations, and all companies, including international employers, must follow these regulations to the letter in order to stay in compliance with Canadian law.

When you hire Canadian workers, you must pay them according to the Canadian payroll and tax regulations. You cannot use the laws that apply in the UK to pay them. You also cannot skip out on deducting taxes and other mandatory contributions to save yourself the hassle of learning the ropes and following the law. Loopholes are illegal and will land you in hot water with the government—that can lead to heavy fines and penalties. Don’t try to dupe the government. Instead, learn how to pay your Canadian employees properly. Your two options are detailed below.

Take on the Responsibility Internally

International companies may think that it’s more convenient or cost-effective to simply handle paying Canadian employees on their own internally. Of course, this is an option, but it’s only a good option if the business owner or his accountant has the knowledge and experience that is needed to effectively work within the bounds of the Canadian payroll legislature. As we mentioned, there are great discrepancies between this legislature and that in the United Kingdom. Chances are, the employer and his staff members are only literate in the appropriate UK laws and do not know much about the nuances of Canadian payroll regulations. Without the proper knowledge, taking on this task internally will require a lot of time-consuming research in order to learn the ropes before the employer can even start to pay its workers.

As an owner of a UK company, you may think that the Canadian government will give you a break because you’re unfamiliar with the laws of the country. However, all businesses operating in Canada must follow the same law, regardless of their familiarity of it. It is your responsibility to learn the ins and outs of the law because the government will make no allowances for mistakes made my ignorance. You will still have to pay any interest fees, fines, or penalties if you make errors while paying your Canadian employees, remitting deductions, or filing your taxes. And the chances of these errors occurring if you handle payroll internally increase significantly, especially if you don’t keep up to date with changing regulations.

Using an Employer of Record (EOR)

Instead of spending all of your time learning the Canadian tax laws and payroll regulations, keeping up with remittance deadlines, and then going through the process of paying your Canadian employees every pay period, why not outsource the responsibility? When you engage an Employer of Record to take over as the legal employer of your workers on Canadian soil, you don’t have to worry about performing any of these tasks or being noncompliant to the local laws. Your EOR will pay your workers, file the required paperwork with the government, and make sure your UK company is always following the letter of the law, so you don’t risk paying any fines. Going with an EOR is by far the safest, and least risky, option to choose in order to pay your Canadian employees.

Canadian Payroll Tax Deduction Calculator

Topics: Pay Canadian Employees, UK Company

Australia: How to Pay Your Canadian Employees

Posted by Ray Gonder

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Feb 2, 2015 9:00:00 AM

Australia-_How_to_Pay_Your_Canadian_EmployeesIt can be a logical choice for companies in Australia to expand their business operations overseas in Canada. The language, markets, legal system, and consumer spending habits and incomes are all quite similar. It may seem easy to simply use the same Australian payroll processes to pay Canadian employees. However, the employment and payroll laws are different in Canada, and these differences mean that you’re going to need to know and understand the current legislature in order to effectively pay your Canadian employees. Whether you’re looking to operate in Canada or you just want to hire Canadian employees for their skills and expertise, here’s how to pay your workers legally, easily, and simply.

Canada Revenue Agency

Your first step to paying Canadian workers on your own will be to get intimately involved with the Canada Revenue Agency. The CRA is strict when it comes to payroll requirements and compliance is critical. Before you can cut your Canadian workers’ some paycheques, you’ll first need to do the following:

  • Get an office in Canada: All foreign companies, like those from Australia, need an administrative presence in Canada if they expect to hire Canadian employees.
  • Register accounts: The CRA and other government authorities will require you to set up accounts with them in order to pay your new employees.
  • Create infrastructures: Insurance, financial, and banking infrastructures will need to be established—which can be difficult with the distance involved from Australia to Canada.

Remittances

Once your Canadian presence, government accounts, and infrastructures are set up, you’ll have to calculate deductions and send those remittances over to the CRA by its strict deadlines if you don’t want to risk owing interest or having other penalties. You’ll need to classify your employees, get required information from them, and then figure out exactly how much income tax, provincial tax, CPP contributions, and EI premiums you should be deducting for each employee during each pay period. Once you’ve figured out how much to deduct, you need to send these remittances to the CRA on time, every time. Any small calculation error or missed deadline can be costly, so be diligent with your deductions and remittances. 

Compliance

Start reading. You’ll need to understand all of Canada’s current health and safety, labour, and payroll laws if you want to stay compliant. There is a lot of legislature to know, and since the laws are constantly changing, with some being added, some altered, and some thrown out, you’ll have to make sure that you’re always up to date on the current data. Using outdated information for your payroll and employment decisions in Canada can become extremely problematic down the road. And keeping up to date is no simple task—it’s going to take a lot of your time and it will be stressful to ensure you know the ins and outs of the Canadian legal system well enough to pay your Canadian employees.

Employer of Record Service

Companies from Australia might find the process described above to be daunting and scary. It’s understandable—you have to learn a totally new payroll system in order to pay your Canadian employees correctly and ensure you’re in compliance. If these hurdles seem too big for you to handle on your own, consider outsourcing your payroll process to an Employer of Record. Take the administrative burden off your shoulders and let a leader in Canadian payroll take control for you. Your payroll, taxation, and compliance issues will become their issues, so you don’t have to worry about paying your Canadian employees anymore.

7 Signs It's Time to Outsource Payroll

Topics: Pay Canadian Employees, australian company

How South African Companies Pay Canadian Employees

Posted by Karen McMullen

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Jan 30, 2015 1:47:17 PM

How_South_African_Companies_Pay_Canadian_EmployeesHiring Canadian employees either because you’re expanding business operations into Canada or because you just want the skills that Canadian workers have can seem like a great idea for South African companies. However, when it comes time to pay them for their work, there’s a lot of red tape and bureaucracy to deal with.

Processing payroll for Canadian employees isn’t as simple as converting funds into the right currency and mailing out the cheques. There are government officials that need to be in the loop, accounts that need to be created, remittances that need to be paid, and laws that need to be followed. Audits, legal entanglements, labour issues, and heavy fines can occur if you try to bypass the Canadian government by taking shortcuts with your payroll processing.

In order to be legally compliant, here are some of the ways that South African companies can pay their Canadian employees.

Doing It Yourself

Some South African companies decide to try processing Canadian payroll on their own. Though this is certainly ambitious, it can be done. Here’s how.

First, you’ll need to have a physical administrative address in Canada, have a business number, and open the right accounts with the Canada Revenue Agency.

Next, you’ll need to learn about payroll tax deductions, premiums, and contributions. These can vary based on your location as well as your employee classification, so it will take some time to learn. Once you’ve effectively calculated the right federal and provincial taxes as well as the premiums and contributions to deduct, you’ll need to maintain your payroll accounts and file your remittances on time. You’ll need to use proper Canadian software to get you going—using the same payroll software you use in South Africa won’t cut it.

Finally, you’ll need to learn the intricacies and complexities of Canadian payroll legislature and employment regulations, and stay up to date on changing laws. The more employees that get on board, the more time you’ll have to spend on your payroll process—you’ll have to answer questions, appease concerns, deal with HR issues, and keep up to date with procedures. Unfortunately, this will give you less time to concentrate on your other business responsibilities. 

Delegating

Owners of South African companies often find that the time and effort they are spending on payroll processing simply isn’t worth their time—their other tasks are getting neglected. So, they delegate the responsibility to the HR department. Regrettably, the HR manager who is now in charge won’t have the experience and expertise needed to continue on with the complex task. More time will be spent on learning the ropes, training on the new software, and keeping up with Canadian legislature. While all this extra time is spent on learning Canadian payroll, deadlines can be missed, other HR responsibilities can be ignored, and most importantly, costly mistakes can occur—and as the owner of the company, you’ll be liable for all of it.

You’re Not Alone

If you’re stressed out just reading about the issues above, you’re not alone. That’s why many South African companies choose to pay their Canadian employees through an Employer of Record. When you engage an Employer of Record, your Canadian employees become the employees of the EOR, so all the administrative tasks associated with payroll and HR become the responsibility of your partner. Employers of Record are experts when it comes to all things legislature and payroll. They’ll ensure that your Canadian employees are always paid correctly and on time, that your payroll accounts are always maintained, and that you’re always working in compliance with Canadian law.

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

Topics: Pay Canadian Employees, South African Companies

How International Companies Pay Canadian Employees

Posted by Stacey Duggan

|

Dec 24, 2014 9:00:00 AM

How_International_Companies_Pay_Canadian_EmployeesExpanding your business into other countries is a logical way to gain additional revenue and build your brand on an international scale. International companies do it all the time—but it’s not as easy as you might think, especially when we’re talking about expanding into Canada. Canada has stringent and often complicated payroll regulations, which can be challenging to follow properly. Though learning to pay Canadian employees legally and properly takes some time, you can overcome this challenge by learning the ropes or outsourcing.

Manage Payroll Internally

Some companies might think that they can just pay Canadian employees themselves. Though it’s certainly possible, it’s a risky endeavour. Going about it wrong can cost a business a lot of money in fines and penalties. The Canadian government takes payroll regulations seriously, and it won’t make exceptions for new international companies coming into Canada.

If international companies think they can avoid tax regulations by just sending Canadian employees cheques in Canadian funds or setting them up as independent contractors when they don’t actually meet the right criteria for being contractors, they can be in a heap of legal trouble. These two options are illegal and can lead to criminal penalties and large fines.

Rather, to pay Canadian employees, a foreign company will need to establish a presence on Canadian soil, sign up with the CRA, and create and maintain federal and provincial accounts. The company will need to learn about local payroll laws, which change depending on where the Canadian employees will be working, and calculate the proper taxes based on the province or territory they’re in. You’ll also have to classify each employee and base your taxes on this factor, too.

Regular remittances and filings will also need to be provided to the proper government officials and you’ll have to keep up to date with all legislative changes to ensure you’re always compliant. The whole process can be stressful and time consuming, and mistakes can easily be made. You’ll need to get very intimate with the Canada Revenue Agency, which can be a real hassle when you already have so many more expansion responsibilities to deal with.

Use an Employer of Record (EOR)

On the other hand, international companies can use an EOR to pay Canadian employees. This is an excellent alternative when you want to pay Canadian employees to work remotely or you’re just not ready to have a Canadian presence established yet.

When you use an EOR, all of your government filings are done for you. Your EOR already has experience and established procedures to deal with Canadian legislature. The EOR will make sure you’re compliant to Canadian laws and will file all the necessary payroll paperwork on your behalf—including taxes, CPP, EI, worker’s comp, allowances, expenses, and benefits.

Outsourcing your payroll needs to an EOR can save you the hassle and potential fees of learning and using the Canadian payroll system, so you have more time to dedicate to your expansion efforts.

Streamline Operations

International companies expand into the Canadian market all the time. But when they hire and pay Canadian employees, they need to ensure they’re compliant with all federal and provincial payroll laws established in the country or risk being fined. This can be difficult and time consuming. Though a foreign company can handle the burden of paying Canadian employees on its own, it’s often best to go with an Employer on Record for the task to ensure all the paperwork is filed and submitted properly and on time, so the expansion can go as smoothly as possible.

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

Topics: Pay Canadian Employees, International Companies

What You Should Know About Cross Border Payroll in Canada

Posted by Stacey Duggan

|

Nov 1, 2014 4:52:00 PM

What You Should Know About Cross Border Payroll in CanadaCross border payroll in Canada can seem like a simple matter. You hire a Canadian employee, convert US dollars to Canadian, and send them a cheque. If only it were that simple. When dealing with cross border payroll in Canada, there are numerous federal and provincial laws that come into play. These laws affect everything from tax rates to unemployment benefits. Failing to handle cross border payroll in Canada the right way can result in hefty fines and penalties. To help you avoid costly legal problems, here are a few things you should know about cross border payroll in Canada.

Safety Nets

Canada has a variety of social programs, covering everything from retirement to medical insurance. Employees and employers are both required to make contributions in different ways to these programs. How often, and how much those contributions are can vary greatly. The location of the work performed, the type of work performed, and even the age of the worker can all impact contributions. The responsibility for correctly calculating, withholding, and remitting these contributions falls on the employer. If any mistakes are made, the employer may be responsible for the employee's share of remittances, along with the associated fines and penalties.

Shifting Landscape

The laws governing cross border payroll in Canada are every bit as complex as US payroll and employment laws. And, like American laws, they can change often and with little notice. There's also the issue of differing Canadian provinces, which all have their own laws that affect payroll and employment requirements. It's a tough field to navigate, and the professionals who provide payroll services go through years of training before handling client accounts. Like most bureaucracies, there's little room for error, and ignorance of the law is not considered an excuse. 

Burden of Responsibility

At the end of the day, whoever is considered the "employer" is responsible for complying with all federal and provincial laws. The employer must handle all record keeping and accounting, and is answerable to the CRA for any mistakes that are made. For an employer with a small number of Canadian workers, this can be extremely burdensome. Those employers may have to set up an entirely separate accounting system to deal with just a handful of employees. Should any mistakes occur, the employer would be responsible for any fines and penalties. 

The Safer Path

Due to the structure for Canadian laws, the "employer" is considered to be whoever is directly paying the worker. This creates the option of using third-party employers, known in Canada as Employers of Record (EOR). To greatly simplify compliance, US companies can contract these EORs, who then pay the workers of the US company. The EORs are already established Canadian businesses, eliminating the hassle of setting up a presence north of the border. They're also highly experienced in Canadian payroll laws, and are staffed by well-trained payroll experts. This contracting option eliminates all of the difficulties of dealing with cross border payroll in Canada, and frees up businesses to focus on their core competencies. 

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

Topics: Pay Canadian Employees

Quebec Employee Vacation & Stat Holiday Entitlement

Posted by Stacey Duggan

|

Aug 14, 2014 8:30:00 AM

Hiring Quebec employees? What you need to know about sat holiday and vacation pay in Quebec, Canada.If you employ or are interested in employing Canadian workers, understand it’s hard (even for Canadians) to keep up with ever changing Canadian employment rules! Here at The Payroll Edge, we are often asked for information regarding vacation pay and statutory holiday pay, its meaning and entitlement. This is our first blog in the series ‘Employee Vacation & Stat Holiday Entitlement’ where we review these topics by province.

Trust us –we’re Canada’s Professional Employer Organization of choice.

If you employ Canadian workers in the province of Quebec, you need to verse yourself on the minimum employment standards in that province. Quebec employees’ rights to stat holidays and annual vacation time are governed by the ‘Act Respecting Labour Standards’ or ‘ALS’.

What do Employers need to know about Statutory Holiday Time off & Pay in Quebec?

All Quebecois employees working on a part time or full time basis are entitled to the following statutory holidays with pay:

1. New Year’s Day on January 1st
2. Good Friday or Easter Monday (One of these is mandatory but left to the employer’s discretion)
3. The Monday preceding May 25th (National Patriots Day)
4. June 24th (St. John the Baptiste Day)
5. July 1st or July 2nd when the 1st falls on a Sunday (Canada Day)
6. The 1st Monday in September (Labour Day)
7. The 2nd Monday in October (Thanksgiving)
8. Christmas Day on December 25th

Employers are required to pay part time or full time employees 1/20 of the wages employees earned during the four (4) weeks preceding the statutory holiday, excluding overtime.

For employees partially or wholly paid based on commission, employers must pay 1/60 of the wages earned during the preceding twelve (12) weeks.

If by nature of the business, the Canadian employee works on a statutory holiday, you as the employer has the option to pay them for that day their typical wages for the work completed or offer a compensatory holiday of one (1) day for which must be used three (3) weeks before or after the stat holiday.  Keep in mind that in either scenario, you must pay the statutory holiday pay as well.

St. John the Baptiste Day is one special holiday in Quebec where employees do not have to work the day before or after the stat holiday in order to qualify for holiday pay. If June 24th falls on a Sunday, Quebec workers are entitled to take off Monday the 25th from work.

What do Employers need to know about Vacation Time and Pay for Quebec Employee’s?

All employee’s regardless of what province are entitled to start accumulating vacation pay or time right from the commencement of their employment. What that entitlement is depends on the province of employment.

Quebec employees accumulate vacation time based on their ‘reference year’ as it’s called in Quebec, Canada. The reference year generally runs from May 1-April 30 each year but can be changed by employers to match employment start dates for instance. Employees in Quebec are entitled to two weeks of vacation time with 4% vacation pay. This two week vacation policy every twelve months lasts during reference years one to five. After five years of uninterrupted employment, Quebec employees are entitled to three weeks’ vacation time and 6% vacation pay.

Hiring a workforce in Quebec comes with great opportunity as well as stringent compliance standards. Ensure you know when and how to pay your Quebec employees by following The Payroll Edge blog. If your company is based in the United States, another country, or you are in Canada but unfamiliar with Quebec employment standards, your best option is to outsource your payroll to an Employer of Record provider based in Canada. An Employer of Record provider is similar to a Professional Employer Organization (PEO) and can provide companies seamless workforce expansion without the worry of understanding foreign employment compliance. Contact us for your Payroll Solutions in Canada.

7 Signs It's Time to Outsource Payroll

Topics: Pay Canadian Employees, vacation policy Canada, Canadian Businesses, Quebec Payroll, Quebec Stat Holidays, Quebec Vacation Time, Pay Quebec Employees

How to Pay Your Canadian Employees

Posted by Stacey Duggan

|

May 26, 2014 9:05:00 AM

how to pay your canadian employeesUS and Canadian businesses have adopted a variety of different methods for paying Canadian employees. Some of these methods are simple, but not entirely legal. Other methods adhere completely to the letter and spirit of the law, yet are prohibitively complicated. When it comes to paying Canadian employees, you don’t have to choose between simplicity and legality. There is a method of paying Canadian employees that strikes the perfect balance.

Payroll Service Providers

A payroll service provider, like The Payroll Edge, provides a simple, completely legal method of paying Canadian employees. They handle every aspect of your payroll needs, from calculating overtime and vacation pay to remitting government withholdings. Their services guarantee you accurate, on-time payroll processing for all of your Canadian employees.

A Step Farther

However, that’s just the beginning of the benefits you will enjoy when you engage the services of a payroll provider. Any payroll provider can do the math and deliver the pay cheques. Only a true partner like The Payroll Edge can offer you a full suite of services to go along with payroll processing.

Watching out for You

Most payroll service providers simply take the numbers you give them, deduct the proper amounts, and then cut a pay cheque. If you accidentally give them incorrect numbers, they’ll produce incorrect cheques. At The Payroll Edge, Certified Payroll Professionals check the payroll data for errors and inconsistencies before the cheques are printed, saving you the time and expense of rectifying payroll errors.

A Payroll Partner

They’re able to provide this level of service because they take the time to truly understand your business and payroll needs. They don’t rely solely on numbers, they also develop an intimate knowledge of your company, so they can spot errors before they become costly mistakes. This kind of partnership sets The Payroll Edge apart from other payroll service providers.

All this, and More

That deep understanding of your business needs makes The Payroll Edge a valuable partner in many other areas as well. They can assist with human resources management, legal compliance, and annual reporting. As a full service partner, they can take much of the administrative burden off of your existing staff, allowing them to focus on your core competencies.

The Right Way to Pay

Paying Canadian employees doesn’t have to be overly complex, or questionably legal. You want to do things the right way, without having to jump through a lot of administrative hoops. A payroll service provider makes paying Canadian employees easy and legal. To save yourself a lot of time and aggravation, contact The Payroll Edge today.

Canadian Payroll Tax Deduction Calculator

Topics: Pay Canadian Employees, Paying Canadian Workers, US and Canadian Business

Are Canada’s Policies Enforceable to American Parent Companies?

Posted by Stacey Duggan

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May 21, 2014 8:29:00 AM

American and Canadian Employment Laws. The Payroll Edge What happens when American parent companies open for business in Canada? How can an American company protect themselves when expanding business into Canada? 

Most American employers assume that with their expansion into the Canadian business market comes a simple transfer of their company policies and procedures all the while unaware of our complex employment law system. 

Although Canada is similar to the U.S. in many ways, our employment rules and regulations are not. Take for example that there is no at-will employment in Canada nor do we routinely drug test job candidates and unlike in the U.S., our workers compensation board is government run.a? Most American employers assume that with their expansion into the Canadian business market comes a simple transfer of their company policies and procedures all the while unaware of our complex employment law system.

U.S. employers operating or employing Canadian workers should either become well versed in Canadian employment standards and compliance or secure the services of an Employer of Record provider. Look at the following example of Canadian company Sure Grip’s misstep in trying to include a U.S. policy in their Canadian company policy:

As seen on Mondaq.com “Canada: Are Your Policies Really Enforceable?” By: Christopher Andree and Jennifer Emmans.

“Oliver was a 9 year management employee of Sure Grip Controls Inc. He had a written employment agreement but it did not deal with the termination of his employment.

Five years after he started, Sure Grip introduced an employee handbook. At the time Oliver signed an acknowledgement that he had received, read and agreed to comply with it. The handbook addressed termination by suggesting Sure Grip would pay only one week's pay for every full year of employment.

The handbook also stated, "I understand that the Sure Grip Controls Inc Management Team Handbook is not a contract of employment and should not be deemed as such."

In March 2011, in the context of a dispute over Oliver's entitlement to a profit sharing payment (which had been denied while Oliver was on medical leave due to a thyroid condition that required surgery) the company terminated him. 

Sure Grip took the position that Oliver's entitlement to pay in lieu of notice of termination was limited by the handbook to nine weeks. However, the trial judge found otherwise. She stated that while the parties could have made rights on termination a part of their written contract, the handbook clearly stated that it was not a contract of employment. 

Consequently, Oliver's entitlement was not limited to nine weeks' pay as suggested by the handbook.  Instead he was entitled to damages based upon the common law principle of reasonable notice. Oliver's damages were assessed at $87,684.00 based upon twelve months' wages and commissions. “

This case illustrates the repercussions to companies that attempt to integrate employment standards derived from another country into Canada. Additionally, trying to implement policies through an employee handbook that clearly states it is not to be used as a contract of employment and having employees acknowledge it in writing is simply not enough. American employers need to take notice of examples like these if they want to protect themselves from legal proceedings when hiring, paying or dismissing Canadian workers.

The Payroll Edge is a Professional Employer Organization (PEO) in Canada for American & foreign companies who would like to have Canadians on their payroll. Contact us today.

A U.S. Company Looks to Expand Tts Workforce in Canada

Topics: American Companies, ESA Compliant, Paying a Canadian, Payroll Regulations, Pay Canadian Employees

What U.S. Companies Need to Know About Stat Pay & Benefits in Canada

Posted by Stacey Duggan

|

May 6, 2014 8:30:00 AM

Employee ‘Benefits’ are Very Different Across the Border

In Canada the health care system is government run with the funding coming from employer taxation. All Canadian citizens can register for a health card and are eligible to have their basic medical needs covered under this program. 

Each province has its own system but in its simplest form it means that Canadians do not pay out of pocket for doctor’s visits, emergency care, surgery, most diagnostic testing and short term medical leave.  Many Canadian companies offer employees a benefit program that offers coverage for those medical needs that are not part of this government system such as prescriptions and dental care.

When a U.S. company looks to match their U.S. employee benefits with those being offered to a Canadian employee, this is an important differentiator that needs be considered. 

Many U.S. companies offer employees a 401k plan and can also offer something similar in Canada called an RSP (Retirement Savings Plan).  Some differences to note in regards to the two are that the Canadian RSP can be set up through any financial institution and the employee can choose to contribute after tax dollars into their own plan.

A 401k has a set annual limit that is the same for every employee regardless of income where in Canada the annual limit is 18% of salary to a maximum of $20,000. In Canada these unused limits can be carried forward indefinitely where in the U.S. contribution amounts have to be used each year or they are lost.

Canadian Holidays Vary Slightly by Province 

Canadian holidays are not the same as those in the United States and in fact vary slightly from province to province. The statutory holidays that are the same across every province include; New Year’s Day on January 1st, Good Friday on the Friday before Easter Sunday, Canada Day on July 1st, Labour Day on the first Monday of September and Christmas Day on December 25th.

Stat Holiday Pay Eligibility

Every province has different rules in regards to statutory holiday pay eligibility. For example, in Ontario an employee is eligible to be paid for a stat holiday right from day one, in Alberta the employee must have been employed for the last 30 days before the holiday with actual working days totalling more than 15 in order to start receiving this pay. Stat holiday pay calculation is based on previous hours worked within a certain timeframe.

Looking to hire a Canadian but Unsure of Canadian Employment Law?

The Payroll Edge’s EOR service is similar to a PEO service in the United States and works to take the strain off U.S. or foreign based employers hiring and paying Canadian employees but who are unfamiliar with employment laws in Canada. An Employer of Record (EOR) service like The Payroll Edge can take care of benefits packages’, payroll calculation (including statutory pay), payroll tax deductions as well as government remittances for your Canadian employees and so much more.

Download our free PDF "Statutory Holidays in Canada" Chart to Track your Canadian Employees Holiday Pay:

Statutory Holidays in Canada  The Payroll Edge PNG Picture resized 600

Topics: Employer of Record, Best Payroll Calculator, Paying a Canadian, Pay Canadian Employees, Paying Canadian Workers, public holiday pay, stat holidays

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