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Canadian Privacy Laws Make Expansion into Canada Difficult!

Posted by Stacey Duggan

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Dec 11, 2014 2:30:06 PM

Canadian_Privacy_Laws_Make_Expansion_into_Canada_DifficultFor a U.S. company employing a Canadian the rules and regulations surrounding payroll and employment standards compliance are complicated enough.  Add to this the strict rules of Canadian Privacy Law, employing someone in Canada can seem pretty daunting. 

Because of them, information sharing of a Canadian’s personal information with any U.S. linked organizations may be in violation of the law. Below we go over the factors a U.S. organization must consider upon deciding to employ and pay a Canadian when it comes to privacy.

Canadian Privacy Laws make sharing of information with U.S. organizations extremely hard.

Canadian Privacy Laws are set out and mandated by PIPEDA –; the Personal Information Protection and Electronics Act. 

As outlined in this article by Gowlings; the overarching rule in Canadian privacy legislation is that organizations may only collect, use or disclose personal information for purposes that a reasonable person would consider appropriate in the circumstances. This rule applies regardless of the consent of the individual whose information is in question.

One cannot avoid the reasonableness standard by obtaining consent to an objectively unreasonable collection, use or disclosure of their information. Conversely, in most cases, organizations must have either the express or implied consent of the individual to the collection, use or disclosure of their personal information.

All four of the major private-sector statutes apply similar principles:

  • Personal information may only be collected, used or disclosed with the knowledge and consent of the individual.
  • The collection of personal information must be limited to what is necessary for identified purposes.
  • Personal information must be collected by fair and lawful means.

Personal information must be protected by adequate safeguards appropriate for the sensitivity of the information — highly sensitive information, such as financial data, must be provided with a proportionately high level of security that should include physical, organizational and technological protection measures. Individuals must be provided with easy access to information about an organization’s privacy policies and practices. 

In fact, many Canadian organizations include a privacy matrix as part of their onboarding processes to ensure that the worker understands their rights and the companies’ privacy policies.

A U.S. company hiring a Canadian must familiarize themselves with the PIPEDA to ensure that they have met their due diligence when collecting personal information, such as a social insurance number and banking information, from their Canadian worker.

The Storage of Data Rules to Secure Canadian Employee’s Personal Information.

Although the PIPEDA Act does not set out any particular safeguards to secure an employee’s personal information, it is the responsibility of the employer to ensure personal information is adequately protected. An employer is responsible to ensure safe storage of personal information as set out under PIPEDA. The responsibilities on an employer to ensure safe storage of data include:

  • Protect personal information against loss or theft.
  • Safeguard the information from unauthorized access, disclosure, copying, use or modification.
  • Protect personal information regardless of the format in which it is held.

Be sure to cover these bases before diving into paying Canadians and if you’d like to hear more about The Payroll Edge’s Employer of Record EOR and Professional Employer Organization PEO please contact us.

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

Topics: Paying a Canadian, Canadian Privacy Laws

A Canadian Payroll Class May Not be The Right Choice

Posted by Stacey Duggan

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Jul 29, 2014 8:30:00 AM

Canadian Payroll Class FrustrationWhen it comes to understanding Canadian payroll, your first instinct may be to enrol in a payroll class to help your payroll and HR department learn the specifics.  For those companies outside of Canada, this search is in effort to understand foreign payroll compliance and is often handed over to someone hesitant to learn a new set of laws when they are already comfortable with their own. 

Canadian rules and regulations when it comes to paying an employee can be vastly different, especially when compared to a country such as the United States.  These differences can exert a level of frustration on the payroll or HR person who is already schooled in one set of legislative compliance.

When it comes to choosing a Canadian payroll class ensure that part of the curriculum covers the following:

  • Federal payroll taxes including the Canada Pension Plan, Employment Insurance and Worker’s Compensation.
  • The additional provincial payroll taxes as they vary from province to province (ensure the class covers the province that most interests you as many payroll classes will avoid Quebec due to its complicated nature)
  • Employee and Employer deductions and the remittance schedules assigned to each tax account.
  • Employment standards when it comes to overtime, statutory holiday pay and vacation pay and a section on how these vary from province to province as well.

Not only should the above information be covered in a Canadian payroll class but the payroll and HR department need to be aware of the over 1700 rules and regulations when it comes to the Employment Standards Act which also varies from province to province.

Ensure that the Canadian payroll class you register your in house payroll person includes information on:

  • Health & Safety and a Return to Work program should your worker be injured.
  • Termination and pay in lieu of notice.  Note: there is no ‘At Will’ employment in Canada.
  • How to properly compose an employment contract ensuring that all clauses meet employment minimums.

What are the chances that not only will the Canadian payroll class offer all of the above, but that your payroll and HR person taking the class will retain all of the information?  How will they keep up to date on the ever-evolving employment regulations and changes to tax law?  Most likely the Canadian payroll class will offer nothing more than an overview of the functions and processes of paying an employee

What outsourcing your Canadian payroll to The Payroll Edge will bring:

  • Complete compliance when it comes to calculating payroll taxation.
  • Correct, on time remittances with all government bodies in every province.
  • Employment standards expertise ensuring you meet your due diligence.
  • Certified experts who understand the law and keep up to date on its changes.
  • The freedom to focus on your business.

Canadian payroll processing doesn’t have to be complicated and you don’t have to take a new field of study to get it done. The Payroll Edge is a Canadian based payroll processing company specializing in helping American and foreign companies expand their workforce into Canada by acting as the employer of record (EOR), a similar service to a PEO in the U.S.  We also take care of small businesses in Canada who don’t have the time or expertise for payroll.

The Payroll Edge offers seamless workforce expansion into Canada without the daunting task of understanding foreign employment compliance. Contact us today for more information on how we can help your business.

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

Topics: Canadian Payroll Deductions, Employee Payroll Deductions, Payroll Tax Tips, U.S. Business operating in Canada, Paying a Canadian, Calculating Taxes in Canada, Canadian payroll class

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

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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

Employer of Record Service: Your American Business Presence in Canada

Posted by Ray Gonder

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Mar 26, 2014 10:21:00 AM

American Business Expansion into Canada and when you should contact the Payroll Edge for our Employer of Record Services Great! Your expanding operations north of the border but with your American business expansion into Canada you wonder; How am I going to pay my Canadian employees?

Unless you are using an Employer of Record Service in Canada (similar to a PEO in the U.S.) and want to hire an employee you must register your business with the Canadian government. Federally registering is the first step and then registering a business presence in each province and / or territory (Canada has 13) you are operating in would be the next step. Of course this process can be even more complicated if you are a Limited Liability Company (LLC) in the US as Canada has no similar status and again has different rules depending on the province or territory.

Other Government Accounts U.S. based companies will need to pay Canadian Employees;

Registering your business is not the only registration you will do as a new business in Canada. You must also apply for a payroll tax account number into which you will remit the employer and employee taxes for the Canada Pension Plan and Employment Insurance.

These two taxes are in every province and territory across Canada with the difference being that each province has its own rate in which these taxes are calculated. Keep an eye on the rates as they often change for each province at the beginning of each year and its important to know when paying a Canadian. Some provinces have other payroll taxes such as the Employer Health Tax in Ontario and the Health Services Fund in Quebec so it’s important to know what other type of taxes are associated with the province the work is being done in. It’s worthy to note that as a company in Canada, you will be given a weekly, semi-monthly, monthly or quarterly deadline for these payroll taxes but for those provinces that have extra taxes (like the 4 provinces that have a health care tax) your deadlines might be on a different schedule. The Canadian Government will not hesitate to apply interest and penalties to slow paying accounts.

The best advice an American company should take when hiring workers in Canada is to use a Canadian Based Employer of Record service. Using an EOR like The Payroll Edge enables U.S. based companies to focus on their core business rather than learning a whole new payroll entity. Contact The Payroll Edge today! 

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

Topics: Payroll Tax in Canada, Payroll Tips, EOR, Employer of Record, Payroll Tax Tips, U.S. Business operating in Canada, Paying a Canadian, Canadian Employer of Record, American PEO, Payroll Tax Laws in Canada, American Business in Canada, Canadian-Based EOR, Canadian EOR, PEO Services, Canadian Payroll Services

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