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How Canadian Contractors Working in the US Get Paid

Posted by Karen McMullen

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Aug 8, 2016 9:00:00 AM

How_Canadian_Contractors_Working_in_the_US_Get_Paid.jpgHiring Canadian contractors can be a great way to expand your workforce and labour power for whatever projects your business is undertaking. While it may seem like it will be simple to pay your Canadian contractors working in the US, there are many regulations set in place by the Canada Revenue Agency (CRA) that dictate how Canadian contractors must be paid when working in the US. There is very little transferrable information between American and Canadian labour laws and payroll regulations, meaning that companies who operate in both countries are responsible for being intimately acquainted with two large sets of legal requirements.

Paying Canadian contractors working in the US can be a balancing act, but is well worth doing correctly to avoid any potential legal issues. Here are some of the ways that Canadian contractors working in the US get paid and some guidance for best payroll practices.

Below Board Payroll: Worth the Risk?

Attempting to work around payroll laws may appear to be an enticing and simple solution to complex regulations that accompany Canadian contractors working in the US. Misclassifying employees as independent contractors to avoid working within the Canadian payroll regulations can result in fines, payment of back taxes, and, in some cases, criminal consequences. If your company is struggling to follow payroll regulations, there are solutions to managing the complexities of paying Canadian contractors working in the US that can increase the efficiency and productivity of your company’s payroll process, allowing you to focus on getting the job done!

Toeing the Line to Avoid Legal Issues

For companies that have in-house payroll staff, keeping the payroll process legal for Canadian contractors working in the US can be a lengthy process, but is well worth the energy to avoid any potential trouble with the CRA. Expanding the purview of your payroll personnel to include Canadian payroll laws will involve extensive training on the intricacies of Canadian labour laws and payroll regulations. Canadian contractors working in the US can be paid directly by the companies they are completing work for, providing the payroll process is in compliance with all regulations.

Finding a Partner to Streamline Your Payroll Process

In cases where learning the ins and outs of Canadian payroll is not feasible for your company in order to pay your Canadian contractors, it is useful to hire a professional employer organization (PEO). PEOs are professional organizations that allow your company to easily pay your Canadian contractors by adopting the legal responsibilities for your employees as well as the administrative tasks that are involved in the hiring and retaining of all employees. Rather than wading through huge amounts of information regarding Canadian payroll regulations, a PEO can streamline the process of paying Canadian contractors by managing the human resources needs for international employees.

A PEO reduces the risks and obligations that are associated with hiring Canadian contractors working in the US, as it shares any potential liability and responsibility between your company and itself. PEOs have all of the know-how regarding payroll regulations, not to mention all of the organizational tools and infrastructure set up to accurately and legally pay your employees. Hiring a PEO allows your company to remain focused on your business while providing you with peace of mind that your payroll process has been implemented efficiently and that it is in compliance with all governing regulations.

In order to avoid legal ramifications when paying Canadian contractors working in the US, the benefits of seeking professional payroll assistance far outweigh the costs of hiring a PEO. Partnering with a PEO provides cost and time efficiency as well as peace of mind to US businesses that employ Canadian contractors while providing their contractors with error-free and reliable payroll services.7 Signs It's Time to Outsource Payroll

Topics: US and Canadian Business

How to Pay Your Canadian Employees

Posted by Stacey Duggan

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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

Americans Conducting Business in Canada Beware: Border Patrol Keeping Tabs

Posted by Stacey Duggan

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Apr 29, 2014 9:56:00 AM

 

As seen on thestar.com “Border officials to share travellers’ info with federal government” by Nicholas Keung.

Effective summer of 2014, Canadian and U.S.A. border patrol services will start keeping tabs on Canadians and Americans entering and exiting either side of the border. The Entry/Exit program initiative will further increase both countries security and has already begun taking note of third country national’s information including those arriving to Canada on work permits, foreign students and visitors. 

The Entry/Exit program will be in full effect on June 30 2014, and will be extended to all Canadian and American citizens crossing the border.  

Canada and the USA border patrol services will soon be collecting both countries citizens information as part of the new Entry/Exit initiative from The Payroll Edge

What Information will the Canada Border Services Agency (CBSA) be collecting and sending to federal departments?

  • Travellers Name
  • Date of Birth
  • Nationality
  • Gender
  • Document Type
  • Work Location Code/Port of Entry Code
  • Date and Time of Entry
  • Country where travel document was issued

How does the Canada Border Services Agency use this information? Simple; data on entry to one country would serve as a record of exit from the other. This information will enable government officials to track illegal activity such as citizens scamming Employment Insurance or child tax benefits programs when they are not in the country.

So how does this affect American employers employing or paying Canadian workers? If you conduct business in Canada -and travel there regularly, be prepared to hand over your data to border officials and have it shared between both countries federal departments.  

If you have a U.S. employee who crosses the border into Canada on a regular basis and is away from their country of residence for long periods of time, ensure that you are aware of the rules surrounding foreign travel as it may not only affect the employee’s and companies taxation liabilities, misuse will result in their inability to cross the border at all.

American Employers conducting business in Canada should also be aware of the status of their permanent residency (if applicable) as this will now be tracked under the new Canada-U.S.A. border data exchange program. Permanent residents must live in Canada for a total of at least two out of every five years to remain eligible for the program.

If you conduct business in Canada and wish to avoid the complications of your U.S. employees crossing the border to service your clientele here, employing a Canadian may be the best solution.  To do so without the complexity of registering a business in Canada and understanding foreign employment law, an Employer of Record Service in Canada (known as a PEO in the U.S.A.) can help. A Canadian Employer of Record takes care of everything for American employers retaining Canadian workers including payroll tax deductions, employment standards compliance and HR management solutions. Contact The Payroll Edge to learn more. 

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

Topics: Professional Employer Organization, Government Compliance, PEO, Canadian Employer of Record, American PEO, American Business in Canada, Canadian-Based EOR, US and Canadian Business

3 Differences in Employment and Labour Law in Canada and U.S.

Posted by Stacey Duggan

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Apr 14, 2014 3:22:00 PM

3 differences in employment and labour law in canada and usOn their surface, Canada and the US can seem very similar. However, even a quick glance at the employment and labour law in each country reveals stark differences. A US business expanding into Canadian markets needs to understand and respect the differences in employment and labour law. A US company that tries to operate under the same rules in Canada as they do in the US will soon conflict with Canadian authorities. While there are many differences between Canadian and US employment and labour law, these three examples demonstrate just how wide the disparities can be.

Terminating Employment

Throughout most of the US, employees work "at will." This means that employers can dismiss them without cause, and with little or no notice. In most cases, it is up to the employee to prove that they were dismissed without cause to qualify for unemployment compensation.

In Canada, an employee who is to be terminated, even with cause, must be given appropriate notice, or be paid in lieu of that notice. The amount of notice required, or the amount to be paid in lieu, varies from province to province, and can be affected by the length of employment, overall wages, and employee classification. Any contractual provisions that reduce the required notification or payments in lieu below statutory minimums are unenforceable and will be ignored by the courts.

Employees with Disabilities

Both countries have statutory provisions against discrimination against employees with disabilities. In the US, the definitions of "disability" are limited, and the accommodations required are also limited. A US company is not required to undertake accommodations that would cause an undue hardship or burden. While they can't discriminate against employees with disabilities, they aren't required to undertake drastic measures to accommodate them, either.

In Canada, employers are required to make accommodations, even if they pose and undue hardship or burden on the business. This requirement will vary depending on the disability, and the nature of the business. Moreover, unlike the US, conditions like alcohol and drug dependency fall under the definition of a disability. A US-based company that refuses to make accommodations for treatment time or other dependency programs could run afoul of the non-discrimination laws.

Changes to Employment

In the US, employers are largely free to change the terms and nature of the employment as they see fit. If the employee continues to work, this is viewed as their acquiescence to the changes. Essentially, a US company can make wholesale changes to the contract of an employee and, if the employee doesn't quit, they are viewed as having agreed to those changes.

Canadian employment and labour law takes quite a different view on the matter. If the contract or terms are changed after employment, the employee is owed a consideration or raise. Continued employment is never viewed as consent to the changes. The only consent accepted by the courts is active, willing, un-coerced consent to the changes. If the employee refuses to consent, and is terminated, the employer will likely owe them any payments, bonuses, holiday, and overtime pay that they would have earned during the period of statutory notice.

Scratching the Surface

These three examples hardly begin to describe the differences between US and Canadian employment and labour law. While there are many similarities, the US and Canada are very different countries. Where US employment and labour law is designed to protect businesses or, at best, strike a balance, Canadian employment and labour law is designed to protect the workers. To avoid running afoul of these differences, it's usually best to consult with a professional payroll or employment agency. 

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

Topics: US and Canadian Employment and Labour Law, Employment and Labour Law, US and Canadian Business

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