Home Blog

Blog

5 Things US Firms Look for from a Canadian Professional Employer

Posted by Karen McMullen

|

Jan 9, 2015 9:30:00 AM

5_Things_US_Firms_Look_for_from_a_Canadian_Professional_EmployerUS firms often look to engage a Canadian professional employer when they are expanding their workforce into Canada. When US firms outsource their HR and payroll needs in Canada, they can guarantee that they’re always compliant to Canadian laws from both an employment standards and taxation perspective.

Specifically, there are five things US firms look for from a Canadian professional employer when employing Canadians.

1. Employer of Record

A Canadian professional employer can be a great asset for US firms that are expanding across the border. When employing and paying Canadian workers, US companies must have an administrative address established, sign up with the CRA, and maintain the proper accounts with the payroll authorities. This takes a lot of effort and knowledge, so US firms often look to a Canadian professional employer to become their Employer of Record (EOR), which means that the US company’s employees become the employees of the Employer of Record, and thus, much of the administrative headaches are placed on the EOR instead. This leaves the US company with far more time to focus on more important business responsibilities.

2. HR Services

Learning a whole new set of HR rules and regulations can be very time consuming and can cause undue stress on a cross border expansion. For example, it is common place to have a potential new employee in the U.S. drug tested but in Canada this practice is absolutely forbidden.  A misstep such as this could a new Canadian venture with a human rights claim right off the bat.  Leave the HR regulations and responsibility with the experts in Canada.  A Canadian professional employer will take care of employee onboarding, contract negotiations, benefits packages and are also right beside you if the employment needs to end, ensuring all goes smoothly.

3. Health and Safety Compliance

Labour and health and safety laws in Canada are rigorous, often complicated, and constantly changing. It can be hard to keep up with the updates in order to stay compliant. Non-compliance can lead to big fines. A Canadian professional employer will have experts on staff to ensure compliance on behalf of US firms. They partner with the appropriate safety boards across the country to make sure Canadian employees are working safely and within the appropriate laws.

4. Insurance

A Canadian professional employer will have a comprehensive insurance package that will cover you and your employees from such things as theft, errors and general liability so you don’t have to extend your insurance portfolio across the border. They are also already registered with the applicable provincial worker’s compensation board, because in Canada worker’s compensation is a government run program, and take care of the calculation and filing of this government tax.

5. Payroll Services

Complying with Canadian taxes can be time consuming and complex. Both federal and provincial taxes must be taken into account, as well as the classification of all employees. Plus, the Employment Standards Act and payroll legislation must be taken into consideration to ensure government standards are met when it comes to paying your employees. You’ll also have to consider benefits, pensions, T4’s and ROEs, and you’ll need to provide the various federal and provincial government remittances in a timely manner. But when you engage a Canadian professional employer, all of this is handled for you, so you can breathe easy and not worry about making any errors.

A Great Benefit

US firms can greatly benefit from Canadian professional employers when expanding their business operations across the border. They will become the employer of record, take care of HR services, ensure health and safety compliance, protect you with insurance, and handle all payroll services.  

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

Topics: US Firms Expanding into Canada, Employer of Record

U.S. Employers Beware: 4 Major Changes to Saskatchewan’s ESA

Posted by Stacey Duggan

|

Jul 16, 2014 8:30:00 AM

U.S. Employers beware: Saskatchewan has updated their ESAAs an American or foreign employer of Canadian workers, you need to protect yourself from ESA violations. The government of Saskatchewan made significant changes to their separate pieces of Canadian employment legislation regarding employment standards, occupational health and safety and Canadian labour relations.

The previous versions of Saskatchewan’s Canadian employment laws were found separate from each other across different employment related pieces. As of April 29, 2014, the government of Saskatchewan announced a new Employment Standards Agreement to tie all those pieces together.

If you are an American or Foreign employer paying Canadian employees please take note that Canadian labour standards in Saskatchewan have changed:

1. Minimum Wage Changes

The current minimum wage in Saskatchewan is $10.00 per hour with an increase of twenty cents taking effect on October 1, 2014. Saskatchewan’s ESA sets out that any changes to the minimum wage will now be announced on June 30 of each year and any changes will take effect on October 1 of each year. Furthermore the minimum wage in Saskatchewan will now be indexed to the consumer price index.

2. Hours of Work and Overtime 

The ESA now allows employers to schedule their Canadian employees for either four 10 hour workdays or five 8 hour workdays. Employers and employees can also choose to average an employees work hours over 1, 2, 3 or 4 week schedules without a work permit. Overtime pay can now be banked by employees.

3. Leaves of Absence 

Service requirements for Maternity, Parental and Adoption leaves are reduced from 20 weeks to 13 weeks. 
New Leaves in the ESA include: Organ Donation Leave, Critically Ill Child Care Leave, Crime Related Child Death or Disappearance Leave and Citizenship Ceremony Leave. 

4. Termination 

Workers in Saskatchewan with more than 13 weeks of continuous employment are now entitled to notice or pay in lieu upon termination of their employment. 

Hiring workers in another country is great for expanding business but risky for Employment Standards Act violation liability. Staying on top of new regulations in the Canadian workforce is difficult. Gaining the services of an Employer of Record service provider (similar to a PEO) like The Payroll Edge allows U.S. and foreign companies the freedom of expansion without the compliance and potential for violating Canadian employment law.

For more Canadian employment law updates and payroll tips, subscribe to our blog. Click here for more information on our services or contact us to hear about how our Professional Employer Organizations helps hundreds of American and foreign companies get competitive while staying compliant.

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

Topics: US Firms Expanding into Canada, Employment Standards Act, Employer of Record, ESA, ESA Violations, ESA Compliant, Canadian Employment Laws, Employee Relations, American Business in Canada, Paying Canadian Workers, Paying Canadian Employees

US Companies Expanding to Canada: Payroll Tips

Posted by Stacey Duggan

|

Jul 9, 2014 9:05:00 AM

us companies expanding into canada payroll tipsFor US companies expanding into Canada, handling payroll obligations can be one of the biggest obstacles. Learning a new legal system, purchasing new payroll software, and meeting administrative requirements are just a few of the hurdles that must be overcome. These hurdles have caused more than a few US companies to give up on their Canadian expansion plans. Unfortunately, by giving up, those companies are missing out on one of the most lucrative global markets. If you've considering a Canadian expansion, don't get discouraged--here are a few tips to help you along.

Understand Your Obligations

Canadian employment and payroll regulations differ greatly from those in the US. This affects every aspect of your payroll obligations. Everything from worker classification to pre-employment drug tests are treated differently in Canada. Trying to operate the same way you do in the US is a non-starter.

To operate in Canada, you have to understand the rules you're required to obey. If you don't the fines and penalties will be substantial. This means that you need to learn an entirely new legal system, based different social and cultural mores.

You can choose to do this on your own, investing the time and effort to study the payroll regulations and employment laws. Or, you can work with a professional or specialist that already has training and experience with Canadian payroll regulations. Either way, the responsibility for abiding by Canadian laws rests on your shoulders.

Get the Tools

Due to the many differences between Canadian and US payroll requirements, your existing payroll software probably won't work in Canada. There are just too many differences, from filing deadlines to documentation requirements. US companies expanding into Canada typically need to purchase payroll software designed for Canadian payroll.

As you probably know, payroll software is readily available, and expensive. You can purchase your own software, and then invest the time and effort to learn how to use it. Another option is to work with a professional that already has the software. Companies that handle payroll will have the latest software, and the cost is shared by all of their clients. This saves you the upfront expense of the software, and saves your staff from having to learn a new system.

Administrative Setup

Before you begin operating in Canada, you need to get all of your administrative ducks in a row. That means setting up a presence in Canada, creating bank accounts, buying insurance, and setting up your accounts with the various government agencies. All of this needs to be done before you can legally start paying Canadian employees.

Setting all of this up on your own is possible; a lot of US companies expanding into Canada have done it. It's also time consuming and expensive. If you have any problems along the way, your expansion will suffer delays. The longer it takes to get everything ready, the longer it is before you start bringing in profits.

Have you considered the fact that maybe you don’t have to register a business in Canada? 

Consider this; if you’re hiring a Canadian workforce to benefit your U.S. clients and you will have no financial transactions taking place in Canada then maybe jumping the hoops of registering a business is not necessary. All you may need is an employer of record (EOR) service in Canada to take care of the workforce obligations such as taxation and employment standards compliance.  The Payroll Edge can be your EOR, commonly known in the U.S. as a Professional Employment Organization (PEO), so you can expand your workforce in Canada quickly and not have to worry about learning and keeping up to date with Canadian rules and regulations.

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

Topics: Payroll Tips, US Firms Expanding into Canada

Use it or Lose Vacation Policies: Not in Canada!

Posted by Stacey Duggan

|

May 29, 2014 8:30:00 AM

If you’re an American or foreign employer hiring Canadian employees, you may or may not have heard employee vacation policies are “use it or lose it”. Can it be true? Well, partially.

In Ontario, the Employment Standard Act or ESA for short, states that:

“Most Employees earn at least 2 weeks of vacation time after every 12 months. Employees are entitled to be paid at least 4 per cent of total wages earned as vacation pay.”

Employers are not required to let the worker carry vacation credits forward from one year to the next if they went unused. However, the employer is required to pay the Canadian worker their accumulated vacation pay whether the vacation time was taken off or not. There you go, the “use it or lose it” policy does apply –to vacation time NOT vacation pay!

Vacation Entitlement & Pay by Province The Payroll Edge resized 600

Fast Facts on Canadian Vacation Policies

  • Minimum vacation pay across Canada (excluding Saskatchewan) is 4 per cent of total wages
  • Minimum vacation pay in Saskatchewan is the highest in the country at 6 per cent of total wages
  • Minimum vacation time across the country (excluding Saskatchewan) is 2 weeks after 12 months
  • Minimum vacation time in Saskatchewan is the most generous at 3 weeks after 12 months
  • Quebec is the only Canadian province that includes tips and gratuities’ as part of total wages when calculating vacation pay
  • New Brunswick is the only Canadian province that includes only regular earnings when calculating vacation pay

Save our Canadian Vacation Pay and Entitlement Chart or bookmark this page to track your Canadian workers vacation entitlement and figure out based on province what earned wages includes when calculating the 4 per cent (or more) of vacation pay.

The Payroll Edge answers question like these on a daily basis for our American and foreign clients who employ Canadian workers. We are their Employer of Record (EOR) service provider or Professional Employer Organization (PEO) as it’s called in the United States. 

As specialists in Canadian employment law and compliance, we offer a complete HR management solution that takes the pain out of learning a whole new set of rules and regulations in another country.  

7 Signs It's Time to Outsource Payroll

Topics: US Firms Expanding into Canada, U.S. Business operating in Canada, Ontario, Canadian Employment Laws, vacation policy Canada

5 Reasons Why US Firms are Hesitant to Expand into Canada

Posted by Stacey Duggan

|

May 23, 2014 10:52:00 AM

5 reasons why us firms are hesitant to expand into canadaUS companies do more business with Canada than with any other foreign country. US firms expanding into Canada can find thriving markets that make the expansion well worth the effort. So, why aren’t more US firms expanding into Canada? Like any major business decision, there are many factors to consider prior to an expansion. When looking into those factors, some US businesses may become hesitant. However, thousands of US businesses have successfully overcome those factors, and gone on to successful expansion. While all of these reasons are worthy of careful consideration, they alone shouldn’t derail an otherwise lucrative expansion.

Cost

For US firms expanding into Canada, cost is often the leading reason for hesitancy. Setting up the accounts and infrastructure necessary for a successful expansion can be considerable. There are legal costs, administrative costs, logistical expenses, and more. However, with the proper organization and approach, these costs can be minimized. And, in the long run, they pale in comparison to the profits that a successful expansion can generate.

Complications

Moving a US business into Canada isn’t as simple as renting a building and opening your doors. You’ll need to deal with multiple bureaucracies while setting up your Canadian presence. The Canadian government has strict rules about everything from employee classifications to product labels. Learning to navigate all of the bureaucracies, while still running your US business, can be time consuming and difficult.

Legalities

US firms expanding into Canada are entering a completely different legal system. There are different laws governing employee retirement funds, employee termination, pre-employment drug screening, and much more. It’s a convoluted and complicated legal code that has a different foundation and direction than what US employers are accustomed to. It can take years to learn the ins and outs of Canadian employment and business law, and then it requires constant vigilance to keep up with changes to those laws.

Stretched too Thin

US firms expanding into Canada may be hesitant due to fears of stretching their existing staff to thin. If you’re using your current US staff to manage your Canadian expansion, you may be putting too much on their plate. While you want your Canadian expansion to be successful, you don’t want that success to come at the cost of damaging your US base. Asking your current personnel to learn a new legal, administrative, and payroll system, while still managing your US business, can be problematic.

At Arm’s Length

Most business owners like to manage their own business. They enjoy being involved in the day to day activities, and like keeping an eye on the business they’ve worked so hard to build. US firms expanding into Canada don’t always enjoy this luxury. Unless your US business is right across the border, you probably won’t be able to visit your Canadian site every day. This means handing the reins over to another person, and trusting them to do the job to your satisfaction.

An Easy Solution

Registering a business in Canada just to hire staff to represent your product or service may seem like more trouble than it’s worth. An Employer of Record solution, similar to a PEO in the U.S., may be able to take that trouble off your hands and allow you to stay where in you are. They can assess whether registering a business in Canada is a necessary step to your expansion or if they can employ your workforce from a legal and legislative compliance perspective in Canada allowing you representation without the hassle of understanding foreign employment compliance.

A professional payroll service provider, like The Payroll Edge, can help you navigate these issues, and get your Canadian workforce up and running. 

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

Topics: US Firms Expanding into Canada, U.S. Companies operating in Canada, U.S. Business operating in Canada

Subscribe to Email Updates

Recent Posts

Posts by Topic

see all