American companies and international employers that have US operations often see Canada as a logical next market. One of the challenges they face when expanding to Canada, though, is navigating the differences of Canadian employment law.
There are numerous examples, but one of the standouts is how workers’ compensation functions north of the 49th parallel. For many employers, a lack of experience can lead to hefty noncompliance fines. If you’re planning to expand to Canada and employ Canadian workers, here’s what you need to know.
Workers’ Compensation Is Government-Run
In the US, workers’ compensation programs vary from state to state. In a handful of states, workers’ compensation insurance can only be purchased from a state-run program. In other states, the government-funded program operates alongside plans offered by private insurers. These funds may be an option for high-risk employers who can’t be insured by private companies, or they might be used to cover companies that fail to purchase insurance.
In Canada, the situation is quite different. Each province in Canada has its own insurance program, which every employer must use. There are no private options for workers’ comp insurance in Canada.
Where to Register
As mentioned, each province in Canada operates its own program, with its own rules, to compensate injured workers. As a result, an employer must open an account in each province they plan to operate in.
For example, an employer in Ontario must register with the Workplace Safety and Insurance Board (WSIB). Their account will provide insurance for their employees in Ontario.
If this employer then opens a branch in Alberta and hires employees there, their WSIB insurance doesn’t cover them. The employer has to register with Alberta’s Worker Compensation Board to provide insurance for their Albertan employees.
When to Register
To make matters more complicated, not only do you need separate accounts for each province you operate in, each province has different rules about when and how to register.
In Ontario, you can’t apply for an account with WSIB until you have an employee start date. In Alberta, you can pre-register for an account and hire employees later on. In Nova Scotia, you could delay opening an account until you have three employees.
It’s important to check the rules about when you’ll need to register. In Ontario, you must register once your first employee starts. If you waited until you had hired three people, you could face hefty fines. Alberta’s pre-registration provides even less leeway for employers. You may open an account when you begin hiring employees, but you have no reason to delay.
Who Needs It
Workers’ compensation insurance protects both businesses and employees. Employees can receive compensation if they’re injured or become ill on the job. Business owners avoid costly lawsuits.
That said, which companies need to register for workers’ compensation insurance does vary from province to province. In most provinces, sole proprietors with no employees don’t need to register for an account.
The rules are a little different in the Northwest Territories, where every business must register within the first 10 days of starting operations. In British Columbia, almost every employer has to register, including people who are building their own homes.
In Nova Scotia, a few businesses are exceptions to the three-or-more employees rule. If you work in the fishing industry, for example, insurance is mandatory. The same is true in the restaurant business.
A Guide Through the Labyrinth
As you can see, the situation around workers’ compensation is quite complex in Canada. If you’re working in two or more provinces, or you’re feeling unsure, get a helping hand by working with an experienced employer of record. They can help you navigate the compliance maze, avoid penalties, and ensure you have the right insurance for your business