Clients that utilize Globalization Partners' employer-of-record services may hire Canadian employees without opening a Canadian branch or subsidiary. Your candidate may be hired and onboarded quickly via Globalization Partners' Canada PEO, all in accordance with Canadian labor laws. Your in-country resource will work closely with your existing staff as if they were an employee of your company, satisfying your requirements and helping your firm thrive.
Through our comprehensive service, we relieve our Canadian customers of the burden of payroll processing, tax preparation, and regulatory compliance administration. As a global PEO expert, we make sure that employment contracts, benefits, employee fees, and (if required) severance and termination are all handled properly. We inform you of any developments in Canadian labor law that may affect your business.
If you do a good job of onboarding new employees, they will have a shorter learning curve, a more favorable image of the hiring process, and be more committed to your team from the start. Know that every hire is being handled by trained specialists in the field of human resources. Via Globalization Partners, you get quick and simple access to the knowledge of top professionals from over 185 different countries.
the potential for work in Canada
Canada's economy is ready for FDI and quick development; however, direct recruitment may be difficult because of bureaucracy. Many companies falsely assume that hiring new workers and setting up a payroll system won't be too difficult, only to run into a torrent of problems as a result of the various rules required by labor law.
Canadian legislation is quite stringent when it comes to employment. A "at will" workplace does not exist in Canada. Because of the overlap between federal and provincial regulations, it may be difficult to identify whether or not certain conditions must be satisfied. In the United States, it is often believed that by labeling employees as independent contractors, companies may sidestep compliance with employment regulations. It is possible in Canada for someone categorized as an "independent contractor" to be reclassified as an employee due to the government's stringent regulation of the phrase.
Canadian job applications are handled on a "provincial" level. Several aspects of employment, including withholding, access to social assistance, and notice periods, differ by province. Provinces and territories in Canada have different standards when it comes to employment legislation. Over 80% of Canadian employees are within the purview of provincial or territorial employment laws, while the other 20% are safeguarded by federal statutes.
Canadian workers often want their group benefit plan to have more perks than just the government's basic healthcare program. In order to take advantage of such rights, a U.S. company will often need either a Canadian headquarters or a Canadian signature. If a U.S. company pays Canadian workers directly, it would be responsible for worker's compensation and would have to check its employees' health and safety on a daily basis, which might be difficult to do from a distance.
When addressing a Canadian employee's remuneration and restrictions in a job offer letter and employment contract, it's important to keep the following Canadian conventions for perks in mind:
Concluding Employment Contracts in Canada
Think about how long it will take each new recruit to understand the province's ins and outs. While not required by law in Canada, employment contracts are strongly encouraged. These days, the vast majority of companies make their employees sign legally binding contracts defining the terms of their employment. The main constraint on the terms contained in an employment contract are the minimum criteria established in employment standards.
Canada is home to two official languages, English and French. Outside of Quebec, there are no rules dictating which languages may be used in employment contracts. Except for the Canadian province of Québec, where contracts are traditionally written in French, employment agreements are almost always drafted in English.
We recommend drafting a comprehensive employment agreement in the local language that specifies the employee's pay, benefits, and termination terms. In an offer letter or employment contract written for a Canadian employer, compensation must always be stated in Canadian dollars. Using Globalization Partners as your employer of record and PEO in Canada eliminates the need for you to draft an employment contract from scratch.
Time Spent Working in Canada
Employment laws at all levels of government (local, provincial, and federal) establish standards for minimum and maximum workweek lengths. Most nations have a 40-hour workweek as the norm. The legal limit on a worker's weekly hours of service varies by industry and location.
Most Canadian provinces and territories require an overtime premium of at least 1.5 times a worker's regular rate of compensation for hours worked in excess of 40 in a workweek, while the specifics of these requirements vary widely from one jurisdiction to another. There are 44 in Ontario and 40 in Quebec. An employer cannot fire or deport a worker for objecting to or refusing to perform overtime. Neither may they demand unpaid overtime or refuse to pay overtime rates.
Canada has a rich tradition of celebrating several different festivals.
As a country, Canadians value their time off and take it to celebrate their many holidays, both federal and provincial. Workers are eligible for paid time off on five national public holidays each year. Four of these holidays are recognized only at the federal level, while the other two are shared by the federal government and the provinces.
The first day of 2019 is a Sunday (National).
A Celebration of Island Freedom (PEI)
Louis Riel's life is being honored with a party.
Heritage Day is an annual event in Nova Scotia when the family may reflect on its past (BC, AB, SK, ON, NB).
A good Friday has arrived (except in Quebec).
Lent Begins on Holy Monday (QC)
Honoring the Late Queen Victoria (National except NB, NS, NL)
Celebration of Native Culture (NWT)
St. John the Baptist Day (QC)
It's July 1st in Canada (national).
Legal Break (AB, BC, SK, ON, NB, NU) Day of Labor (National)
Thanksgiving (National besides NB, NS, and NL) (National except NB, NS, and NL)
In memoriam (national except MB, ON, QC, NS)
Just now, on Christmas (national),
Boxing Day is today (ON).
Time Off in Canada
Workers at most firms get at least one week of paid vacation every year. In the provinces of British Columbia, Alberta, Manitoba, Ontario, and Québec, employees are eligible for two weeks of paid vacation after working for the employer for one year. Eligibility and participation criteria might change from one section of the country to another. Two to four weeks of paid vacation per year are standard; however, this might vary by company and length of service. Three to four weeks of paid leave per year is the norm for most employment in the professional sector (in addition to paid holidays). In Canada, vacation time cannot be rolled over from one year to the next. If the employee and the firm agree in advance, the employee may carry over a certain number of vacation days from one year to the next. Unrestricted or unlimited vacation time is an outlier in Canada that comes with significant challenges.
The Canadian Equivalent of Vacation Time Off
The vast majority of provinces in Canada do not provide paid sick days to working individuals. Long-term, paid sick leave is available to Canadian employees via Employment Insurance, the country's major social insurance program.
Pay for Parental Leave in Canada
Canada has some of the most generous unpaid parental leave legislation in the world, including paternity leave in the province of Quebec. Maternity breaks in Canada typically last around 17 weeks, but parental absences may go as long as 63 weeks. Parents who take parental leave and satisfy the qualifications may apply for government-funded unemployment insurance.
Health Care Coverage in Canada
The social security system makes medical care more accessible for the general public. With a Medicare card, a person may get discounted or free medical care and other government assistance, such as help paying for child care. Some states charge residents more for this service, while others depend on tax money or contributions to pay the bill.
Canadian law ensures that every citizen has access to "medically necessary and hospital physician services" in any public hospital in the nation. Canada's 13 distinct regions (ten provinces and three territories) each have their own health care systems that they pay for and run independently. In order to get the nationally mandated medical care, no personal funds are needed. Canadiens are guaranteed access to basic medical care, but "supplementary" services like dental and pharmaceutical insurance are left to the discretion of individual provinces.
Almost two-thirds of Canadians (or those with access to an employer-sponsored plan) have private, supplemental insurance to cover these expenses. Health care providers in Canada often get fee-for-service compensation from the government. Many people looking for work nowadays wrongly expect that their prospective company will offer them supplemental benefits like health, dental, vision, disability, and life insurance.
Cost-of-Living Adjustments in Canada
Benefits such as group savings programs and supplemental medical and dental insurance are often provided by companies to their employees.
Disciplinary Action in Canada
In Canada, it is common practice to include a probationary term in employment contracts. Three months is the typical length of a trial period. Probationary periods might last anywhere between three and six months at the most. If an employee is fired during their probationary period, they may be eligible for severance pay.
It's possible for an employer and worker in Canada to settle on a predetermined number of working years. Nonetheless, a court or other adjudicator may determine that a fixed-term contract is now for an infinite length if the parties extend it more than once or if the employee keeps working beyond the termination date.
In Canada, employers are required to provide enough notice of termination or pay in lieu of notice if they are too lazy to do either. Employers are required by law to provide employees with a minimal amount of notice based on the employee's length of service, which is determined by the applicable employment standards legislation. Nonetheless, under common law and Québec civil law, employees have rights that go beyond the absolute minimum of notice.
Not only should the employee's length of service be considered, but also the employee's age, position within the business, and the employee's ability to find other job when evaluating what is "reasonable" notice. Employment contracts (or collective agreements) may include notice requirements (or payment in place of notice) in the event of dismissal; however, the parties are not permitted to bargain for less than the necessary statutory minimum.
In both federal and provincial jurisdictions, employees who are laid off without cause may be entitled to severance pay (or pay in lieu of notice). Some sections of the Canada Labour Code (federal jurisdiction) include the following:
After 12 months of employment, a worker is eligible for either 2% of their base income for each year worked, up to a maximum of 5% of their base salary, or five paid days off.
The province of Ontario's employment law mandates the following:
Employees who have worked for their company for at least five years and whose business has a payroll of $2.5 million or more in the province are entitled to severance pay if 50 or more workers are laid off within six months due to the permanent termination of all or part of the firm.
Severance pay in Ontario is calculated by taking the employee's regular weekly wage and multiplying it by either the number of years they were employed or the number of months they worked (divided by 12 in the event of an incomplete year of service), whichever is greater (partial year).
In Ontario, the Employment Standards Act mandates a maximum of 26 weeks of severance compensation.
Payment of Canadian Taxes Required
In Canada, the federal government and the provinces work together to provide a social safety net that includes unemployment insurance and old-age security, among other benefits. Benefit amounts and who is eligible for them are both determined on a province-by-province basis. To pay for the country's social security system, a percentage of every Canadian worker's salary is deducted.
In Canada, we have a progressive tax system.
In 2021, the highest personal federal tax rate will be 33 percent.
Each province also has its own tax rate, which is often substantially higher than the federal rate.
Ontario's rate will be the highest in the country at 13.16 percent in 2021.
That of Québec is 25.75 percent.
A rate of 15.00% is in effect in Alberta.
In Canada, the government programs CPP and EI are supported by payroll taxes.
The maximum amount of salary that may be contributed to the Canada Pension Plan is $61,600 in 2021.
Each employee and employer may contribute up to $3,166.45 (CDN) in 2021.
A worker's "insurable earnings" will be capped at $56,300 CDN in 2021 (the employer will pay $1.58 per $100 in earnings up to that level, and the employee will contribute $1.58 per $100 in earnings beyond that threshold).
In Québec, the exact amount is $1.18 per $100 of income.
The Social Security system provides several benefits to families with children. The Child Tax Credit, the Child Care Tax Credit, and the Universal Child Care Benefit are all examples.
Several programs exist to help the disabled if they meet certain requirements. Some are designed to help people who have acquired lifelong disabilities, while others are aimed at assisting those who have received transitory injuries that are hindering their ability to carry out regular activities.
Unemployment insurance is an integral part of our social safety net. These are short-term benefits that may be received for a variety of reasons, including but not limited to unemployment, pregnancy, sickness, and compassionate leave.
Old Age Social Security (OAS) is a supplement paid to those 65 and older who are receiving Social Security benefits. The requirements for receiving this pension include being a Canadian citizen or permanent resident at the time your OAS pension application is approved, living in Canada for at least 10 years after turning 18, and making contributions to the system. It is not necessary for the beneficiary to have stopped working in order to get this pension. The Canada Pension Plan is an alternative retirement savings plan. This might be the source of income for disability and survivor benefits as well.
Advantages of Global Cooperation for Everyone
Setting up a subsidiary or branch office in Canada is a time-consuming and expensive procedure that is not worth it just to recruit a few people. Workers in Canada are afforded extensive protections by law, but this also requires a thorough understanding of local customs and regulations in order to ensure their observance. With Globalization Partners' assistance, incorporating a Canadian business is a breeze. We can help you discover and hire the right person, handle HR and payroll, and comply with local laws without the burden of setting up a foreign branch office or subsidiary. With our state-of-the-art SaaS platform and app, you can be certain that your Canadian PEO and worldwide employer of record model is in capable hands.
Canada-based businesses may rely on Globalization Partners for a complete PEO or employee leasing solution for staffing needs.
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