If you’re a business owner looking to hire employees in Canada, there are a few things you should know to make the process as smooth as possible. From understanding labor laws to knowing what benefits are required by law, here’s what you need to know.
Hiring Employees in Canada:
- Employment Standards: In Canada, each province and territory has its own set of employment standards that govern things like minimum wage, vacation pay, and overtime pay. Make sure you’re familiar with the employment standards in the province or territory where your business is located, as well as any other provinces where you plan to hire employees.
- Employment Contracts Employment contracts are an important part of the hiring process in Canada. These contracts should clearly outline the terms and conditions of employment, including the employee’s job duties, hours of work, and compensation. It’s important to ensure that your employment contracts comply with all applicable employment laws.
- Payroll Taxes: As an employer in Canada, you’re responsible for deducting certain payroll taxes from your employees’ paychecks, including Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax. Make sure you’re familiar with the rules and requirements for each of these taxes to ensure that you’re in compliance.
- Benefits: In Canada, employers are required to provide certain benefits to their employees, including workers’ compensation coverage and statutory holiday pay. Some provinces also require employers to provide health benefits, such as medical and dental coverage. Additionally you may be required to pay severance pay if you end up firing the employee without adequate cause. It’s important to know what benefits are required by law and to consider offering additional benefits to attract and retain top talent.
- Immigration Requirements: If you plan to hire employees from outside of Canada, you’ll need to ensure that you comply with all immigration requirements. This may include obtaining a work permit for the employee, providing proof of a Labour Market Impact Assessment (LMIA), or demonstrating that the employee is exempt from these requirements.
- Human Rights: In Canada, it’s illegal to discriminate against employees on the basis of protected grounds, such as race, gender, religion, and sexual orientation. Employers must ensure that their hiring practices are free from discrimination and that they provide a safe and inclusive workplace for all employees.
What if I Don’t Have an Entity in Canada?
Luckily, if you do not have a local entity or business in Canada, you can still hire an employee there. Employer of Record (EOR) providers like FoxHire enable companies to hire employees in Canada, and all across the globe, without an entity. The EOR becomes the legal employer for the employee you want to hire and handle all the items listed above for you. This allows you to focus on ensuring that the employee you want to hire performs well, while they handle all the legal, tax, and compliance issues.
No matter which way you decide to hire, hiring employees in Canada can be a complex process. By understanding the legal requirements and ensuring that you comply with all applicable laws, you can build a strong and successful team. If you’re unsure about any aspect of the hiring process, consider consulting with an employment lawyer or HR professional to ensure that you’re doing everything by the book.