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  1. Overview: Canada
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  3. Global HR Compliance
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Global HR Compliance in Сanada

If you hire an international workforce or plan to hire, then the Hiring and Firing Workforce in Canada Guide below will help you understand the nuances of labor legislation in the country.

When the company is planning to enter a new foreign market in Canada and needs to employ a local national there, the first question to answer is how it will make local hires.

We have designed a Global Employer of Record service to help you outsource the global employment of your foreign workforce to companies like ours.

This solution helps you employ your global sales force in Canada as well as in other 190+ countries of the world, provide pay and benefits to your employees, and administer any business expenses with our help.

Our solution differs from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks, while we bear all employment risks, not you.

So, it looks like hiring your in-house sales force in your home country. However, you focus only on your global business development while we administer your global HR. In addition, you don’t need to open your entities in foreign countries and can leverage our infrastructure in Canada instead. With our service, you can become a global company with reduced costs and minimized time and effort.

Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.

Global Employer of Record is a 100% compliant solution that guarantees you and your employee’s full compliance with local legislation in Canada.

We are experts in global workforce employment in Canada, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need it, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Canada.

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Employment Agreements in Canada

  • Permanent employment contracts
  • Casual employment contracts
  • Fixed-term contracts

If a contract does not specify a term of employment, the contract is presumed to be indefinite. Parties may specifically agree to a fixed-term contract which avoids the reasonable notice obligation provided employment ends at the fixed-term date and is not renewed.

Care should be taken when constructing termination clauses in the fixed-term contract. An Ontario court found that where a contract does not contain a termination clause or the termination clause is ambiguous or unenforceable; the employer will be required to pay all of the compensation a fixed-term employee would have been entitled to for the full duration of their contract. In Howard v. Benson Group Inc., the employee was entitled to the full payment of his five-year contractual term despite being employed for less than two years.

Employment Termination and Severance Pay (Dismissal) in Canada

Under Canadian law, an employment relationship may be terminated without cause if the employee is provided with reasonable notice or pay in lieu of reasonable notice. If termination is for cause, the terminated employee is not entitled to any financial compensation beyond the termination date. However, the termination must be justified by demonstrating serious misconduct such as willful disobedience, chronic neglect of duty, serious incompetence, unlawful or dishonest conduct, violence, sexual harassment, insubordination, or disclosure of confidential information. Issues such as general dissatisfaction with the performance, “fit” and “chemistry” issues, or lack of effort or attitude are less likely to be accepted as cause to offset the reasonable notice requirement. Except in cases of egregious misconduct, the employer must demonstrate they have warned the employee of the issue, allowed sufficient time for improvement, and given a final warning before dismissal.

Notice Period in Canada

The requirement to give notice or payment in lieu of notice arises under labor standards statutes and the common law. Each jurisdiction in Canada provides a minimum statutory notice period for termination without cause. In most provinces, notice is equivalent to one week per year of service up to a defined maximum number of weeks, usually eight weeks, but only two weeks for federal employers under the Canada Labor Code.

The employer can provide working notice, pay in lieu of notice , or a combination of notice and pay equivalent to the requirements. Often when an employee is terminated without cause, employers are required by statute to continue all benefits the employee received prior to termination for the statutory period of notice. This normally includes life insurance, accidental death and dismemberment, medical, drug, dental, and short-term and long-term disability insurance. In some situations, notice is not required, such as when an employee is hired for a definite term and is not dismissed before the end. Notice is not required when dismissal is for just cause (or other comparable statutory standards).

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Severance Payments in Canada

Only federal or Ontario jurisdiction employees are entitled to statutory minimum severance pay. Severance pay has a specified meaning that should not be confused with statutory notice and common law reasonable notice. In Ontario, severance pay must be provided to employees with at least five years of service. An employee is entitled to severance pay at the rate of one week’s regular wages for each completed year of service to a 26-week maximum (past years are protected). Under federal law, any employee with 12 months’ service terminated without cause is entitled to two days’ wages for each completed year of continuous service, with a minimum of five days’ wages. As with termination pay, courts have determined that severance is subsumed by the common law notice period.

Employee Benefits and Contributions in Canada

Each Canadian jurisdiction has employment standards legislation setting minimum standards regarding matters such as minimum wage, work hours, overtime pay, holiday pay, vacation, and other leaves (pregnancy, parental, sick leave, etc.).  Parties to an employment contract (or collective agreement) cannot contract out of these standards of public order except to provide for terms that are more favorable to employees.

Probation Period in Canada

The common law does not imply a probationary period. Whether or not such a period exists in common law depends on the contract terms between the parties. Thus, a probationary period is often included in an offer of employment letter in a nonunionized situation or as a term of the collective agreement in a unionized situation.

Overtime in Canada

Alberta  requires that you pay overtime after 44 hours worked in a week rather than the typical 40. Alberta does abide by the eight-hour workday rule, so any additional time after eight hours must be compensated by 1.5 times the employee’s normal pay. Special rules may apply on a case-by-case basis if employees are paid partly or entirely through commission or if they work a compressed work week.

B.C.  overtime laws follow the typical overtime in Canada structure of 1.5 times the standard pay for more than 40 hours worked per week. But the daily structure is unique in both hours worked and compensation was given.

British Columbia  still follows the same eight-hour workday, but employees only receive the standard 1.5 times their standard pay for the first four extra hours. After working 12 hours, each additional hour is paid double the employee’s standard wages.

Manitoba  follows the traditional 40-hour workweek and eight-hour workday that’s most customary when determining overtime in Canada, and overtime compensation is the typical time-and-a-half. Working overtime is voluntary, so employees in Manitoba are never required to work more than eight hours daily or 40 hours weekly.

New Brunswick’s overtime rate is based on the minimum wage multiplied by 1.5. Employees already compensated more than the overtime rate don’t qualify for overtime compensation. Employees who qualify for overtime only receive it after working more than 44 hours a week.

The overtime rate in Newfoundland and Labrador is based on multiplying the current minimum wage by 1.5. Overtime is only granted when employees work more than 40 hours in a week.

In  Nova Scotia, overtime rules vary depending on the profession. Most employees receive 1.5 times their base pay after working more than 48 hours in a week. Some industries such as oil, gas, and fisheries base the overtime rate on minimum wage rather than base pay. In those situations, the 48-hour workweek still applies.

Ontario employees are paid 1.5 times their base pay if they work more than 44 hours in a week. Most employees in Prince Edward Island are paid time-and-a-half after working 48 hours in a week but some occupations have different overtime structures.

Quebec follows the typical 40-hour workweek, and overtime is paid at 1.5 times the employee’s standard pay rate. Employees may request time off instead of overtime compensation. In some situations, employees may decline to work overtime if they’ve already worked 50 hours a week.

For the most part, Saskatchewan follows typical overtime in Canada standards, giving employees 1.5 times their typical wage when they work more than eight hours a day or 40 hours a week. But some professions aren’t eligible for overtime, including loggers, fishers, and trappers.

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Working Hours in Canada

Although the standard varies, all Canadian jurisdictions define the standard workday and workweek. Most provinces have an eight-hour standard workday and a more variable standard workweek of 40, 44, and 48 hours before an overtime premium pay rate is required.

Annual Leave in Canada

Under Canada’s employment standards statutes, employers must provide paid vacations generally after one year of employment. All provinces set the minimum vacation with pay at two weeks after completion of a prescribed service period and vacation pay. Most provinces also provide three weeks of paid vacation after a defined service period, generally around five years. Only Saskatchewan provides four weeks of vacation after 10 years of service. In addition, federal employees are entitled to a minimum vacation of three weeks after five years of employment and a minimum vacation of four weeks after ten years of employment.

Sick Leave in Canada

Sick leave is generally not a legal requirement; however, employment contracts often provide some form of short-term sick pay as a contractual benefit. For eligible employees who are temporarily unable to work due to illness or injury, there are several government programs in place to provide payment, including:

  • Provincial workers’ compensation schemes to provide pay during absences due to occupational illness or injury.
  • Federal Employment Insurance program provides benefits to Canadians who are suffering from long-term illness, are pregnant, caring for a newborn or adopted child, or caring for seriously ill family members with a significant risk of death.

Parental Leave in Canada

Maternity Leave

All jurisdictions in Canada provide women with 16 to 19 weeks of unpaid leave for the birth of a child. New mothers are entitled to a maximum employment insurance maternity benefit of 15 weeks. Benefits can be paid as early as 12 weeks before the expected date of birth and can end as late as 17 weeks after the actual date of birth. To be eligible for maternity leave, an employee must meet the requirements of any “qualifying period,” which varies from zero to 12 months of employment by jurisdiction. Each jurisdiction regulates the timing of maternity leave. Under the Canada Labour Code, a woman who is an employee of a federally-regulated employee may begin her maternity leave up to 13 weeks before her due date. In Ontario, a woman may begin her maternity leave as early as 17 weeks before the expected delivery date and at any time when there is a live birth, even if it occurs more than 17 weeks before the due date Employees decide when they will commence maternity leave. In Ontario, employees must notify their employer in writing two weeks before maternity leave and, if requested by their employer, must provide a medical certificate verifying the expected delivery date.

Paternity Leave

Only in Québec are fathers entitled to paternity leave for up to five weeks. However, fathers are also entitled to parental leave in all jurisdictions.  Mothers and adoptive parents are also entitled to this leave and the maternity leave entitlement.  Depending on the jurisdiction and whether a pregnancy or maternity leave was also taken, parental leave can be between 34 and 63 weeks.

Acumen International can help you fast-track your possibilities of entering and expanding your business in Canada by providing Employer of Record services. Our unique global PEO and EOR solutions will enable you to jumpstart your global operations immediately, cost-effectively, and competently.

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