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Things to know

  • In Canada, employees are hired through verbal or written agreements.
  • “At-will” employment does not exist in Canada - unless an employer has “just cause,” it cannot terminate an employee’s employment without notice (or pay in lieu of notice).
  • Employees terminated without cause are guaranteed certain minimum statutory entitlements and may also claim common law or contractual termination compensation.
  • Arrangements with independent contractors need to be carefully structured to avoid creating an employment relationship.
  • Both the federal and provincial levels of government have jurisdiction over employment and labour matters for certain types of employers – the level of government that has jurisdiction is determined by the industry in which an employer operates.
  • Conditions of employment, such as hours of work, overtime pay, minimum wages, holidays, vacations, employee benefit plans, leaves of absence, notice of termination of employment, and severance and termination pay, vary from jurisdiction-to-jurisdiction and are governed, in most cases, by statute.
  • It's important to have a system for identifying the requirements of the positions you want to fill, as well as policies (a) that may be required by applicable law, including occupational health and safety; and (b) specifically for recruitment and selection that are inclusive and fair, with an aim to hiring the most qualified people, and achieving equality in your workplace, including anti-discrimination, harassment and violence.

Things to do

Written Agreements

  • Review offer letters and employment agreements to ensure compliance with Canadian law (both provincial and applicable federal law) and to confirm all terms and conditions of employment are addressed.

Remittances

  • Employers in Canada must make certain deductions at source off of an employee’s compensation, including income tax, Canada Pension Plan and Employment Insurance.  Once that is completed, employers must contribute certain amounts in respect of Canada Pension Plan and Employment Insurance and then remit these amounts to the Canada Revenue Agency.

Localizing your current policies

  • Canadian law requires an employer to have in place employee-related policies.  These requirements vary from province to province but most include policies in respect of occupational health and safety, human rights, anti-discrimination and harassment, and others.  In addition, employers often have policies in respect of overtime, hours of work, attendance, social media and computer use, etc.  These policies need to be developed or localized to ensure compliance with the applicable provincial laws.

Workers compensation

  • Workers compensation in Canada, for most employers, is not private insurance.  Instead, it is governed by provincial governments under statute.  Under such statutes, an employer is placed into a rate group and must contribute the applicable rate for the employer’s industry for each $100 of payroll.  Employers need to determine whether registration is required and, if so, what rate group they are in.

Occupational Health and Safety

  • Employers have a legal obligation to maintain the health and safety of the workplace.  Policies, training and health and safety practices are necessary to fulfil this obligation under provincial legislation.
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