Employing Workers in Canada: HR differences you need to know

When it comes to employing workers in Canada you have to be aware of the key employment law differences in comparison to the UK and the U.S. Canada is an attractive business location due to the business growth incentives it presents, so if you want to succeed and operate compliantly in Canada check our these key HR Canadian practices which can differ greatly from province to province before expanding. 

What are the differences/challenges when employing workers in Canada?

1. Overtime Exemptions

Canadian overtime exemptions are generally much narrower than in the U.S. Canadian employees tend to have the upper-hand when it comes to employment and overtime which is monitored very carefully.

In the majority of provinces in Canada, the overtime rate is 1.5 times the employee’s standard compensation. This is usually paid after an employee works more than eight hours per day or 40 hours per week. You also have to be aware of exceptions that can be based on location, position, and payment structure.

2. Termination of Employment

In Canada, employment is not 'at-will' like it is in the U.S. Instead Canadian employers must provide notice before actioning terminations. The required termination notice in Canada or pay formulas varies between provinces. 

Most provinces in Canada apply approximately one week per year of service to a maximum of eight weeks in the case of only a single employee. Larger lay-offs trigger significantly higher notice requirements.

3. Minimum Wage

There is no national minimum wage in Canada, it depends on the province you operate in. Labor costs in Canada are increasing due to recent minimum wage legislation. For example, in Ontario, the minimum pay rate was recently increased to $14 per hour. 

It is important to do your research before hiring workers in Canada to work out your labor costs.  Check out the minimum wage per province in Canada here. 

4. Paid Leave

In the United States, employees depend on their employers to provide substantial paid time off. In Canada, employees look to the government for assistance. Canadian workers expect a more generous leave allowance which is important to keep in mind when employing workers in Canada. 

What leave are parents entitled to in Canada?

The government offers paid leave for parents via Canada's employment insurance plan. This enables mothers to take up to 15 weeks of paid maternity leave. In the U.S., paid maternity leave does not exist. Mothers are entitled to 12 weeks of parental leave, however, they will not be paid to taking this time off.

What vacation leave are Canadian workers entitled to?

Workers in Canada are entitled to two weeks of paid vacation leave, which is usually the norm for most businesses. However, provinces that host a lot of big businesses can demand an additional week or two for longer-serving employees as an incentive. The US, on the other hand, does not have to offer paid vacation to their workers and it is at the employers discretion whether this is offered or not. 

Not all public holidays are mandatory in Canada and the US, for many it is up to the discretion of the employer.

5. Leave of Absence

When employing workers in Canada, there are generally two types of leaves of absence which are particularly surprising to US employers. Personal Emergency Leave requires an employer to provide each employee with 10 days off from work due to a personal emergency or an emergency of a close family member. The first two days must be fully paid by the employer.

For example, Ontario’s Employment Standards Act includes a list of 12 different types of leaves of absence that employees are entitled to, at a minimum. The list includes Family Caregiver Leave, Critical Illness Leave, and Domestic or Sexual Violence Leave. You must be aware of these employment acts before operating in Canada and undertake research.

Seek Help from a Canadian Employment Expert Before Expanding

Canada's HR practices can be difficult to navigate if you are attempting to employ workers in Canada. We suggest that you seek professional help from Canadian employment experts before entering the market to ensure you remain compliant.

We have been experts in the Canadian employment industry for over 20 years. Often, we are the first point of contact most staffing companies make when seeking assistance with hiring their contractors in Canada.

Using an employer of record like PGC will assure your business is compliant with all current and upcoming compliance issues in Canada.

Disclaimer: The information provided here does not, and is not intended to, constitute legal advice. Instead, the information and content available are for general informational purposes only.