When hiring employees in Canada, employers must consider employment laws that protect Canadians and ensure fair employment practices. These laws cover a range of areas such as hiring, compensation, benefits, and termination. Here are some key considerations regarding employment law when hiring employees in Canada:
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Employers must provide written employment contracts to their employees that outline the terms and conditions of their employment, including job duties, compensation, benefits, and termination clauses. These contracts must comply with relevant laws and regulations.
In the province of Quebec, contracts and related employment documents must also be available in French, in addition to English.
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Most employees in Canada are either governed by federal laws or provincial laws, depending on the industry in which they work.
Each Province or Territory in Canada will regulate their own minimum employment standards, and this is known as Employment Standards Act.
These can include entitlements, minimum wage, holiday pay, vacation pay, parental leave, sick leave, severance, and termination pay.
Most employees work outside the limited industries that fall under federal law, so these employees and their employers are governed by the province's Employment Standards Act. The remaining employees and employers must adhere to federal standards and regulations. Here is a list of federally regulated industries.
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The federal minimum wage in Canada is $16.65.
An employee should be paid at least the federal minimum wage. If the minimum wage of the province or territory where the employee usually works is higher than the federal minimum wage, the employer is to pay the higher minimum wage.
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Employees in Canada who work more than a certain number of hours per week or per day are entitled to overtime pay. Employers must ensure that they comply with the overtime pay requirements set by the provincial or territorial government.
Each Province or Territory sets its own rules on overtime. Most Provinces and the federal government consider 40 hours to be a standard work week but Ontario, New Brunswick, and Alberta mandate overtime at over 44 hours in a week; Nova Scotia and Prince Edward Island mandate overtime at over 48 hours per week.
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Employees in Canada are entitled to vacation pay from the 1st day of their employment and are entitled to vacation time after one year of employment.
On average, Canadians receive 10 paid vacation days. All provinces guarantee 2 weeks, except for the province of Saskatchewan which guarantees 3 weeks.
The level of vacation pay employees in Canada are entitled to increases based on the number of consecutive years of employment with the same company.
1 – 4 years of employment
In many provinces, and for federally regulated industries, an employee with four or fewer years of employment with the same employer is entitled to two weeks of vacation time after each of the first four years of employment. While the percentage varies, in most provinces, vacation pay is calculated as 4% of their yearly gross wages.
5+ years of employment
In many provinces, and for federally regulated industries, an employee who has completed five or more years of consecutive employment is entitled to three weeks of vacation time. While the percentage varies, in most provinces, these employees are entitled to receive 6% of their gross wages as vacation pay.
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There are several holidays every year at the national level - these holidays are observed everywhere in Canada. In addition to these days there are other stat holidays and civic holidays on the provincial and territorial and municipal levels.
See below for a breakdown of the statutory holidays in Canada and where they are observed.
Alberta
New Year's Day
Family Day
Heritage Day (optional)
Good Friday
Easter Monday (optional)
Victoria Day
Canada Day
August Civic Holiday
Labour Day
National Day for Truth and Reconciliation
Thanksgiving
Remembrance Day
Christmas Day
Boxing Day (optional)
British Columbia
New Year's Day
Family Day
Good Friday
Victoria Day
Canada Day
August Civic Holiday
Labour Day
National Day for Truth and Reconciliation
Thanksgiving
Remembrance Day
Christmas Day
Manitoba
New Year's Day
Louis Riel Day
Good Friday
Victoria Day
Canada Day
Labour Day
National Day for Truth and Reconciliation
Thanksgiving
Remembrance Day
Christmas Day
New Brunswick
New Year's Day
Family Day
Good Friday
Canada Day
August Civic Holiday
Labour Day
National Day for Truth and Reconciliation
Remembrance Day
Christmas Day
Newfoundland and Labrador
New Year's Day
St. Patrick's Day
Good Friday
St. George's Day
Discovery Day
Canada Day (Memorial Day in Newfoundland)
Labour Day
National Day for Truth and Reconciliation
Christmas Day
Northwest Territories
New Year's Day
Good Friday
Victoria Day
National Indigenous Peoples Day
Canada Day
August Civic Holiday
Labour Day
National Day for Truth and Reconciliation
Thanksgiving
Remembrance Day
Christmas Day
Nova Scotia
New Year's Day
Heritage Day
Good Friday
Canada Day
Labour Day
National Day for Truth and Reconciliation
Christmas Day
Nunavut
New Year's Day
Good Friday
Victoria Day
Canada Day
Nunavut Day
August Civic Holiday
Labour Day
National Day for Truth and Reconciliation
Thanksgiving
Remembrance Day
Christmas Day
Ontario
New Year's Day
Family Day
Good Friday
Victoria Day
Canada Day
August Civic Holiday
Labour Day
National Day for Truth and Reconciliation
Thanksgiving
Christmas Day
Boxing Day
Prince Edward Island
New Year's Day
Islander Day
Good Friday
Canada Day
Labour Day
National Day for Truth and Reconciliation
Remembrance Day
Christmas Day
Quebec
New Year's Day
Either Good Friday, or Easter Monday, at the discretion of the employer.
National Patriots Day
St. Jean Baptiste Day
Canada Day
Labour Day
National Day for Truth and Reconciliation
Thanksgiving
Christmas Day
Saskatchewan
New Year's Day
Family Day
Good Friday
Victoria Day
Canada Day
August Civic Holiday
Labour Day
National Day for Truth and Reconciliation
Thanksgiving
Remembrance Day
Christmas Day
Yukon
New Year's Day
Good Friday
Victoria Day
National Indigenous Peoples Day
Discovery Day
Canada Day
Labour Day
National Day for Truth and Reconciliation
Thanksgiving
Remembrance Day
Christmas Day
It is worth noting that federally regulated industries will observe some holidays that are traditionally observed across the whole nation.
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Unlike the US, there is no employment at-will in Canada. This means that upon termination workers are required to receive separation notice or Pay in Lieu.
In most provinces, if the employee signed an employment contract that contains an enforceable “termination without cause” provision, then the length of notice would be limited to the contractual entitlement.
If the employee did not sign an employment contract or the contract doesn’t contain an enforceable “termination without cause” provision, common law kicks in. Common law in Canada entitles the employee to a notice period longer than the minimum standard. The notice period depends on the employees:
Depending on the Province and length of service most workers will typically receive 1-2 weeks of notice as a requirement but this can be longer depending on how long they were engaged.
Ontario Example:
• Less than 3 months = none
• 3 months -1 year = 1 week
• 1 year – 3 years = 2 weeks
• 3 years – 4 years = 3 weeks
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Employment terminations in Canada for just cause are reserved for really egregious employee conduct such as theft and dishonesty. All other terminations in Ontario are considered to be without cause. In that case, the employer must either provide working notice of the pending termination to the employee or provide pay-in-lieu of the notice.
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Entitled sick time varies per province, by duration, and whether the leave is paid or unpaid.
For example, in Ontario, all provincially regulated employers must provide their staff (whether full-time or part-time) with three unpaid sick days in a calendar year whereas the legislation in British Columbia entitles employees to 5 days of paid sick time off each year, provided the employee has been employed for 90 consecutive days.
If an employment contract provides a greater right or benefit than the applicable provincial or federal sick leave standard, then the terms of the contract apply instead of the standard.
Employer of Record Canada: An Easy Solution to Payroll Employees in Canada
Navigating the provincial laws and employment regulations in Canada can be a lot to come to terms with when hiring your first employee in Canada. Using a specialized Canadian Employer of Record like PGC to onboard, payroll, and provide benefits to your employees on your behalf can help avoid serious repercussions for your business.
Schedule a call with one of our expansion experts who can best advise you on how to get started with hiring employees 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.