Employer of Record (EOR) in Canada

Ontario
Figure One

Hiring in Canada and Contracts of Employment

Canada is a bi-lingual country, so a basic consideration when hiring the local workforce is your requirement for an understanding of English and/or French, and how this resonates with your labor pool. In the French-speaking province of Quebec, employment contracts are often written in French.

Work Permit

Canada Work Permit is supposed to be given to well-qualified candidates for a fixed period of time. Candidates must apply for the Work Visa only after getting a job offer or confirmation of a work contract.

Minimum Wage

In Canada, minimum wages generally follow the rates established by the provinces. Although there is a federal minimum wage ($15.55), it only applies to people employed in sectors subject to federal regulation. They include banks, postal services, interprovincial transportation, and federal Crown enterprises.

Termination and Severance Terms

Probation periods are usually included in employment contracts and can be no longer than six months (although most employers use three months). Notice pay is often mandated if an employee is terminated in their probation period.

Notice Period

Employees who have worked for the same employer continuously for at least one month but fewer than two years are entitled to at least one week of notice from the employer. Employees who have worked for the same employer continuously for two years or longer are entitled to one week of notice for each full year, up to a maximum of 12 weeks’ notice.

Working Hours and Overtime

Controls over working hours vary depending on which province you are operating in, as well as the job and industry. Provinces also set standards regarding overtime and when this is paid, usually at a rate of between 1x and 1.5x basic pay. Overtime is eligible to be paid from forty hours onwards, depending on the province. This is a mandatory entitlement and at the same time, excessive hours are also banned.

Public Holidays and Vacation Allowances

  • New Year — January 1
  • Good Friday — movable
  • Easter Monday — movable
  • Victoria Day — May 23
  • Saint-Jean-Baptiste Day — June 24 (Quebec only)
  • Canada Day — July 1
  • Civic Holiday — August 1
  • Labor Day — September 5
  • National Day for Truth and Reconciliation — September 30
  • Thanksgiving Day — October 10
  • Remembrance Day — November 11
  • Christmas Day — December 25.
  • Boxing Day — December 26 (Contact centers closed December 27)

Sick Leave and Health Insurance

In Canada, sick days are typically unpaid; however, in some circumstances, employees may be eligible for benefits through the Canada Pension Plan or Employment Insurance. Nevertheless, an employee is entitled to 12 weeks of protected leave in case of a serious illness or injury.

Payroll and Taxes

The Canada Pension Plan contribution for the last year was marked at 5.45%.

Conclusion

Given the attraction in setting up a business in Canada, understanding federal and provincial employment laws is essential. An Employer of Record, or a partner PEO company, is a great way to outsource this specific expertise in 100+ countries, while allowing you the time and space to focus on your organization.

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