When hiring, negotiating, and doing business in Canada, it’s essential to stay up-to-date and compliant with all of Canada’s compensation and benefits laws. The country has strict employment laws, and it is best practice for employers to provide additional benefits.
Canada Compensation Laws
Canada’s compensation laws vary by province. Most provinces have a fixed overtime rate of one and a half times your employee’s regular pay. Since every province has different maximum work hours, overtime can begin at 40 or up to 44 hours of work. Employers are not allowed to refuse overtime rates, and they cannot force employees to work past their scheduled hours.
According to Canada payroll regulations, employers must pay their employees weekly, bi-weekly, semi-monthly, monthly, or annually. Every province sets its own minimum wage, which can change frequently. For example, Quebec increased its minimum wage by 40 cents per hour to 13.50CAD in May 2021. Employees in federally regulated industries like air transportation and telecommunications are subject to the federal minimum wage rather than the provincial rates. The federal minimum wage is planned to increase to 15.00CAD on December 29, 2021.
What Benefits Are Guaranteed in Canada?
All Canadian employees have access to health care benefits through the country’s social security system. Every resident also has a Medicare card for free healthcare and childcare benefits in their particular province. It is common for companies to also offer a Group Benefits Plan in addition to the free coverage.
Pregnant employees are entitled to up to 17 weeks of maternity leave if they have worked for six consecutive months and give the employer a certificate from a qualified medical practitioner confirming the pregnancy.
All employees get paid time off for four federal public holidays and other provincial public holidays. These public holidays include:
- New Year’s Day
- Canada Day
- Labour Day
- Christmas Day
Canada Benefit Management
Performing Canada benefit management duties from abroad can prove difficult. Labor, benefits, and Canada compensation laws are complex, and you may find that you have to travel to Canada frequently or hire a lawyer who understands every federal and provincial regulation.
As a rule, you are responsible for worker’s compensation and are liable for employee health and safety if you pay your Canadian employees directly. You also need to source any additional health benefits, which you can only do if you have a head office in Canada or a signatory in the country.
Benefit and Compensation Restrictions
Canada compensation laws have restrictions on both benefits and compensation. Many of those restrictions pertain to a particular province and are not standard across the entire country. Before you establish a subsidiary in Canada, read up on each province’s requirements concerning benefits and compensation.
You can also choose to work with Globalization Partners to take some of the stress out of understanding Canada employment compliance. We do everything from hiring employees on your behalf to acting as the Employer of the Record to hold ourselves liable for whatever your company does. Contact us to learn more about our services today.