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...
Read MoreWhen 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.
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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’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.
Managers and supervisors may be exempt from overtime pay requirements. Managers and supervisors are typically employees that have work duties that are managerial or supervisory in character and exercise discretion and independent management of the affairs of the company and the ability to impact the employment of others (such as hiring or firing of employees, disciplining employees, and scheduling employees).
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. Effective April 1, 2022, the federal minimum wage has been adjusted to $15.55 per hour.
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. After the maternity leave, they can leverage parental benefits as well depending on the province of employment.
All employees get paid time off for four federal public holidays and other provincial public holidays. These public holidays include:
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.
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.
When you take your company to a new country, benefits planning will play a role in your expansion process. As you develop your Canada employee benefits plan, you’ll need to consider compliance and what provisions can make you competitive in the labor market.
Creating a competitive benefits package will be one of your first steps as you build a team abroad. You’ll need to consider the legal requirements set by Canadian labor laws and the expected provisions in the market at large. Providing the minimum benefits in the labor regulations will keep you compliant, and considering market expectations will help you attract and retain workers.
Every employer must provide a few required benefits, but most businesses also offer a range of supplemental provisions. These additional benefits will look different depending on the size of your company, your available resources, and what employees expect in your field. Possible extra benefits include:
Canadian labor laws detail a few provisions that employers must extend to their workers. These requirements include:
Statutory holidays and paid annual leave regulations will vary depending on the province where your company is based. Make sure you understand the rules relevant to your area to remain compliant. It’s also valuable to note that many companies will provide more than the minimum leave requirements.
Designing an employee benefits program requires careful planning. As an employer, you have to balance employees’ needs with your company’s resources to retain workers and stay in business. With three steps, you can find the appropriate benefits plan for your international company.
Your employees will receive benefits paid for by company earnings, so you need to evaluate your company resources. During this initial phase, you should take time to consider what your business goals are.
For example, you might want to stand out as an employer in a specific region or industry. Are you interested in increasing recruiting efforts, or do you want to focus on employee retention? Establishing these goals and understanding what you can afford will set the tone for your benefits planning.
While you want to remain within your company’s abilities, your benefits plan will not be meaningful if it doesn’t address employees’ needs. This phase can include surveying workers in your area or researching other company benefits packages to see what employees want and need.
The standard for supplementary benefits will change based on your area and industry. For instance, a transportation stipend might be more common in an urban region with a bus or train system. Think about your employees’ lifestyles and what benefits would suit them best.
Once you’ve determined what your business can afford and what your team needs, you can develop your employee benefits plan. As you work through this development phase, establish the required benefits first and decide upon supplemental benefits from there.
Benefits expenses will vary depending on the size of a business, its priorities, and how many supplemental provisions it offers. All companies need to take the time to evaluate their benefits plans based on their financial capabilities.
For most provinces in Canada, the national statutory pension plan requires an employer contribution of 5.45 percent as of 2021. For employment insurance, employers have to contribute 1.4 times the amount of worker premiums.
Regarding paid annual and holiday leave, employees should receive the amount of pay they would receive for a standard day of work. This pay may be an hourly calculation or a portion of a salary.
A benefit is taxable if an employee is the primary beneficiary and receives an economic advantage because of it. Many benefits will fall under this category, like a transportation allowance or holiday bonus. Nontaxable benefits would typically fall under allowable expenses submitted with receipts, such as cellphone or tuition reimbursement.
Canada has a universal healthcare system, which allows eligible residents to apply for public health insurance and get most care for free. However, public health insurance doesn’t cover every expense. The national healthcare system does not cover drug costs, prescription glasses, or dental care. Hence, many employers opt to offer a supplemental group insurance plan.
Similarly, outside of the required statutory pension contributions, many employers choose to offer a supplemental pension plan with additional contributions to help boost their employees’ retirement savings. While these plans are not required, they can make open positions more competitive in the market
Globalization Partners offers extensive international resources to help you build competitive and compliant benefits packages. Get in touch with us today to learn more.
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