By Kathryn Benson, MIRHR
While opening an office in Canada is a sound way to expand into new markets, companies unfamiliar with the differences between the Canadian and American employment landscape can face many challenges. To ensure the transition into Canada is successful, it is vital that a company understand the legislative differences between Canada and the U.S., and the consequences of overlooking those differences.
There are two major differences when it comes to American and Canadian employment environments: cultural and legislative. The history of social welfare in Canada has led to higher labor standards in areas such as employment insurance, collective bargaining, workers' compensation, leaves and terminations. For example, it pays to be aware that in Canada most employees are entitled to up to 52 weeks protected maternity/parental leave (up to 70 weeks in Quebec), and "at-will employment" does not exist. Companies who fail to adhere to Canada's employment laws can find themselves in time consuming and costly litigation.
For example, employees in Canada have access to publicly funded legal resources, ample time to file a complaint, and can win generous settlements through the Human Rights Tribunal. Employees can also file complaints against an employer through Employment Standards Tribunals, again at no financial cost to the employee but at a significant burden to the employer.
The good news is that there are many resources available to assist new companies in Canada to navigate the employment law minefield. Companies can get information from government bodies, and can hire an employment lawyer or a Human Resource Manager well versed in Canadian legislation. However, for companies who lack the time and funding, or prefer more flexibility, another solution is to use a total Human Resource Outsourcing Provider. This is distinct from a Functional Human Resource Outsourcer that specializes primarily in one area of HR, such as job placement or payroll.
A total Human Resource Outsourcing Provider is the solution for a company needing Canadian expertise in all areas of Human Resources and employment. Such a company will build and implement a Human Resource infrastructure that is not only in compliance with Canadian legislation, but fits with the needs and culture of a U.S. company in Canada.
Another valuable option for new companies in Canada is a total HR Outsourcing Provider that can offer Third Party Employment services, becoming the employer of record for some or all employees if a company lacks the infrastructure to be an employer themselves. This employment can be short term or long term based on the company's needs. As the employer, the Third Party Employer should ensure all employment laws are adhered to and should handle employee payroll, tax remittance, workers' compensation, registration, separation paperwork, performance management and conflict resolution, while keeping day-to-day management of the employee in the client company's hands.
In short, the worker is employed by the Third Party Employer, but takes operational and performance direction from the new company to Canada.
Navigating the Canadian employment law landscape is certainly possible with education and aligning yourself with the right partners.
Here are 5 reasons for using a Third Party Employment solution:
- Compliance - using a Third Party Employer ensures full compliance with Provincial and Federal regulations
- Liability - Third Party Employer assumes full liability avoiding common errors like worker misclassification
- Payroll - Third Party Employer processes all payroll, benefits and remits all taxes
- Human Resources - Third Party Employer will act as the HR resource for the worker and client
- Cost control - one provider for all aspects of the employment process ensures the best value for your bottom line
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