With a mixture of emerging and booming economies, political uncertainty and extreme contrasts in business customs, the Americas can never be categorized as one homogeneous whole.
Here we take a look at how HR & Payroll works in Canada.
Social Security System
- Every employee in Canada is required to obtain a Social Insurance Number (SIN). Social security comprises:
- Medical Benefits: The employer and employee contribution varies from province to province. In Alberta, Saskatchewan, New Brunswick, Nova Scotia, Prince Edward Island, Northwest Territories, Nunavut and Yukon provinces, the medical benefits are fully-sponsored by the government.
- Employment Insurance: The employer’s and employees’ contribution is 2.63% and 1.88% of insurable earnings, respectively. For Quebec contribution is 2.16% and 1.54%, respectively.
- Retirement Benefits: Both employers and employees contribute 4.95% of the employee’s compensation under the Canada Pension Plans and 5.175% in case of Quebec Pension Plans.
- Employment agreements need not be in writing, an employer can enter into an oral contract when hiring an employee
- An employee relationship can be terminated by occurrence of any of the following event:
- Resignation of the employee
- Termination for a just cause
- Termination without cause in case of misconduct by an employee, any act of dishonesty or, breach of confidentiality
- If an employee is terminated without cause, he/she is entitled to a notice of termination or pay in lieu of notice. The statutory minimum period of notice ranges from one to eight weeks.
- The Immigration and Refugee Protection Act (IRPA) regulates the hiring of foreign workers in Canada.
- Before hiring a foreign worker, it must be ensured that no Canadian or permanent resident is available for the job.
- To hire a foreign national, an employer must comply with all the recruiting requirements of Service Canada.
- The employer must obtain Labor Market Opinion (LMO) from Service Canada (before applying for a work permit) if there is no work permit category applicable under an international agreement (such as NAFTA) or under any government program.
- Authorization to work or invest in Canada can be granted to foreign nationals under the following categories:
- Federal skilled workers – for people with skilled professional work experience
- Canadian Experience Class – for people with in-Canada professional work experience
- Federal Skilled Trades Program – for people with experience in skilled manual work
- Provincial nominees – for people who want to go to a specific province
- Start-up visa – for people who have a business idea and someone to fund it.
- Self-employed people in agriculture, sports or the arts
- Live in caregivers
- There are certain work permit categories, which are exempt from Labor Market Impact Assessments (LMIA)
- Intra-company Transferees
- NAFTA Professional Category
- Other Free Trade Agreements with Entry Provisions
- Payroll cycles vary from province to province. For example, in British Columbia wages must be paid at-least semi-monthly and within eight days after the end of the pay period, while in Quebec wages has to be paid at intervals of not over 16 days
- The minimum wage rate varies across provinces from $10.455 to $13.00 per hour.
- As per Canada Labor Code overtime wages must be paid at a rate of at-least one and one-half times the regular rate of pay.
- Employees are entitled for at-least two weeks of paid vacation for each completed year of employment and three weeks annually, after six consecutive years of employment.
- Canada Labor Code regulates employment in Canada. Main aspects covered under the law include:
- Industrial relations (including certification of unions, collective bargaining, etc.)
- Workplace health and safety
- Employment standards (including vacations, working hours, minimum wage, etc.)
- Other key regulations that govern employment in Canada include: Employment Equity Act, Canadian Centre for Occupational Health and Safety Act, among others.