Hire in Canada
Here’s where you get started with human resources best practices and hiring in Canada.
Canadian Currency
Canadian Dollar (CAD)
The Capital of Canada
Ottawa
Time Zone in Canada
GMT-6
Important Facts About the Country of Canada
Introduction to Canada
Canada is the second largest country in the world by area. It is a parliamentary democracy, a constitutional monarchy and also a realm within the Commonwealth of Nations. The country’s capital city is Ottawa, although the largest metropolitan areas are Toronto, Montreal and Vancouver. With a total population of just over 41 million people, Canada ranks amongst the world’s leaders in measurements such as civil liberties, government transparency and quality of life.
What to Know about Canada's Geography
Canada covers a vast area, spanning nearly 10 million square kilometers in the northern part of North America. Itt borders the United States of America to the south. Otherwise surrounded by ocean: the Pacific to the west, the Arctic in the North and the Atlantic to the East.
Climate in Canada
As Canada is such a large country, the climate varies considerably from region to region. Winters can be very harsh, particularly in the North and in the interior. Snow cover is not uncommon for six months of the year. Conversely, summer temperatures can be quite high. Both the east coast and the west coast of Canada are usually more temperate.
The Culture of Canada
The constitution of Canada promotes a just, equal and multicultural society. Indeed, Canada has one of the highest per capita immigration rates in the world. The culture reflects significant historical influences from the United Kingdom and France. Humor is an integral part of the Canadian identity, particularly satire and parody.
Religions Observed in Canada
Canada has no official church and is religiously diverse. The constitution protects individual freedom of religion. Around 65% of Canadians identify as Christian of one denomination or another. Around 25% declare no religious affiliation. Islam is the largest non-Christian religion and is also the fastest growing.
Languages Spoken in Canada
English and French are the official languages of Canada and have equal status in parliament and federal institutions. Other widely spoken languages in the country are Chinese (the mother tongue to over one million inhabitants), Punjabi, Spanish and several indigenous language groups.
Canadian Human Resources at a Glance
Employment Law Protections in Canada
In Canada, the power of legislation, in general, is shared between the federal and provincial governments. Employment law matters generally fall under the jurisdiction of the provinces. However, given that it is also legislated by common law, laws from province to province are generally quite similar. Quebec is the notable exception, as it operates on a civil law based on the French Napoleonic code. Additionally, in Quebec, language laws require all written communications to employees, including offers and contracts of employment, to be prepared in French. This obligation is waived only if the employee consents to receiving the documentation in English.
Only a few distinct industries considered to be of national or international character are legislated directly by federal law. They include shipping, air transport, banking and telecommunications, among others.
As a result, most employers that operate in multiple Canadian provinces are required to comply with a range of legislation within each of these provinces.
Employment Contracts in Canada
Canadian law does not require a written contract but it is nonetheless recommended. An employment contract should set out the terms and conditions of the employment relationship. If the contract is either unwritten, or only partially written, many terms may be implied by common law.
In order to be enforceable, an employment contract must fulfill the essential elements of a binding contract at common law, including offer, acceptance and consideration. The contract must also not contravene any applicable legislation.
In most employment contracts, the consideration is the exchange of remuneration for work. Employment contracts are subject to scrutiny and will not be enforceable if they do not comply with minimum employment provisions, occupational health and safety standards and human rights legislation. Ambiguity in an employment contract will generally be interpreted in the employee’s favor.
Fixed-term contracts
Most employment agreements are for an indefinite term. When an employment agreement is for a fixed term, the employee may not be entitled to notice of termination if his or her employment is terminated when the contractual term expires. However, law courts are likely to find the employment contract was, in substance, one of indefinite duration if an employee continues to be employed once the contractual term has expired. The same rule of thumb applies if the employee continues to be employed by the same employer under consecutive fixed-term employment contracts, Employment standards legislation may also establish the maximum time frame a fixed-term employment contract can operate as such.
Canada's Contract Terms
Employment contracts in Canada can be indefinite, fixed-term, full-time, part-time or casual.
Employers can generally provide for differential treatment between these categories of employees However, basic employment standards apply to all categories in each Canadian jurisdiction. These employment standards set minimum legislative standards regarding matters such as minimum wages, hours of work, overtime pay, vacations, holidays and leaves of absence. Employees and employers may not waive or contract out of these rights, unless to provide more favorable conditions to employees.
Background Checks
Even when an individual has consented to a background check, the handling of personal information must be reasonable under the circumstances given the purpose for which it is being collected, used or disclosed. Employers must therefore have some justification for requesting employees to consent to a background check, criminal or otherwise.
British Columbia and Quebec require any criminal background check, and any decision relating thereto, to be directly relevant to the particular staff position at issue. At the other end of the spectrum, Alberta currently maintains no restriction against criminal background checks at all. Other provinces in Canada are positioned somewhere between these two extremes.
Employers generally should not conduct record checks until a conditional offer of employment has been made. Then it should be conducted only with employee’s consent and, often, participation).
Canada's Guidelines Regarding Probation Period/Trial Period
If an employer wishes to hire an employee on a probationary basis to determine their suitability for the position, this should be clearly set out in a written employment contract.
In most jurisdictions, a probationary period of up to three months is permitted. During the probationary period, an employer, in most provinces, can terminate an employee without being required to provide statutory notice of termination or payment in lieu.
The minimum notice period requirements for termination apply once a person has been employed for three months. Any agreement for a probationary period exceeding three months should clearly state the employee will be provided with statutory entitlements upon termination.
Regulations and Rules Regarding Working Hours in Canada
Most provinces have legislation that governs the maximum hours that employees may work. Such legislation sets parameters for the maximum daily and weekly figures. This is typically eight hours per day and 40 hours per week.
In certain situations, these maximum hours of work may be exceeded, such as where overtime is paid, where the employee agrees or where there is an emergency situation. In some provinces, specific provisions also permit employers to implement “compressed” four-day work weeks or “continental shifts” with 12-hour work-days. The requirement for such must be justified. Additionally, some professions (e.g. doctors) and certain roles (e.g. managers and supervisors) may be exempt from such minimum standards and overtime rules.
Canadian Laws Regarding Overtime
Overtime rules vary by province with some jurisdictions maintaining daily overtime thresholds (often eight hours) and others having weekly overtime thresholds (often 40 to 44 hours per week).
Overtime is generally payable at 1.5 times the regular rate. In some jurisdictions, the rate is two times the regular rate once a particular threshold is passed.
Both salaried and hourly employees enjoy overtime entitlements in Canada. However, most jurisdictions specifically exclude certain employees from this entitlement. Exemptions include managers, supervisors and certain categories of professionals.
Timesheets
Records are required which show the daily hours worked, unless the employee is excluded as discussed above. If hours of work are averaged, records must include the posting of the 30-day notice, as well as identify the periods of averaging; start date of averaging; details of the reductions in hours; and the number of overtime hours paid if applicable.
Health and Safety in the Workplace
Most provinces require a written health and safety policy with certain details. This requirement is based on the number of employees or the scope of the employer’s operations. Specific training for employees on health and safety standards may also be a requirement.
Each jurisdiction has implemented its own health and safety legislation. Generally, they all have broad and sweeping powers to investigate and ensure safe workplaces.
Rules Regarding Bonus and 13th Month Pay in Canada
Bonuses are not required in Canada. However, many employers will choose to offer bonuses as an incentive both to attract and retain employees.
For the employer, it is critical that the wording of any bonus policy is very clear. Clarity is key in limiting liability for the compulsory payment of bonus, particularly upon termination. Employers should focus on employing explicit language and clear examples in defining the bonus criteria, the payment dates and the entitlement. The policy should also clearly account for what happens in the event of resignation, retirement or termination of any kind. Simply calling a bonus “discretionary” in the employment contract will not necessarily protect an employer from claims by terminated employees seeking bonus amounts.
Termination
Grounds
Termination for cause without notice or pay in lieu is permissible in Canada. It is very difficult to establish just cause for dismissal, with the standard being very high. However, in general, an employee can be dismissed without notice if he or she engages in conduct incompatible with the fundamental terms of the employment contract. This includes gross and willful misconduct, willful neglect of duty, fraud, theft, or repeated insubordination.
Termination without cause is permissible in most jurisdictions. However, the proper notice of termination or payment in lieu must be provided.
Employees entitled to termination protection
Generally, employees in Canada cannot be terminated by employers without just cause, without proper notice or without payment in lieu and severance pay (if applicable). This is established under statute and at common and civil law. The right to reinstatement, however, is generally limited to unionized employees, employees terminated contrary to human rights legislation, employees terminated for exercising a statutory right with respect to working conditions or legislated employment standards. The latter includes the right to a pregnancy leave.
Federally regulated employers may not terminate a non-managerial employee with at least one year of service without sufficient reason. Generally, this includes just cause or a discontinuance of the job function. Employers are federally regulated if they operate within industries that fall under the federal government’s constitutional jurisdiction and concern matters of national interest.
Additional protections exist in Quebec and Nova Scotia for certain employees who have acquired tenure by achieving a certain length of service. In those circumstances, termination may not be possible except for bonafide reasons such as position elimination or lack of work.
Notice tendered by Employer
The statutorily required minimum length of notice of termination varies by province. For individual terminations, this requirement is typically based on an employee’s length of service. For individual terminations, most jurisdictions limit the notice of termination to eight weeks. Sometimes a written employment contract that is otherwise enforceable will maintain the employee will receive only the minimum entitlements under the applicable statute. This may be sufficient to rebut the legal principle that the employee is entitled to reasonable notice by common law.
However, the statutory entitlement only sets out an employee’s minimum entitlements upon dismissal. Unless the parties have expressly agreed otherwise, there is a legal presumption that an employee will also be entitled to a reasonable notice period under common law. Such a period may be significantly longer depending on circumstances. Factors considered by an adjudicator in determining the appropriate notice period include the character of employment, the employee’s length of service, the age of the employee and the availability of other employment. The length of the notice period that may be awarded by a court generally ranges from two or three months up to 24 months.
In Quebec, similar entitlements exist. These generally cannot be limited by contract at the commencement of the employment relationship.
Notice tendered by Employee
Employees are obliged, under common law, to provide a “reasonable amount” of notice. Again, the calculation of this reasonable amount will depend on specific circumstances. Alternatively, parties can displace the common law requirement by including in the employment contract, at the time of hire, a specific amount of notice an employee must offer when he or she resigns.
Payment in Lieu
Pay in lieu of notice is permitted. “Garden leave” is becoming more common. With appropriate care and planning, an employer can often achieve this objective for a reasonable period.
Redundancy/Severance Pay in Canada
Ontario is the only Canadian jurisdiction that provides employees with severance pay. This is distinct from payment for notice of termination. Eligible employees in Ontario and employees under the federal jurisdiction are eligible for severance pay. In Ontario, eligible employees are those with five or more years of service. They will receive one week for each year of service. Partial years are pro-rated to a maximum of 26 weeks. In the federal jurisdiction, eligible employees receive the greater of two days’ wages per year of service or five days’ wages.
Post-Termination Restraints / Restrictive Covenants
Non-compete clause
Non-compete clauses will typically not be enforceable for regular employees and particularly not where a non-solicitation provision would have been sufficient to protect the employer. In Ontario, employers are prohibited from entering into employment contracts or other agreements with an employee that include a non-compete agreement. In other provinces, any such clause must be reasonable in scope geographically and temporally, and in some jurisdictions, must also specify the type of restricted employment and the restricted job functions. The language should be clear and unambiguous. A requirement not to interfere with business relationships might also be more likely to be enforced if it is reasonable, clear and unambiguous.
Customer non-solicit clause
A customer non-solicit clause is more likely to be enforced than most non-competition agreements. Non-solicitation agreements must still be reasonable in scope, both geographically and temporally. The language must be clear and unambiguous.
Employee non-solicits
Again, these are likely to be enforced if reasonable, clear and unambiguous.
Trade Unions / Collective Agreements in Canada
In Canada, the level of union participation is low and declining in the private sector. Unions continue to have high levels of representation in the public sector, especially in certain traditionally unionized industries such as automotive, construction and transportation. There are no unions or other worker representation for many businesses. There are also no works councils. Industry-level collective bargaining agreements (CBAs) are rare, with certain industries in Quebec being a notable exception.
Tax and Social Security Information for Employers in Canada
Personal Income Tax in Canada
Income tax is levied at two different levels: federal and provincial. Provincial tax is computed in much the same way as federal tax, applying the applicable province’s tax brackets, rates, and credits to taxable income.
The Canada Revenue Agency (CRA) administers both federal and provincial taxes, except in Quebec. Taxpayers calculate their federal and provincial taxes on one return. In Quebec, taxpayers are required to file a federal return as well as a separate Quebec tax return.
Residents
All individual residents in Canada are subject to Canadian income tax on their worldwide income, regardless of where it is earned or where it is received. However, they may be eligible for a credit or deduction for foreign taxes paid on income derived from foreign sources.
Non-residents
Non-resident individuals are subject to Canadian income taxes at the same rates applicable to residents on the following types of Canadian-earned income:
- employment income
- business income
- gains from the disposition of “Taxable Canadian Property.”
Below are the federal rates for 2024:
| From CAD | To CAD | Tax Rate % |
|---|---|---|
| 0 | 55,867 | 15.0 |
| 55,867 | 111,733 | 20.5 |
| 111,733 | 173,205 | 26.0 |
| 173,205 | 246,752 | 29.0 |
| 246,752 | and over | 33.0 |
Social Security in Canada
Canada has a highly developed and extensive social security system, providing benefits such as disability, death, family allowances, medical care, old age, sickness and unemployment. The Social Security system is funded by wage and salary deductions as well as employer contributions. It is the employer’s responsibility to collect both employer and employee contributions.
In some provinces, there is an Employer Health Tax (EHT) contribution, and this rate varies.
In addition, Quebec mandates a Parental Insurance Plan.
| Type of Social insurance | Paid by employer | Paid by employee | Total | Maximum Contributions (per annum) |
|---|---|---|---|---|
| Canada Pension Plan | 5.95% | 5.95% | 11.90% | Employee CAD 3,867.50 Employer CAD 3,867.50 |
| Employment Insurance | 2.30% | 1.64% | 3.94% | Employee CAD 1,077.48 Employer CAD 1,508.47 |
| Total | 8.25% | 7.59% | 15.84% |
Starting in 2024, a higher, second earnings ceiling of CAD 73,200 will be implemented and used to determine second additional CPP contributions (CPP2). As a result, pensionable earnings between CAD 68,500 and CAD 73,200 are subject to CPP2 contributions. Employee and employer CPP2 contribution rates for 2024 are 4%, and the maximum contribution will be CAD 188.00 each.
*The above table serves as a broad guideline. Actual rates charged by GoGlobal will differ.
Important Information for Canadian Employees
Salary Payment
In Quebec, wages must be paid to workers at intervals no longer than 16 days, as per the law. Similarly, in most provinces, the law mandates regular payment intervals, typically weekly, bi-weekly, semi-monthly, or monthly.
Payslip
A statement of wages (often known as a pay stub) must be issued on or before the day of the related salary payment. The pay stub must include:
- the employees’ rate of pay
- the pay period
- wages for that period before and after any deductions (must detail how that was calculated)
- the amount and reason for any deductions
Annual Leave
- Employment standards legislation provides employees with a statutory entitlement to vacation time and vacation pay. Amounts and related requirements vary by jurisdiction but in all provinces, after one year of employment, employees are entitled to at least two weeks of vacation time per year and vacation pay of 4% which begins to accrue immediately upon the commencement of employment. In many provinces this entitlement will increase with an employee’s length of service, for example typically 3 weeks and 6% vacation pay after 5 years of service.
- Many employers provide a greater vacation entitlement than is required and allow vacation to be taken in the first year of employment as the vacation time accrues.
Note: Vacations must be approved at least 30 days in advance.
Carry over rules
In most jurisdictions, the carry over of annual leave is allowed. Effectively, a “use or lose” policy is not permitted in Canada.
Sick Leave
Entitlements to sick leave – and employers’ obligations to pay for these absences – vary by province. Employees in all provinces will have the statutorily protected right to a certain number of days of unpaid sick leave. Many employers choose to provide paid sick leave where these entitlements do not exist.
Some provinces provide for a certain number of statutorily protected but unpaid days to deal with responsibilities in relation to caring for family members.
Importantly, employers also have a duty to accommodate an employee on the basis of any disability and family status, etc. Therefore, an employer may be required to permit an employee to be absent (without pay) for more than the mandated statutory leave days.
Compassionate & Bereavement Leave
Under the Employment Standards Act, there is no statutory entitlement for employees to receive paid bereavement leave in Canada (except in Québec). Under most circumstances, employees are entitled the right to take at least 2 days of unpaid job-protected leave per calendar year for the death of immediate family members. The employees’ job is protected in the event of them taking such leave. Many employers will both pay for this leave and indeed extend the number of days allowed via agreement in the employment contract or in an emergency leave policy.
The definition of immediate family members is: an employees’ siblings, spouse, their or their spouse’s parents, step-parents or foster parents, their or their spouse’s grandparents or step-grandparents, their or their spouse’s child, step-child or foster child, their or their spouse’s grandchildren or step-grandchildren, their child’s spouse, or a dependent relative.
Maternity & Parental Leave
Maternity and parental leave entitlements differ by province. In general, pregnant employees have the right to take maternity or pregnancy leave of up to 17, 18 or 19 weeks depending on the province. This leave is unpaid. In Quebec, birth fathers are also eligible for up to five weeks of unpaid paternity leave.
Additionally, in most jurisdictions, new parents (as well as adoptive parents) have the right to unpaid parental leave of between 67 and 78 weeks when a child is born or comes into their care for the first time. Parental leave does not have to begin immediately after the birth of the child or when an adopted child first comes into the care of the parents. Timeframes and rules for this leave vary in different jurisdictions. However, in most jurisdictions, birth mothers who have taken pregnancy leave must begin parental leave immediately following the expiration of the pregnancy leave.
An employer cannot, in any way, penalize an employee that is eligible or will be eligible to take pregnancy or parental leave. They also cannot penalize this employee for taking such leave. Generally, benefits must be maintained. In nearly all cases, employees have the right to return to their job following the leave with their seniority and length of service remaining intact.
Because the employment insurance benefit only covers a fraction of the employee’s regular income, many employers will offer a scheme to “top up” benefits.
Public Holidays
Public holidays in Canada are often called statutory holidays. They are legislated at federal, provincial and territorial levels. There are five nationwide (federal) statutory holidays and six additional holidays for federal employees. Each of the provinces and territories observes a number of holidays in addition to the nationwide days.
Most workers in Canada are entitled to take the day of a public holiday off with regular pay. Some employers may require employees to work. However, the employee must either receive a day off in lieu of the holiday or get paid at a premium rate. This premium is usually 1.5 times or twice the regular pay for their time worked that day, in addition to the holiday pay.
Benefits to the Employee in Canada
Canadian Statutory Benefits
The Canadian social security system is broad and encompassing, incorporating federal law on welfare issues like unemployment insurance and old age security. The system includes provincial policies and programs on welfare issues, such as education, social services and social assistance.
The benefits system also provides benefits for residents of Canada including retirement, unemployment, disability and healthcare benefits.
Additionally, the federal Employment Insurance (EI) system provides benefits in the event of a loss or the interruption of employment. Canada’s public healthcare system also greatly decreases the cost to employers in providing private medical insurance to employees when compared to countries without such systems. Participation in a government-run workers compensation program is either mandatory or optional, depending on the province and the type of work the employer is engaged in..
Other Benefits
Typically, employees in senior roles are offered supplementary benefit packages, which may include:
- Private pension programs
- Supplementary healthcare or dental plans (these typically cover costs of items or care not covered by Canada’s universal healthcare system, such as prescription drugs or vision ware)
- Additional paid annual leave or emergency leave
- Corporate bonus program
- Vehicle allowance
Rules Regarding Visas and Foreign Workers in Canada
General Information
Work Permits
Most people will be required to obtain a work permit in order to work in Canada. There are very few exceptions for particular work types such as academic experts evaluating or supervising academic projects, proposals or university theses.
There are two types of work permits: open work permit and employer-specific work permit. Most permits will be employer-specific.
To commence an application there will be various requirements. Typically, and most importantly, the applicant will be required to provide proof of an offer of employment and a Labor Market Impact Assessment (LMIA) confirmation letter. A LMIA is a document that an employer in Canada may need to obtain prior to hiring a foreign worker. A positive LMIA will confirm that there is a need for a foreign worker to fill the job. It will also demonstrate that no Canadian worker or permanent resident is available to fill the job.
Getting a Tax Number
The Canadian Social Insurance Number (SIN) is a nine-digit number required to work in Canada or to access government programs and benefits. A SIN is issued to one person only and it must not be used by anyone else. Applications to the Social Insurance Registration Office can be made online or by post. There is no fee.
For individual residents in Canada, their authorized tax identification number is their nine-digit Canadian Social Insurance Number (SIN). Every individual resident in Canada with income tax filing obligations is required to have a SIN.
Public Holidays Recognized by Canada in 2024
| Occasion | Date | |
|---|---|---|
| 1 | New Year’s Day | January 1 |
| 2 | Good Friday | March 29 |
| 3 | Easter Monday | April 1 |
| 4 | Victoria Day | May 20 |
| 5 | Canada Day | July 1 |
| 6 | Civic Holiday | August 5 |
| 7 | Labour Day | September 2 |
| 8 | National Day for Truth and Reconciliation | September 30 |
| 9 | Thanksgiving | October 14 |
| 10 | Remembrance Day | November 11 |
| 11 | Christmas Day | December 25 |
| 12 | Boxing Day | December 26 |
Note: GoGlobal does not observe holidays marked as Optional or Federal on the source unless they are also celebrated provincially.
For example, Thanksgiving is a Federal holiday but observed provincially in AB, BC, MB, NT, NU, ON, QC, SK, and YT. Easter Monday is observed federally so GoGlobal does not observe it in any province.
This is because in Canada, Federal holidays apply only to government employees while National holidays apply to all employees.
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