Foreign Employees & Independent Contractors

CANADIAN EMPLOYMENT: FOREIGN EMPLOYEES & INDEPENDENT CONTRACTORS

     Nunzio Presta
     Senior Sales and Marketing Executive

US CITIZENS AND THE CANADIAN EMPLOYMENT STANDARDS

If you have a US citizen working in Canada and performing work in Canada, they should be on a work permit. Depending on what province they are in, they have to follow the employment standard act.

Since they follow the Canadian employment standards, that means that their vacation and sick leave, as well as their pay rate, will be mandated by the provincial employment standards act or the federal Canada labor code if they are in a federally regulated industry.

As the employer, you will need to process this permit with them. This visa could be for a few months only to be extended if required, or for a longer time to lead to permanent residency in Canada.

One of the requirements you need to obtain for your US citizen employee’s working permit is the Labour Market Opinion or LMO. A positive LMO assures the Canadian government that the position was given to a US citizen because no Canadian is available yet for that job position.

INDEPENDENT CONTRACTORS IN CANADA

Depending on your business’ needs, hiring an independent contractor is a great choice, which gives you less work when it comes to payroll. But since Canada does protect the rights and benefits of every worker, they also protect the independent contractors.

Under the law, an employer doesn’t need to process or remit the government contributions or taxes of their independent contractors as it is the contractor’s responsibility. They only invoice you for the hours or services they have done for a certain period, and that is the only amount you are responsible for.

But be very careful because if you’re treating someone like an independent contractor, you have to make sure that they indeed are independent contractors. Meaning, they have control over their tools, work schedule, and work outcome. And they’re not dependent on you financially. If you treat them like an independent contractor, when they’re actually an employee, you will be on the hook for paying all the employer and employee back taxes for them. Be very cautious when classifying your workforce.

MANDATORY TRAINING IN THE WORKPLACE

Clear and consistent training can help you avoid issues and miscommunications throughout an individual’s employment with your company. Some mandatory training in Canada includes workplace violence, harassment, and sexual harassment prevention training. There’s also health and safety awareness training for both employees and managers.

Accessibility for Ontarians with Disabilities Act or AODA training represents another fundamental training for businesses in Ontario. As of February 2019, 1.9 million people in the province have a disability, and the number keeps going up. This free training is designed to provide all employees, whether they have disabilities or not, the knowledge and skills to interact confidently with people with disabilities.

All of the training mentioned above is mandatory in Ontario, and it is a best practice to cover each area in other provinces, even if only some are mandatory.

CONCLUSION

Knowing the process, requirements, and responsibilities as an employer is essential to maintaining working relationships with each employee and protecting your business.

Employment standards vary by country, and in Canada, every province and territory has its own standards. Knowing the process in the area where your business is located and any territories you wish to expand into is essential for your business to remain legally compliant.