It is important for international companies looking to hire workers in different countries to obey local labor laws and other employment regulations.
Recruiting top-tier Canadian talent can help you expand your business and grow in global markets. But French companies looking to hire Canadian skilled workers need to consider the legal requirements for hiring workers. This will ensure you are building your business presence in major North American economies in a safe and legal way.
This guide will tell you everything you need to know to hire talented Canadian workers while remaining compliant with international laws.
Reasons to Hire Skilled Workers in Canada
Economic Growth Potential
Canada has a large and diverse economy with a business-friendly environment that is beneficial to promoting growth. In terms of GDP, Canada has the 9th largest global economy and is a major presence in several important industries, including natural resource mining, oil, real estate, and finance.
The country has generally experienced steady economic growth and offers an abundance of resources, making it an ideal choice for French companies looking to reach new markets.
Canada is also famously easy to do business with, and offers both relatively low corporate tax and a stable political environment. This makes it easy for international companies to establish a presence and recruit from Canada’s diverse talent pool.
Hiring in Canada offers other strategic advantages as well. Canada is geographically close to other major North American markets and is a member of free trade agreements such as NAFTA. This can potentially allow your company to build connections with other major Western economies like the United States and Mexico.
Skilled Workforce
Canada has a diverse and well-educated talent pool with expertise in a range of desirable industries. Canada has one of the best education systems in the world and ranks 4th globally in 2023, with high-quality professional and technical courses available in nearly every sector. Canadians also rank first among G7 countries for having the highest percentage of working-age people with post-secondary credentials.
Skilled Canadian workers can provide important insights into industries such as technology, research, engineering, aerospace, and more. The Canadian workforce is also multicultural and highly diverse with unique perspectives and skills that can contribute to your company’s success.
Canada also has a national population of around 40 million people, providing ample opportunity to hire competent workers in various industries and expand your business operations.
Bring Innovation to the Global Workforce
French companies looking to hire in Canada can also benefit from the robust research infrastructure and tradition of innovation. Canadian schools receive generous funding from the government and offer top-tier research facilities to contribute to technological and academic advancements.
Many major Canadian cities – such as Toronto, Vancouver, Montreal, and Ottawa – are all notable tech hubs that further drive innovation and development. Significant technology companies such as Google, Apple, and Meta also have a strong presence in some of these cities.
Cultural Similarities
Canada is culturally similar to many European nations, making it a good choice for French companies looking to hire in Canada. Canada is a bilingual country with both English and French as national languages, with around 23% of the total population boasting French as a second language.
This can help French companies facilitate a more seamless expansion into English-speaking territories.
Regulations for French Companies Hiring Canadian Skilled Workers
International companies looking to recruit Canadian skilled workers must consider various legal and employment regulations to avoid noncompliance penalties. Canadian labor laws can be somewhat complicated because you need to adhere to both federal legislation and provincial employment regulations.
An employer of record (EOR Canada) can help simplify the hiring process, handle complicated HR obligations, and minimize potential risks.
Wages for Canadian Employees
Canadian workers are legally entitled to an hourly minimum wage. The federal minimum wage is currently $16.65 per hour, but minimum wages can vary between provinces.
A typical work day in Canada is eight hours, and a standard workweek is 40 hours. Employees who work more than 40 hours in a week are entitled to overtime pay and can receive:
- At least 1.5x the hourly wage
- Time off with pay that’s equivalent to 1.5 hours of time off for every hour worked
Overtime in Canada is capped at 48 hours per week. Certain positions, such as high-level managerial roles, are exempt from being eligible for bonus pay depending on the province. Canadian workers are paid in CAD.
Employers are not legally required to provide additional pay such as bonuses unless specifically stated in the employment agreement. Many companies, however, opt to reward employees based on company profits or worker performance.
Leave Entitlement
Employees in Canada are entitled to various forms of leave to help promote an ideal work-life balance, which helps maintain mental health and productivity.
Canadian skilled workers may receive up to:
- Two weeks of paid vacation per year after one year of employment with the same employer
- Three weeks of annual vacation after five consecutive years
- Four weeks after 10 consecutive years.
Employers must give employees up to two weeks' notice of scheduled vacation time. Employees may also opt to forgo their entitled vacation time and receive proportional payment instead.
Canada has national statutory holidays that include:
- January 1 (New Year’s Day)
- Good Friday
- May 22 (Victoria Day)
- July 1 (Canada Day)
- the first Monday of September (Labour Day)
- September 30 (Truth and Reconciliation Day)
- the second Monday in October (Thanksgiving Day)
- November 11 (Remembrance Day)
- December 25 (Christmas Day)
- December 26 (Boxing Day)
Additional statutory and civic holidays may vary between each province.
Workers in Canada are also entitled to up to 17 weeks of sick leave and up to 10 days of statutory leave. New mothers can receive up to 17 weeks of unpaid maternity leave.
Additionally, all new parents have the right to take up to 61 or 63 weeks of unpaid time off. Employees can take up to five days of bereavement leave.
Indigenous workers with at least three months of continuous employment can take up to 5 days of leave each calendar year to participate in traditional practices such as fishing, hunting, or other ceremonies.
A qualified employer of record in Canada with knowledge of Canadian tax and employment rights can ensure your company is following the rules and providing the necessary time off for your workers.
Payroll, Taxation and Canadian Laws
International companies hiring in Canada are responsible for setting up proper payroll and tax procedures for permanent workers. Employees are paid twice monthly on the 15th and at the end of the month.
Employee income tax rates are dependent on the worker’s annual salary or wage. The taxation rates in Canada are:
- 15% for salaries up to $48,535
- 20.5% for salaries between $48,535 and $97,069
- 26% for salaries between $97,069 and $150,473
- 29% for salaries between $150,473 and $214,368
- 33% for salaries $214,368 and above
Employers operating in Canada are also subject to payroll taxes. Global companies must provide:
- 2.28% Employment Insurance
- 5.95% contribution to the Canada Pension Plan
Employers hiring workers in Quebec are responsible for paying additional payroll taxes. These taxes include:
- 1.27% for Employment Insurance
- 6.4% for the Canada Pension Plan
- 0.692% for the Quebec Parental Insurance Plan
- 1.25-4.26% for the Health Services Fund
- 0.06% Labour Standards
Employers who do not comply can face financial or legal penalties.
Employee Benefits
Skilled full-time workers in Canada are legally entitled to various benefits and rights, such as maternity leave, mandatory paid time off and sick leave.
Many companies also provide other supplementary benefits, including:
- Additional paid and unpaid Leave
- Contributions to retirement plans
- Employer-funded health insurance for additional expenses (prescription medication, dental, etc.)
Severance Pay and Termination of Contracts
Full-time employees in Canada are protected against wrongful termination after the initial probation period. Employers who wish to end an employment agreement must have an adequate reason, which can include misconduct, theft, insubordination, or a mutual agreement.
If your company is hiring in Canada, it’s important to know that the minimum notice period for termination is two weeks (or one month in Ontario and Quebec). Or you can offer the employee payment instead of sending notice if termination is immediate.
Employers must send a written notice informing the employee in advance of termination of employment. Probation periods in Canada typically last for three months, and the employer or employee can terminate the agreement during this period without penalty.
Canadian workers who have at least one year of consecutive employment from the same employer are eligible for severance pay.
Severance pay is equivalent to two days’ pay at the employee’s set wage for each year of employment. The amount of severance required to be paid by the employer can vary between provinces.
Severance pay is not required for employees that are terminated with just cause, company lay-offs that don’t result in termination, or if the employee ends the agreement.
Employment Contracts in Canada
Legal employment contracts in Canada can be either verbal or written. It’s good business practice to use a traditional formal contract when dealing with more complicated full-time arrangements that include benefits.
There are a few different types of contracts to consider when hiring Canadian workers. Formal employment agreements should include:
- The duration of contract if applicable
- The hours of work
- Job responsibilities
- Salary, bonuses, and benefits
- Notice period for termination
- Probationary period
Indefinite or Open-Ended Employment Contracts
This type of contract is meant for traditional full-time permanent employees and does not specify an end date. Indefinite employees have more legal protections and require notice of termination and severance pay when applicable.
Fixed-Term Contracts
Fixed-term contracts are meant for short-term or temporary working arrangements. In the contract, you must specify an end date for the employee.
You are not required to provide notice or supplementary pay after the agreement ends unless the worker is terminated without cause prior to completion. Employees terminated before the end of the agreement may be entitled to the remaining balance specified in the agreement.
Freelance and Independent Contractor Agreements
These contracts allow your company to employ self-employed Canadian workers for a pre-set duration.
Companies hiring freelance workers in Canada are not responsible for handling taxes or providing additional benefits. However, misclassifying your employees may result in noncompliance penalties.
How to Legally Hire Employees in Canada as a French Company
Canada has a large and diverse economy, a skilled workforce, and a tradition of innovation that can help you grow your company and reach new markets. However, there are important legal requirements that must be met when hiring skilled Canadian workers.
To start recruiting top-tier Canadian talent to your team, your company will need to set up a legal entity. A legal employer of record can help handle all the complicated aspects of the hiring process for international employees and keep your company compliant with local regulations.
Employer of Record
An EOR acts as a legal entity in the country you wish to hire from and allows you to legally employ international workers. EORs also have knowledge of local tax and employment laws to ensure regulations are followed. Hiring an EOR to handle all required documentation can be extremely helpful when expanding into new territory so you can focus on growing your company and managing your staff.
EORs in Canada offer a wide range of benefits in addition to a specialized knowledge of regulations and can handle:
- Payroll
- Employee benefits
- Termination
- HR responsibilities
- Onboarding
Partnering with an EOR can keep your company compliant with local labor laws by ensuring the correct amount of taxes are deducted, employment agreements are valid, and all employees are correctly classified to protect you from facing penalties.
EORs also offer several other benefits. These include responsibility for disputes between employees and employers, which can help protect your company.
Set Up a Legal Entity
Alternatively, companies hiring in Canada can opt to set up a legal entity themselves.
Employers are responsible for all HR-related obligations, including taxation, payroll, and compliance with labor laws or agreements. Failure to do so could result in fines or other punishments.
This route may be beneficial to French companies who want to operate in Canada or hire over 25 Canadian employees. In this regard, partnering with an EOR might be a more cost-effective solution for many international businesses looking to hire fewer employees.
To establish your company as a legal entity, you will need to provide:
- The legal name of your company
- Where your main office will be located
- What provinces or territories you plan to operate in for federal companies
- What type of business you are (Sole Proprietorship, Corporation, Limited Partnership, etc.)
Companies also must also get a business number and register with the Canada Revenue Agency (CRA) for taxation purposes. Employers are responsible for paying the associated fees for incorporation. These can range from $200 to $1000 depending on the location.
Partner with Borderless
If you’re a French company looking to expand into major North American markets, Canada is an excellent choice with a large economy, a strategic location, and business-friendly infrastructure. A quality employer of record can help your company remain compliant with local labor laws, attract top talent from around the world, and save money in the hiring process.
EORs are also more affordable and convenient than setting up your own legal entity. Focus on managing employees, performance management, and building a strong team of your own skilled workers, while your EOR handles the rest.
Borderless has a proven track record of success and extensive knowledge about Canada’s federal and provincial employment regulations. We offer a wide range of EOR services to help expand your business into new markets and hire employees from over 170 countries across the world.
Contact Borderless Today
Contact our team at Borderless or set up a demo today too quickly and efficiently hire skilled workers without risking noncompliance penalties.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
