Guide to hiring employees in Canada

Background checks in Canada

An employer may legally conduct a background check if they have a good reason for doing so. However, they must provide the applicant with clear notice that a criminal record check is part of the application process. They must also get the applicant’s permission before conducting the check.

Background checks involve personal information, so various laws are in effect to ensure candidates' privacy. Each province and territory has its own privacy laws.

Canadian companies that operate within a federally regulated industry, such as banks, airlines, or telecommunication companies, must comply with the Personal Information Protection and Electronic Documents Act (PIPEDA).

Personal Information Protection and Electronic Documents Act (PIPEDA) governs organizations engaged in commercial activity and applies when personal data crosses provincial boundaries or internationally. Personal data includes any factual or subjective information that is recorded. This includes names, ages, IDs, education levels, incomes, social statuses, disciplinary action histories, employment files, financial records, and health histories.

Types of leave available in Canada

Annual leave

Annual leave in Canada is determined by provincial law, but employees typically receive a minimum of nine days depending on the province they’re based in and the length of their tenure.

Maternity leave

Pregnant employees are entitled to up to 17 weeks of unpaid time off. In some cases, this period can be extended. Employers are not obligated to pay employees during this time however the employee can make specific claims via their Employment Insurance, and employers have the option to top up these payments.

In the case of a stillbirth or miscarriage, an employee is allowed to take up to 12 weeks of unpaid maternity leave.

Parental leave

The Canadian government allows new parents to take unpaid time off when a baby or child is born or comes into their care. Birth mothers who have taken maternity leave are entitled to up to 35 weeks of leave, while those who did not take maternity leave can take up to 37 weeks of parental leave.

Birth mothers are entitled to take both parental and maternity leave as both are considered different categories of leave entitlements. As the right to parental leave is independent of the right to pregnancy leave, a birth father can, for example, be on parental leave while the birth mother Is on either maternity or parental leave.

While on leave, both parents can apply for parental benefits and continue to earn credit for length of employment, service, or seniority. In most cases, an employee must be given their old job back upon returning from pregnancy or parental leave.

Sick leave

There are no statutory allowances for sick days taken in Canada. However, the Canada Labour Code provides leave for illness or injury as well as work-related illness or injury.

Employees that have completed three months of continuous employment with the same employee are entitled to sick leave protection not exceeding 17 weeks. In general, the code is designed to protect employees against dismissal, lay-off, suspension, demotion, or discipline because of absence due to illness or injury.

On the 20^th of May 2021, Canada’s Employment Standards Amendment Act legislated that employees of British Columbia can now receive up to three days of paid leave for any COVID-19-related illness.

For employers that don’t currently have a sick-leave program, the British Columbia government will reimburse them up to CAD$200 per day per worker on sick leave. This program is administered by WorkSafeBC through an online application for employers registered for WorkSafeBC coverage.

Supplementary notes on sick leave in Canada:

• Employees are responsible for providing a medical certificate if requested by the employer within 15 days of their return to work.
• An employee can opt to interrupt their parental leave, compassionate care leave, leave related to critical illness and leave related to death or disappearance to take sick leave. Under these circumstances, the other leave resumes immediately after sick leave ends. Some employees may be entitled to cash benefits under the Employment Insurance Act (EI).

Apart from the above, Canada also provides its employees with additional leave such as:

• Bereavement leave: Three days mandatory
• Compassionate care leave:  Provincial regulation of approximately eight weeks
• Personal emergency leave: Up to 10 days per year
• Domestic violence and sexual assault leave: Up to five days
• Critical illness leave: Up to 37 weeks
• Child death leave and crime-related Child disappearance leave: Up to 104 weeks
• Family medical leave: Up to 28 weeks

Public holidays in Canada

Also known as Statutory holidays, public holidays in Canada are observed on a federal and provincial level. There are currently five nationwide statutory holidays followed by an additional six holidays for federal employees. Each of Canada’s 13 provinces and territories also celebrates a multitude of different holidays.

Nationwide statutory holidays

• New Year’s Day
• Good Friday
• Canada Day
• Labour Day
• Christmas Day

Federal statutory holidays

• Easter Monday
• Victoria Day
• Civic Holiday
• National Day of Mourning
• National Day for Truth & Reconciliation
• Thanksgiving
• Remembrance Day
• Boxing Day

Attracting talent in Canada

Businesses around the world have seen tumultuous times due to the uncertainty brought on by the pandemic. In the last two years, values have changed as the Canadian workforce rebuilds its foundation and employees reassess their motivations when it comes to their career plans. This alters the way in which companies approach employee retention. 

Work-life balance, for example, now surpasses salary, according to new research by ADP Canada and Maru Public Opinion. 31% of Canadian employers say that a job that encourages work-life balance is of greater importance to them now, while 39% say that work-life balance is more important now compared to before the pandemic.

This shift in priorities and many others are majorly impacting how businesses recruit new talent. To successfully attract and retain employees, employers must recognise and respect the relationship between work and their employees’ personal lives. Both are intertwined, and employees that feel their jobs give them the space to show up in their personal lives are more likely to stay and grow with their current companies.

Apart from the above, Canadian employees now also gravitate towards:

Flexibility in the workplace

Whether it’s how their working hours are organised or where they work, Canadian employees see flexibility as a key motivator when deciding to join or stay with a company.

PwC found that only one in five Canadian employees are eager to return to the in-office model of yesteryear. In Quebec, 40% of workers claim that their ideal model is one that allows them to be either fully or partially remote.

Transparent leadership

Employees today are more discerning of their leaders and place greater emphasis on self-security. Letting information flow freely fosters trust and bridges the gap between communication and collaboration.

Leadership teams that are honest about their strategy, goals, and challenges not only create space for employees to feel as if they’re part of the decision-making process but also show them that you respect them enough to share your vision and intentions.

Meaningful employment

Finding joy in the work they perform is the lifeblood of employee engagement, and according to a survey by ServiceNow, 88% of Canadian employees want their work to be more meaningful.

Employees want to be involved in work that provides them with both personal and professional growth; however, many feel that 30% of their time is spent performing menial tasks that get in the way of purposeful work.

One of the ways companies can overcome this is to invest in technology that can help to reduce low-value work and free up time for employees to focus on the more fulfilling aspects of their job. And 67% of employees feel that this is the way to go.

What are the employee rights in Canada?

In addition to the labour laws and regulations mentioned earlier, employees in Canada have various rights that are protected by both federal and provincial laws. Here are some important employee rights in Canada:

Right to equal treatment

Employees have the right to be treated fairly and without discrimination based on factors such as race, gender, religion, age, disability, and more. This includes equal pay for equal work.

Right to a safe and healthy work environment

Employees have the right to work in an environment that is free from hazards and risks to their health and safety. Employers are responsible for implementing safety measures and providing training to prevent workplace accidents and injuries.

Right to fair compensation

Employees have the right to be paid at least the minimum wage set by the applicable provincial legislation. They are also entitled to timely and accurate payment of wages, including overtime pay when applicable.

Right to fair treatment on termination

 When terminated without cause, employees generally have the right to receive notice or pay in lieu of notice, also known as severance pay. The amount of notice or severance pay depends on factors such as length of service and the applicable employment standards legislation.

Right to annual leave

Employees have the right to various types of leaves, including maternity and parental leave, sick leave, family emergency leave, and bereavement leave. These leaves are designed to accommodate personal and family-related needs.

Right to join a union

Employees have the right to join or form a union to collectively bargain and negotiate employment terms and conditions. Unionised employees also have the right to strike under certain conditions.

Protection from retaliation

Employees have the right to raise concerns about workplace conditions, safety, or other matters without facing retaliation from their employers.

These employee rights help ensure that Canadian workers are treated fairly and with respect in the workplace. Please note that employee rights and their associated legislations may vary according to the province you are expanding to. 

Hiring best practices when expanding your business to Canada

When expanding a business to Canada, implementing effective hiring practices is essential to build a strong and compliant workforce. Here are some hiring best practices to consider:

Understand local labor laws

Familiarise yourself with the labour laws and regulations specific to the province where you're expanding. As mentioned above, each province has its own employment standards and regulations that you need to adhere to.

Create clear job descriptions

Develop detailed job descriptions that clearly outline the responsibilities, qualifications, and expectations for each position you're hiring for. This helps attract candidates who are a good fit for the role, as well as passive candidates who might not be actively looking for a role, but could be swayed by the right job postings. 

Conduct fair practices

Ensure that your hiring process is fair and free from discrimination. Avoid asking inappropriate questions during interviews and base hiring decisions solely on the candidate's qualifications and abilities.

Structured interview process

Develop a structured interview process that includes a set of standardised questions for each candidate. This helps ensure consistency and fairness in evaluating candidates.

Assess cultural fit

Consider how well candidates align with your company's values and culture. A good cultural fit can lead to higher job satisfaction and productivity.

Verify eligibility to work

Before hiring, verify that candidates are eligible to work in Canada. This typically involves checking their work permits, immigration status, and related documentation.

Background checks

Conduct background checks as needed, which might include criminal record checks, reference checks, and credential verifications. It's also useful to conduct reference checks to get an insight into the candidate's work ethic and job history. 

Offer competitive compensation

Research prevailing wages and compensation rates in the local market to ensure your offers are competitive and attractive to potential hires.

Provide clear employment contracts

Draft comprehensive employment contracts that outline terms and conditions of employment, including job duties, compensation, benefits, and termination clauses.

Offer benefits and perks

Consider offering benefits and perks that are commonly provided in the Canadian job market, such as health insurance, retirement plans, flexible work arrangements, and professional development opportunities.

Comply with privacy laws

Respect candidate privacy and comply with privacy laws when collecting, using, and storing candidate information.

Ensure transparent communication

Maintain clear and open communication with candidates throughout the hiring process. Inform them about the timeline, next steps, and any relevant details.

Provide a thorough orientation and onboarding process

Once hired, provide a thorough orientation and onboarding process to help new employees integrate into the company culture and understand their roles.

Offer training and development

Provide ongoing training and development opportunities to help employees enhance their skills and contribute effectively to the organisation.

Prioritise diversity and inclusion

Prioritise diversity and inclusion in your hiring practices to create a diverse workforce that brings a variety of perspectives to your business.

Consult legal experts

Given the complexity of Canadian labor laws, consider consulting with legal experts or HR professionals to ensure your hiring practices are fully compliant.

By following these best practices, you can build a strong and productive workforce as you expand your business to Canada, while also ensuring that you're in compliance with local laws and regulations.

What should the onboarding process look like for new hires in Canada?

When onboarding employees after expanding to Canada, a well-structured process is key. During orientation, introduce them to the company's history, structure, and policies, including those for conduct, health and safety, and reporting. Clarify their role and performance expectations, providing job-specific training and highlighting opportunities for growth.

Cover compensation, benefits, and workplace tools, and emphasise the company's values and culture. Discuss workplace policies, dress code, and communication norms. Ensure they understand health and safety procedures and offer chances to integrate socially with colleagues.

Handle paperwork, contracts, and tax forms, and provide access to company resources like handbooks and intranet portals. Schedule regular check-ins to address questions and offer ongoing support. A thoughtful onboarding process helps new employees feel welcome, informed, and ready to contribute effectively to your business.

Termination of employment in Canada

A two-week notice period is the norm in Canada, and the employer is required to provide the employee with written notice of their intention to terminate the employment. In lieu of that, the employer must pay the employee two weeks' wages at the regular rate.

The above applies to any employee being terminated except for the following reasons:

• The employee has not completed three consecutive months of continuous employment
• The employee is the one who decides to terminate their employment contract
• The employee is dismissed for a just cause
• The employee is being laid-off
• The employee’s contract with the company ends on a date that is specified in the contract.

Severance pay

In most cases, the standard probationary period in Canada is three months. All employees who have completed a minimum of 12 months of continuous employment with an employer are entitled to severance pay. This is calculated as two days' pay at the employee’s regular rate of wages for each full year of employment, with a minimum of five days’ pay. 

The employer is obligated to provide the employee with severance pay under all circumstances except when:

• A layoff does not result in termination of employment
• An employee’s contract ends on a date that is specified in their contract
• The employee is being dismissed for a just cause
• The employee chooses to terminate the employment