.webp){kind=small}
How to hire remote employees in
Canada has relatively strict labor laws. Odds are, they’re stricter than the laws in your home country—and even if they aren’t stricter, they’re certainly different. Here’s what you’ll want to know before hiring remotely in Canada:
If you want to successfully hire in
Canada
, you have two options:
Laws about hiring contractors are significantly more simple in
Canada
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Thera for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
Canada
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
Canada
.
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
Canada
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
Canada
, you can pay them with Thera in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Canada than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Canada.
Employees that have been employed for less than 5 years are entitled to a minimum of 2 weeks’ paid leave, while employees who have worked over 5 years are entitled to 3 weeks.
There are 9 public holidays in Ontario. More information can be found here.
Employees are entitled to 3 unpaid sick days a year if they have been employed for more than 2 weeks.
If the woman has been employed for at least 13 weeks, she is entitled to up to 17 weeks of unpaid maternity leave. Maternity leave can start any time starting 17 weeks before the due date.
Paternal leave falls under parental leave.
At the end of the maternity leave, the mother is able to extend the leave with parental leave for up to 61 weeks of unpaid parental leave. Parental leave rights also extend to the father.
If an employee has been employed for at least 3 months, the employer is obligated to provide the employee with written notice of termination or termination pay.
The employee is obligated to give at least 2 weeks’ notice.
The length of the notice period that the employer is obliged to depends on how long the employee has been employed:
Length of employment Notice Period
Less than 1 year 1 week
1-3 years 2 weeks
3-4 years 3 weeks
4-5 years 4 weeks
5-6 years 5 weeks
6-7 years 6 weeks
7-8 years 7 weeks
8+ years 8 weeks
In order for the employee to qualify for severance pay:
The employee must have completed at least 5 years of employment
The company has a payroll of over 2.5 million CAD per year or have terminated over 50 employees in the past 6 months due to all or part of the company closing
The severance pay amount is calculated by multiplying the weekly salary amount by the number of years the employee has been employed.
3 months
A full-time workweek is 40 hours.
Overtime pay is paid for every hour after 44 hours weekly at a rate of at least 150% the regular pay. The maximum number of hours an employee can work is 48 hours a week unless agreed upon in writing by the employee and employer.
.png)
Book a demo to get started.
