PEO Canada
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Global PEO in Canada
Canada is an attractive destination for global businesses seeking professional employer organization (PEO) services due to its robust and business-friendly environment. As a PEO country, Canada offers a highly skilled and diverse workforce, making it easier for companies to find the right talent for their specific needs. The country’s well-developed infrastructure, stable political climate, and strong economy further contribute to its appeal as a PEO destination. Additionally, Canada’s progressive employment laws and regulations provide a solid framework for PEO companies to operate within, ensuring compliance and smooth operations for both employers and employees. With its commitment to innovation and technology, coupled with a high standard of living, Canada stands out as a premier choice for companies looking to expand their global presence and leverage the benefits of PEO services.
What Is a PEO?
A PEO, or Professional Employer Organization, is a company that provides a range of HR and payroll services to small and medium-sized businesses. These services can include employee benefits, payroll, compliance with labor laws, and recruiting and training.
PEOs work by entering into a co-employment agreement with the businesses they serve. In this arrangement, the PEO becomes the employer of record for the business’s employees, taking on responsibilities such as payroll, tax withholding, and employee benefits. The business, however, retains control over its day-to-day operations and the supervision of its employees.
PEOs can help businesses streamline their HR and payroll processes, reduce costs, and free up time and resources to focus on their core business activities. They can also provide access to a range of benefits and resources that small businesses may not be able to afford or manage on their own.
PEOs are also understood as employer of record / EOR at times.
Canada – Country Overview
Canada is the second-largest nation in the world by landmass and is barely populated. The country has the world’s longest coastline and shares it with the United States of America. It boasts a multicultural society that welcomes foreigners and exports a vast amount of intellectual and natural resources. Canada is a Commonwealth state that obtained self-governance in 1931 and full legislative authority in 1982.
Capital City
Ottawa
Currency
Canadian Dollar (C$)
Principal Language
English, French
Government
Federal Parliamentary Democracy under a Constitutional Monarchy
Employment Contracts in Canada
All Canadian-based employers must have contracts with their employees that are either written or verbal and both are equally binding and enforceable.
There is no precise definition in the Labor Code of Canada of what constitutes a written agreement.
Some of the details typically mentioned in the written contract include:
- Job title and pay (including overtime rates)
- Sickness and work-related injury entitlements
- Pension schemes or social security
- Disciplinary rules and grievances
- and more
The different types of employment relationships are:
- Permanent Employment – Under the permanent employment designation, the Canadian Labor Code specifies four major categories. There are four types of jobs:
- full-time
- part-time
- casual
- managerial/professional
- Fixed-Term Contracts – Per the Labor Force Survey of Canada, contract jobs are positions that are defined by the employer before hiring and are supposed to end on a certain date or once a specific task or project is completed.
- Temporary Employment– The Labor Code of Canada does not distinguish between permanent and temporary employees. Under the law, all employees are protected.
Probationary Period
In Canada, a probationary period is set at the provincial level and typically ranges from 1 to 12 months.
Working Hours in Canada
Employees are required to work 8 hours per day, or 40 hours per week.
The maximum permissible limit for the weekly schedule is 48 hours. Employees in certain professions are exempt from the 48-hour work schedule in a week. The restrictions on the work hours also do not apply to management-level employees and some high-priority jobs without regular work schedules. Employees also may have to work on a modified schedule that may compress the total weekly hours into fewer days.
Holidays in Canada
Employees in Canada are entitled to the following leave:
- Annual leave in Canada – Per the Canadian Labor Law, employees are entitled to:
- 2 weeks of annual leave – on completion of 1 year of employment
- 3 weeks of annual leave – on completion of 5 years of employment
- 4 weeks of annual leave – on completion of 10 years of employment
- Maternity leave in Canada – Per the Labor Code of Canada, female employees are entitled to a paid maternity leave of up to 17 weeks.
- Sick leave in Canada – Employees get paid sick leave of 17 weeks if they have worked for the same employer for a minimum of three consecutive months.
- Parental leave in Canada – Employees who are entitled to the Employment Insurance (EI) parental benefits in Canada have two alternatives under the Employment Insurance Act: standard or extended.
Public Holidays
The following are the statutory national holidays in Canada:
- January 1 – New Year’s Day
- April 2 – Good Friday
- April 5 – Easter Monday
- May 24 – Victoria Day
- July 1 – Canada Day
- September 6 – Labor Day
- September 30 – National Day for Truth and Reconciliation
- October 11 – Thanksgiving Day
- November 11 – Remembrance Day
- December 25 – Christmas Day
- December 26 – Boxing Day
Employee Termination in Canada
Employers must, generally, either provide the employee two weeks’ written notice or pay the employee two weeks’ regular earnings instead of notice when they decide to terminate a position.
Global Mobility in Canada
There are typically two categories of visas in Canada:
- Temporary visas – Temporary visas allow the applicant to reside in Canada for a set period, generally up to six months, for tourism, visiting family, learning, or working (can be single-entry or multiple-entry).
- Permanent visas – Permanent visas allow the holder to live and work in Canada indefinitely, to become a Canadian citizen.
Most employment requires foreign nationals to get a work permit. There are usually two types of work permits in Canada:
- Employer-specific work permit– An employer-specific work permit allows a person to work in Canada for a certain employer. The nature of work to be done, the employer, the location of work, and the period of the permission must all be included.
- Open-work permit– With a few exclusions, an open work permit allows anyone to work for any employer in Canada.
Employee Benefits in Canada
The two kinds of retirement benefit systems for employees in Canada are:
- contribution-based – Canada Pension Plan (or the Québec Pension Plan, if the employee lives in Québec) (CPP/QPP)
- government-sponsored – Old Age Security Plan (OAS)
Social insurance, often known as social welfare, is a government-mandated insurance program that provides financial help to the elderly, the disabled and the injured, and the unemployed.
Some examples of social insurance programs in Canada are:
- Dependents’/Survivors Benefit – The Canada Pension Plan (CPP) pays survivor benefits to authorized survivors or the estate of a departed contributor who has made sufficient contributions to the scheme. Beneficiaries include legal spouses, common-law partners, and legally separated spouses.
- Life and Disability Insurance/Benefit – To qualify for a disability benefit under the Canada Pension Plan, a disability should be both “serious” and “chronic,” and it must prevent the employee from working at any job regularly.
- Unemployment Insurance – The Employment Insurance (EI) scheme requires temporary financial assistance to unemployed workers while they search for employment in Canada or develop their skills.
