HR Policies & Procedures

Key Differences in US and Canada Employment Laws

Canada employment laws can be quite different to their counterparts in the United States. US employers with operations in Canada need to be well-versed in these differences to stay in legal compliance on both sides of the border. Here are some of the big-picture differences of which to be aware.

Canada Employment Laws: Minimum Employment Standards

In Canada, the general employment standards are governed both at the federal and provincial level. “Minimum work conditions are set out in the various provincial and federal employment standards act. So, there are distinct employment standards acts in each province for companies under provincial jurisdiction. If a company is under federal jurisdiction, employment standards are provided for in the Canada Labor Code.” Emilie Paquin-Holmested explained in a recent BLR webinar.

“Employment standards laws set the minimum work conditions that all employers must respect in regards to their employees. Consequently, if any agreement between an employer and employee provides less than the minimum standards, then that employment agreement will be illegal.” Paquin-Holmested cautioned.

Here are some examples of the Canadian employment laws (bear in mind that the specifics will vary by province):

  • Minimum wages. In Canada, each province sets its own hourly minimum wage, and this is usually revised annually. Minimum wage currently varies between $9.75 and $10.30 (Canadian dollars).
  • Hours of work and overtime. The concept of “hours of work” exists to determine when overtime becomes due. Overtime is 1.5 times the regular rate of pay. Hours of work are usually set as a weekly amount.
  • Rest and meal periods. These standards usually provide for weekly required rest periods and daily required meal periods. Most commonly, a weekly rest period will be equivalent to a 24-hour period that an employee must be off. A meal period will be 30 minutes for every 5 hours worked.
  • Mandatory holidays. These are paid days off for employees. The required number varies from province to province, but on average employees will be entitled to 8 or 9 statutory holidays every year.
  • Vacation periods and pay. The amount of paid annual vacation to which an employee is entitled to depends on his or her years of service for the company. Usually an employee with one full year of service will be entitled to 2 weeks of vacation. That number will go up to 3 weeks after 5 or 6 years of service.
  • Leaves (pregnancy or maternity, parental, emergency, and family medical). Pregnancy or maternity leaves in Canada are usually approximately 17 weeks. They can begin before the mother gives birth. Certain provinces also provide for 5 weeks of paternity leave. In addition, new parents can take up from as much to 35 to 37 weeks off for parental leave. This can be shared between the parents and begins after the birth.In some provinces, employees can also take up to 10 unpaid days off a year for personal emergencies or to fulfill family obligations. Employees can also take leave for a number of weeks to provide care and support to a family member who suffers from a serious medical condition with risk of death.
  • Termination notice and severance pay. Each province provides for a minimum termination notice period. It varies between 1 and 8 weeks, depending on the employee’s years of service. However, by applying common law principles, tribunals will often find that the legal minimum termination notice is actually insufficient.The appropriate termination notice will be calculated by taking into account certain characteristics of the terminated employee, such as their years of service, their position, their salary, and their age. The termination notice period can be worked, it or can be paid to the employee. Usually employers will pay it. In addition to the termination notice, employers in certain provinces must also pay severance pay to the terminated employee.
  • Unjust dismissal hearings with possible reinstatement remedy. In some provinces, an employer cannot terminate an employee with 1 to 2 or more years of service without good and sufficient cause, even with reasonable termination notice. Unlike the United States, employment is not considered “at will.” Employers can only terminate employees for cause or for reorganization or financial reasons. If an employer is found to have terminated an employee without cause, the tribunal could order reinstatement of the employee with retroactive pay.

Each of these items varies by province and employers should consult counsel and understand the rules that are specific to each province you work in.

For more information on Canadian employment laws, order the webinar recording of “Operating in Canada in 2013: What You Must Know Now Regarding Employment Laws North of the Border.” To register for a future webinar, visit http://store.blr.com/events/webinars.

Emilie Paquin-Holmested is a member of Fasken Martineau‘s Labour, Employment & Human Rights Group in Montreal. Her practice focuses mainly on labour relations, employment law, human rights law and administrative law.