Canada and the United States have a friendly relationship and Canada represents a lucrative market for American businesses. Yet even after those facts are taken into account, many of those businesses still remain undecided about entering that market because of the complexities of Canadian employment laws in comparison with those in the United States. Human resources(HR), and payroll are the departments most affected, a benefit to HR and payroll outsourcing companies. Below are three of the reasons for such outsourcing firms investment in HR and payroll software for multiple companies.
- Deductions: The payroll software for multiple companies mentioned above, unfortunately, cannot do everything alone, and Canadian deductions are complicated, and they change in each province. For example, there is a national pension plan to which both employers and employees contribute, and the amount is dictated by federal law, except in Quebec, which has its own system. However, that pension plan does not provide enough to live on, so employers often offer another pension program as well, with a separate contribution system.
- At Will Employment: Canadian employment is all contract employment, and the American concept of “at will” employment does not apply. This means that an employee must be given either substantial notice of termination or a financial award as a substitute, except in cases of just cause. For an HR department, documentation for any just cause termination can be a nightmare if the infractions are small offenses over time. This sends many straight to resource management services rather than learning an entirely different set of rules and procedures
- Bad Faith Dismissal: An employee that has been fired in Canada can actually receive a financial award if they were let go in a way that was callous or inconsiderate. For example, if an individual is going through a divorce, the date of their termination might be delayed by management to not add more stress, and cost, to the termination
Employment in Canada is more complicated than not expanding into the Canadian market, but without the potential profit. In the end, there are services to help those companies that hesitate, if needed, if that potential reward finally outweighs the risk.