Country Information

Canada is a North American country bordered by the United States to the south. Canada is made up of 10 provinces and three territories, making it the world’s second largest country by landmass. English and French are the official languages however Punjabi, Spanish, Tagalog and Arabic are some of the other languages spoken. Canada is often regarded as one of the least corrupt countries in the world. With an extremely diversified economy and political stability it remains one of the best places for international expansion into North America.

Employment Contracts

In Canada, an employment agreement can be either verbal or written, and for an indefinite term or fixed term, but a written employment agreement is recommended. Employment contracts should include:

  • Clauses regarding termination
  • Probation, working hours
  • Salary and leaves
  • Bonuses and other entitlements

Employers can conduct background checks on prospective employees. However, these checks must be limited to information such as:

  • Criminal background
  • Education
  • Employment history
  • Reference check
Working Hours

The standard work period in Canada is 40 hours a week or eight hours a day, over five days. Federally regulated employees are entitled to 24 hours of rest each week, which usually occurs on a Sunday. The work week is reduced by eight hours if a holiday occurs during the week. If an employee works more than the standard 40 hours in a work week, they are entitled to overtime pay. The maximum number of hours an employee can work in a week is 48. This can be exceeded in certain circumstances.

Sick Leave

Employees can take up to 17 weeks of unpaid medical leave. A medical certificate may be required for absences of three days or longer. Employees may be entitled to employment insurance benefits. The time off during this 17-week period does not include other types of leave. An employee can take up to five days of personal leave each calendar year. This includes three paid days after three months of employment.

Maternity/Paternity Leave

Female employees are entitled to 17 weeks of unpaid maternity leave. In some instances, the time off may be longer depending on the length of employment. While the leave is unpaid, employees may be eligible for employee insurance benefits. Canada’s employment insurance program provides up to 15 weeks of maternity benefits. Employees also receive up to 63 weeks of unpaid parental leave, or 71 weeks if the leave is shared between parents. The leave may be taken within the 78-week period from the date of birth or the date the child is adopted. While parental leave is not paid, as with maternity leave, employees may be eligible for employee insurance benefits. Employees in Quebec are eligible for maternity, paternity parent and adoption benefits under the Quebec Parental Insurance Program, so different rules and eligibility requirements may apply.

Compensation

The minimum wage in Canada is set as the National Minimum Wage, however the minimum wage varies depending on the province, age and industry. In general, the applicable minimum wages are (in Canadian dollars, or CAD). Bonus payments are not required in Canada, but employers may choose to pay them.

Vacation Leave

In addition to public holidays, an employee can take two weeks of leave after 12 months of employment. After five consecutive years of employment, employees are entitled to three weeks of paid vacation leave. After 10 years of consecutive employment, employees are entitled to four weeks of vacation leave.

Public Holidays
  • New Year’s Day
  • Good Friday
  • Saint-Jean-Baptiste Day (Quebec only)
  • Canada Day
  • Civic Holiday (Except in Quebec and Yukon)
  • Labor DayThanksgiving
  • Remembrance Day
  • Christmas Day
  • Boxing Day
Health Insurance Benefits

Canada has a universal healthcare system. It is also common for employers to offer supplemental insurance.

Employment / Termination / Severance

Employers must provide employees two weeks’ written notice of termination. Employers can elect to pay two weeks wages in lieu of notice. The notice period is not required if:

  • The employee has not completed three consecutive months of employment
  • The employee resigns
  • The employee is dismissed for misconduct connected to their work
  • It is the end of a contracted position

Employees who have worked for their employer for at least five years are entitled to severance pay. Employees with at least 12 months of continuous service generally receive one week's pay for each year of service up to 26 weeks. However, the total amount of severance can depend on several factors including, but not limited to, the employment agreement, any applicable bargaining agreements and provincial laws.

Local Laws & Regulations

We understand that local laws and regulations change and sourcing an accurate reference guide is not easy. Our data is researched and verified by our team of local international Employment Attorneys, HR and Benefit Professionals and Tax Accountants through our Atlas team and consultants, to ensure information up-to-date and accurate.

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Partner with Atlas

Partnering with Atlas when expanding into Canada, can dramatically reduce the standard brick and mortar processes of doing business in foreign markets and allow you to focus on what you do best, growing your company! To discover more about how Atlas can simplify your ability to expand globally, please feel free to contact us.
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