If your business or recruitment agency is already familiar with engaging workers in the US, your expansion into Canada might feel like a natural next step. However, while the two markets may seem similar at first glance, Canada has its own unique employment laws, provincial requirements and compliance considerations that employers may not be aware of. From overtime and termination notice to leave entitlements and minimum wage, understanding these differences is essential before hiring or placing workers in Canada.
What are the Challenges when Employing Workers in Canada?
1. Overtime Exemptions
In the majority of provinces in Canada, the overtime rate is 1.5 times the employee’s standard compensation. This is usually paid after an employee works more than eight hours per day or 40 hours per week. You also must be aware of exceptions that can be based on location, position, and payment structure.
2. Termination of Employment
In Canada, employment is not ‘at-will’ like it is in the U.S. Instead, Canadian employers must provide notice before actioning terminations. The required termination notice in Canada varies between provinces. Most provinces in Canada apply approximately one week per year of service to a maximum of eight weeks in the case of only a single employee. Larger lay-offs trigger significantly higher notice requirements.
3. Minimum Wage
There is no national minimum wage in Canada, it depends on the province you operate in. Labour costs in Canada are increasing due to recent minimum wage legislation. According to the Ontario Ministry of Labour Guide, the minimum pay rate wage is $17.60 per hour and is due to rise to $17.95 in October 2026. It is important to do your research before hiring workers in Canada to work out your labour costs.
4. Paid Leave
In comparison to their neighbours in the US, Canadian workers expect a more generous leave allowance which is important to keep in mind if you are already engaging workers in the US and want to expand in Canada.
What leave are parents entitled to in Canada?
In the US, paid maternity leave is not mandatory at a federal level. In Canada, the government offers paid leave for parents via Canada’s employment insurance plan. This enables mothers to take up to 15 weeks of paid maternity leave.
What vacation leave are Canadian workers entitled to?
Workers in Canada are entitled to two weeks of paid vacation leave, which is usually the norm for most businesses. However, provinces that host a lot of big businesses can demand an additional week or two for longer-serving employees as an incentive. Businesses in the US, on the other hand, do not have to offer paid vacation to their workers and it is at the employer’s discretion whether this is offered or not.
Not all public holidays are mandatory in Canada and the US, for many it is up to the discretion of the employer.
Leave of Absence
When employing workers in Canada, there are generally two types of leaves of absence which are particularly surprising to US employers.
This requires an employer to provide each employee with 10 days off from work due to a personal emergency or an emergency of a close family member. The first two days must be fully paid by the employer.
This allows statutory job protection extending up to 104 weeks following the death of a child and 52 weeks if a child goes missing under crime-related circumstances
Ontario’s Employment Standards Act includes a list of 12 different types of leaves of absence that employees are entitled to, at a minimum. The list includes Family Caregiver Leave, Critical Illness Leave, and Domestic or Sexual Violence Leave. You must be aware of these employment acts before operating in Canada and undertake research.
Seek Help from a Canadian Employment Expert Before Expanding
Canada's HR practices can be difficult to navigate if you are attempting to employ workers in Canada. We suggest that you seek professional help from Canadian employment experts before entering the market to ensure you remain compliant.
We have been experts in the Canadian employment industry for 25+ years. Using an Employer of Record like Workwell Global will assure your business is compliant with all current and upcoming compliance issues in Canada.