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Canadian Employment Issues
DISCLAIMER - The information provided here is of a general nature and may not apply to any specific or particular situation. It is not to be considered as a legal advice nor presumed to be indefinitely up to date.
At some point in the growth of the business, entrepreneurs will have to hire and terminate employees.
Employment in Canada is heavily regulated, governed by either federal or provincial legislation. Most employers are
covered by provincial legislation. Federal employment laws apply only to industries within the federal government's
jurisdiction. Those include banks, shipping, railways, airlines, interprovincial or international trucking, broadcasting,
and telecommunications. The employment relationship is subject to a number of Federal and provincial employment laws that
provide minimum standards with respect to such issues as minimum wage, maximum hours of work, overtime pay, maternity
leave, holidays, and severance pay. Employers are prohibited from contracting out of those minimum standards. Start-ups
need to comply with these regulations and balance the company's needs with the rights of employees.
1. Government Sponsored Plans
Health Insurance
All provinces provide comprehensive schemes for
health insurance. The plans provide for necessary medical treatment,
including doctors' bills and hospital stays. They don't replace private
disability or life insurance coverage. The provincial health
insurance plans vary in how their revenues are collected. In some
provinces, employers must pay premiums, while in others, individuals pay
premiums. In some provinces, the entire cost of health insurance is paid
for from general tax revenues.
Employment Insurance
Employees and employers both must contribute to the federal Employment Insurance Plan. It provides benefits to
insured employees who lose their jobs. It also provides income replacement benefits when employees take a maternity
or parental leave.
Canada Pension Plan
This federal plan provides pensions for employees as well as survivors'
benefits for dependent children and spouses of deceased employees. All
employees and employers, except in the province of Quebec, must contribute
to the plan. The province of Quebec has a similar pension plan that also
requires joint contributions.
2. Anti-Discrimination Laws
Start-up companies should proceed cautiously during the hiring and screening process.
Canada has pro-active employment and pay equity laws aimed at effectively redressing the substantial inequalities facing
women, racial minorities, persons with disabilities, and aboriginal peoples. The
federal government and each province have
passed statutes that restrict employers' ability to discriminate among employees based upon race, sex, religion, national
origin, age, or physical disabilities. The main thrust of Canada's proactive equity laws has been to require employers and
trade unions to jointly take pro-active steps to identify and redress systemic discrimination in recruitment, treatment,
compensation, promotion, and retention of employees who have been historically disadvantaged in the workplace.
The federal government also requires that individuals receive equal pay for equal work regardless of their sex. In
determining the meaning of "equal pay" and "equal work," courts consider such factors as seniority,
merit, and quality or quantity of work as legitimate factors in compensating people of different sexes differently.
Canada's pay equity laws all apply to the public sector and almost all also apply
to the broader public sector and crown corporations. Legislation in
Ontario, Quebec and in the federal jurisdiction applies to much of the
private sector as well. Most require comparisons between male- and
female-dominated occupations defined as those in which one sex holds
either sixty or seventy percent of the jobs. All define value in terms of
skill, effort, responsibility, and working conditions. In several
jurisdictions, the method of comparison is not prescribed, although the
call for job comparisons that are free of gender bias is found in several
jurisdictions.
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