Benefits to offer employees in Canada
by Preston on 2020-10-07
Canada’s provinces and territories have a variety of differences in employment law, but statutory benefits remain mostly consistent across the country. Quebec can be an outlier in certain areas, but for the most part, employers of Canadian workers can prepare a standard benefits package that will be compliant throughout the country.
Our guide on hiring in Canada provides a thorough look at the labor laws and regulations that apply to Canadian workers. Let’s take a closer look at which benefits to offer remote workers in Canada.
Who is entitled to benefits in Canada?
All full-time employees in Canada are guaranteed certain benefits. While Canada does allow probationary periods during which employers can terminate employees without cause, workers in Canada generally enjoy more rights and protections than workers in the US.
Importantly, Canada does not practice the concept of at-will employment in general. Probationary periods provide trial periods for employers to “feel out” the fit of an employee, but beyond probationary periods, employers must have at least one valid reason to end an employment relationship.
Statutory and common employee benefits in Canada
Paid time off
Canadian employees are guaranteed different amounts of paid time off depending on the province or territory in which they live.
Canadian federal law mandates a minimum two weeks’ paid time off per year for employees with at least one year of employment. After five years of employment, the minimum increases to three weeks. After 10 years, the minimum reaches its highest point of four weeks.
Canadian provinces sometimes enforce minimums on the percentage of pay given to employees during their time off. Under Quebec law, employees who have worked at least three consecutive years are guaranteed three weeks of vacation paid out at the value of 6% of their annual pay.
Canadian employers may offer unlimited PTO as long as their employees take at least the minimum.
Canada Pension Plan and Quebec Pension Plan
Employers and employees collectively contribute to a statutory pension plan called the Canada Pension Plan. In Quebec, companies and their workers contribute to the Quebec Pension Plan instead.
In 2020, employers and employees both pay 5.25% of the employee’s salary to the CPP, making the total contributions from both parties equal to 10.5% of the employee’s total salary. These contributions only apply to salaries between CAD $3,500 and $58,700.
Workers who earn more than $58,700 cannot contribute more than the maximum to the CPP. Companies also cannot contribute more on behalf of their employees. Each side is required to contribute 5.25% of wages up to the max.
The QPP follows the same rules but with different rates. In 2020, Quebec employees and employers both contribute 5.4% of the employee salary, totaling 10.8% in contributions between the two.
Both the CPP and the QPP pay out pensions to eligible recipients over the age of 60. Anyone who has made contributions to the plan for any length of time may be eligible, as there is no minimum contribution amount required to receive benefits. However, people who contribute more over a longer period of time receive larger payments.
Minimum wage and overtime pay
Canada’s minimum wages vary from one province to another. In 2020, Saskatchewan has the lowest minimum wage of CAD $11.45. You can find current minimum wages in Canada here.
Overtime rates also vary by location. Some regions of Canada require employers to pay overtime rates for hours worked after eight hours in a day or 40 hours per week. Others increase the limits to 48 hours per week. While most provinces mandate overtime pay at 150% regular wages, some increase overtime rates to 200% depending on the number of overtime hours worked.
Employers in Canada should be aware that salaried exempt employees may still be eligible for overtime pay. While some provinces exclude certain professions from mandatory overtime, like doctors, lawyers, and managers, rules vary by location.
Flexible working hours
Workers in Canada are guaranteed the right to request new working hours after six months of continuous employment with a company. Employers have broad authority to refuse these requests, but employees can push the issue if flexible hours would help their work-life balance and their job duties would not be affected by the change.
In addition to paid time off, employees in Canada are entitled to personal leave after they have worked in the same position for three consecutive months. Employers must pay for this leave, but only for the first three days.
Personal leave allows employees to take time off for important tasks, like caring for a sick family member. Employers may not punish employees for using the full amount of their personal leave.
Family violence leave
Canada is one of a few nations that offers additional protections for victims of family and domestic violence. Under Canadian law, employees who take leave because of family violence receive 10 days of protected leave, and employers must pay for five of those days. Employees who are accused of perpetrating family violence are not eligible for family violence leave.
Canadian employees are eligible for up to 17 weeks of unpaid leave for medical issues related to illness, injury, organ donation, tissue donation, or medical appointment attendance, including hospital stays. For illnesses lasting three days or longer, employers may require documentation from a healthcare practitioner confirming the circumstances prevented the employee from working.
Employers may reassign employees returning from medical leave to new positions when employees are unable to perform the duties their old positions required.
Leave for COVID-19
Canada offers two forms of protected unpaid leave related to the COVID-19 pandemic.
The first type of leave is for two weeks and protects employees who have been exposed to the virus and need to quarantine as well as employees who contract the virus but suffer only mild symptoms.
The second type of protected leave can last up to 26 weeks for employees who must provide care for a child, elderly relative, or other family member who requires additional care but cannot receive that care because circumstances prevent them from retaining access to their usual care providers.
Both types of leave are set to expire on September 21, 2021.
Compassionate care leave
Employees may take up to 28 weeks of protected unpaid leave within a 52-week period to care for a family member with a serious illness that includes a significant risk of death, as determined by a medical professional. The leave can begin when a healthcare practitioner records the diagnosis on a medical certificate or first examines the critically ill person, or the leave can begin the week the family member falls ill. The leave ends when the illness ends, the person suffering the illness dies, or the 52-week period expires.
Critical illness leave
Similar to compassionate care leave, employees who have children or family members suffering from a critical illness may take leave to support the ill person. Protected leave extends to 37 weeks for employees caring for a sick child and 17 weeks for employees caring for a sick adult.
If two or more children suffer a critical illness, the employee is eligible for separate 37-week leave periods for each sick child.
Leave for the disappearance of a child
Canadian law provides 52 weeks of unpaid protected leave for parents of missing children. This leave increases to 104 weeks of leave if the child is discovered to be deceased, beginning on the date of the death. People eligible for this leave include parents, adoptive parents, guardians, and caregivers responsible for children between phases of adoption.
Employees are not eligible to take this leave if they are charged with a crime related to the disappearance or if the child is suspected to be party to a crime related to their own disappearance.
Leave for legal proceedings
Employees in Canada are entitled to unpaid leave when summoned for jury duty or as a witness in a trial. This leave does not apply to employees who are parties in lawsuits as plaintiffs or defendants.
Employees in Canada are entitled to receive pay for certain public holidays. Covered holidays vary by province.
In the past, employers could deny holiday pay to workers with less than 30 days of employment time. That law has changed. Today, employees are eligible for holiday pay from their first day on the job.
Maternity and parental leave
Canada guarantees a minimum of 15 weeks’ maternity leave to all employees who give birth. Some provinces mandate more maternity leave, but 15 weeks is the minimum across the country.
Parents in Canada are also entitled to a minimum of 27 weeks of shared parental leave, regardless of gender. Some provinces increase parental leave to 35 weeks.
New parents can use this leave whenever they like, consecutively or separately, as long as they use it within one year of the birth of the child.
Employers do not have to pay employees for maternity and parental leave. Employees receive pay on their leave from government programs funded by taxes and social contributions. Parents who take leave receive either CAD $547 per week or 55% of their regular income, whichever is lower. In Quebec, payments are substantially higher at $900 per week.
Employers may choose to pay employees during leave if they desire.
Employees who are pregnant or nursing may request modification of their current duties or reassignment to new roles if continuing in their current roles could pose a health risk to themselves or their children, born or unborn. All requests for reassignment must include documented confirmation from a healthcare practitioner about the necessity of the request. This documentation must be specific about which duties the employee may not continue to perform and for how long.
Employees are entitled to paid leave while their employers consider their requests for reassignment. Where reassignment is not practical or achievable, employees are entitled to unpaid protected leave for the duration of the condition that makes continued employment in the role unfeasible.
Aboriginal employee leave
Aboriginal employees in Canada receive a statutory five days of leave per year to participate in Aboriginal customs and attend Aboriginal events. Employees of Aboriginal descent may use this time for hunting, fishing, traditional ceremonies, or other purposes related to their Aboriginal heritage. Leave for Aboriginal heritage purposes is not guaranteed to be paid leave.
When an employee’s immediate family member passes away, federal law provides the employee with a minimum of five days of bereavement leave. As is the case with personal leave, employees may take five days of leave, but employers are only required to pay for three. These minimums apply after employees have been with the employer for at least three consecutive months.
Private health insurance
Employers in Canada often offer private health insurance plans to attract top talent, even though Canada does provide public healthcare to all residents. Private health insurance premiums tend to be smaller than those in the US, and Canadians with private insurance get access to a wider variety of healthcare facilities and potential treatments. Employers can also offer vision and dental insurance, although these benefits are not required by law.
Long-term disability insurance
Employers may offer private long-term disability insurance to protect employees from the possibility of loss of income due to permanent disability. These plans are separate from other forms of health insurance and government-provided protections.
Health care spending accounts
Like HSAs in the US, health care spending accounts (or HCSAs) allow employees in Canada to spend tax-free money on medical expenses. Employers can offer HCSAs to employees as an additional perk.
Retirement savings accounts
While the CPP and QPP cover all Canadian employees, some employers in Canada offer additional retirement savings vehicles to attract top talent. The most common form of employer-sponsored retirement contribution in Canada is the RRSP, Registered Retirement Savings Plan. These plans work similarly to employer-matched contribution accounts in the US.
In 2020, the RRSP contribution limit was CAD $27,230. In 2021, the limit increases to CAD $27,830.
Offer your employees in Canada better benefits with Remote
As the expert on global employment, Remote helps companies of all sizes provide first-class benefits packages to workers in Canada. We can help your company provide a variety of packages to attract top talent while remaining compliant with all applicable federal and provincial laws. Contact us today at [email protected] to learn more about our Canada global employment and employer of record solutions.