The Employer-Employee-PEO Relationship
If you and your US-based employer are considering using a PEO agency like Canadian Payroll Services to facilitate your payroll and benefits and other administrivia that works a bit differently in Canada, you might be wondering what will make your relationship to your employer different from a regular employer-employee relationship.
When you work through a Professional Employment Agency (PEO), the agency becomes your Employer of Record (EoR). The US-based employer becomes the PEO agency’s client, and the agency places you to work for the US company. You are assigned to perform work for the US company, but your official EoR and the one who sends you your paycheque is now the PEO agency.
Part of what this means is that you are no longer covered by US employment standards that govern your US employer, but instead, you are covered by the Canadian employment standards that govern the province where you are employed.
Who do I tell people I work for?
Let’s use the example of someone working remotely from Canada in a sales position for a US company – do you call yourself an employee of that company or someone contracted by a third party (the PEO agency)? To most of the US company’s clients and sales prospects, this is a finer point of detail that they likely won’t care about. You can disclose that you are a contractor and not a direct employee since you are a Canadian resident and the US company isn’t set up to be an employer in Canada, you cannot have a direct employer-employee relationship.
What if I’m asked to spend time working in the States?
Even if you are performing work for a US company, the PEO remains your Employer of Record, and without a US work visa, you are not permitted to work on American soil. It’s important to understand that you cannot work out of the US company’s facilities or those of their US-based clients.
You can visit the the US for meetings, conferences, and to attend training seminars, but not to work. Generally speaking, such meetings or events shouldn’t take place more than once a month, and shouldn’t last more than a week in duration.