French companies are actively seeking global talent to address workforce shortages, and Canada has emerged as a key target market! However, when it comes to hiring in Canada, French companies often face two key concerns: unfamiliarity with local employment and tax regulations, and uncertainty about the legality of hiring. Let’s address the latter right away: hiring in Canada is indeed legal. In this blog, we’ll equip French companies with essential knowledge about the Canadian system and offer practical tips to kickstart their hiring endeavors in the country.
Why Hire in Canada?
The Canadian market is the perfect fit for French companies looking to hire highly skilled remote employees. Canada has a highly educated, diverse, and multi-lingual workforce hungry for new opportunities and international experience. The country’s low employer taxes and lack of regulatory barriers to international hiring make it easy for foreign companies to build international teams. Its six time zones make it a great fit for customer service, off hours, or asynchronous teams.
As a former French colony, the province of Quebec has many cultural similarities to France. Quebec and its neighboring provinces of Ontario and New Brunswick, have large Francophone and French-speaking populations used to working with international teams.
How to Hire in Canada?
French companies have two options when they decide to hire in Canada: open a local subsidiary or hire through an Employer of Record (EOR). Both these paths allow foreign companies to hire long-term employees in Canada, but it is important to understand how they’re different.
- Hire Through a Subsidiary: French companies hiring in Canada can opt to open a local subsidiary and hire employees directly. This requires incorporating in Canada, registering to pay taxes and process payroll, creating locally compliant contracts, and then hiring and onboarding.
- Hire Through an Employer of Record: Instead, many companies opt to outsource hiring to an Employer of Record. They hire employees on your behalf, onboard them, and handle ongoing payroll and human resources support.
Timeline to Hire in Canada
| Open a Subsidiary | Partner with an EOR | |
|---|---|---|
| Incorporate | At least two months before start date | NA |
| Open Bank Account | At least two months before start date | NA |
| Apply for Tax / Business Number | At least two months before start date | NA |
| Configure Payroll | At least one month before start date | NA |
| Create Compliant Contracts | At least one month before start date | NA |
| Extend Offer | At least two weeks before start date | At least two weeks before start date |
| Onboarding | Week of start date | Week of start date |
What is an Employer of Record?
Employers of Record hire workers on behalf of other companies, taking on the administrative aspects of employment, including payroll including taxes and deductions, managing benefits and retirement plans, and providing mandatory training. Because EORs hire employees and lease them to you through a service agreement, you can hire worldwide without opening local subsidiaries or tax accounts. This makes EORs the best option for French companies hiring one or just a few Canadian employees.
Employers of Record provide a similar, but different, service to French Portage Salarial. We broke down the differences in detail here. They provide:
- Compliant local contracts
- Advice on total compensation
- Ongoing payroll including tax forms, deductions, contributions
- Ongoing human resources support, including advice on discipline, promotions, and more
- Worker’s compensation administration
- Health insurance and life insurance for your hires
- Retirement savings programs
- Employee perks
EORs like Canadian Payroll Services allow you hire quickly and compliantly, without creating new corporate infrastructure and they continue to support you with human resources and employment law resources.
How Do Canadian and French Systems Compare?
The Canadian and French legal systems are different – but much of the Canadian system will be familiar to French business leaders! Canada is a parliamentary federation with legislative and regulatory powers shared between the federal and provincial governments.
- Federal Government: Taxation and national social safety net, defence, most transportation and trade, telecommunications, banking, criminal law, copyrights and patents, federal employment law
- Provincial Governments: Taxation, healthcare, education, municipalities, natural resources, and employment law
Except for Quebec, Canada’s legal framework is based in common law while France is based in civil law. When the former French colony of Quebec joined Canada, it retained its civil law system which remains in place to this day.
Employers in Canada make national and provincial tax contributions and operate within a combination of national and provincial laws. When it comes to everyday employment law, though, treatment of employers is governed by either national or provincial law.
Most jobs in Canada are regulated under provincial employment law. The exceptions are jobs in federally regulated sectors, including banking, air or rail transportation and shipping, telecommunications, tv and radio broadcasting, and more.
French vs Canadian Employment Laws
While France and Canada have different systems, the day-to-day difference in employment law and practice isn’t as big as you would expect. French and Canadian employers make similar tax contributions and have similar responsibilities to their employees. The biggest difference is often in implementation.
The most important thing French employers should keep in mind is that Canadian employment law is provincial. All provinces have similar legislation, outlining:
- Minimum and overtime wages
- Hours of work per week before overtime
- Minimum paid vacation time
- Minimum unpaid sick days
- Discipline and termination rules
- Maternity and parental leave
The differences in these rules are minor, but not unimportant. Once you are familiar with the employment law of one province, you will have an easy time understanding the rules in another province – but you cannot apply the rules from one province to employees from another.
Quick Guide to Canadian vs French Employment Law Differences
Items with a * are provincially regulated. We provide an average in this table.
| Canada | France | |
|---|---|---|
| Minimum Wage | Average of $16.66 CAD* | €10.25 |
| Hours per Week | Average of 40* | 35 |
| Income Tax | Applied to every pay; employer deducts and remits | Applied to every pay; employer deducts and remits |
| Social Safety Net Contributions | Employees and employers make contributions; employers deduct and remit | Employees and employers make contributions; employers deduct and remit |
| Paid Vacation | Average of one week to start, increasing with years of service; employers may offer more* | Minimum of five weeks; 12 days must be taken between May 1 and August 31 |
| Unpaid Sick Days | Average of 3* | None |
| Sick Leave | Wage replacement by Employment Insurance of 55% of your earnings up to a maximum of $668 per week | Wage replacement provided by CPAM or MSA of 50% of your earnings up to a maximum of €50.58 per hour |
| Maternity Leave | 16 weeks | 16 weeks (6 pre-natal) |
| Paternity Leave | Part of parental leave | 28 days |
| Parental Leave | 61 weeks | Average of 1 year |
| Paid Public Holidays | Average of 10* | One, employer may offer more |
| Severance Pay | Optional in all provinces except Ontario | One week, up to ten years of service |
Key Differences in Canadian Employment Law
- Collective Bargaining: Unions and guilds are less common in Canada. Participation is mandatory only in union shops, so there are no sector-wide unions. French companies hiring in Canada are unlikely to encounter a union.
- Electronic Monitoring: Ontario requires all employers with 25 or more employees to have an electronic Monitoring policy that lays out what information they collect on employees, how they collect it, and how they store it.
- Right to Disconnect: So far only Ontario has implemented a Right to Disconnect. The province requires employers with 25 or more employees to have a written Right to Disconnect policy that meets or exceeds the Employment Standards Act on file.
- Language of Employment: Quebec has many language laws pertaining to employment. Even if your Canadian hire prefers to communicate in English, you must provide their contract an onboarding documents in French and English. Ensure you have recorded their preferred language in their file!
- Reduction of Working Time Agreement: Unlike in France where employees can collectively agree to work overtime in exchange for additional time off, Canadian employees cannot waive overtime pay. They can arrange to work holidays in exchange for future time off, on an ad hoc basis.
As you can see, French and Canadian employment laws have more in common than they don’t — but it still pays to be careful when operating outside of your home country. That’s why so many French companies rely on an Employer of Record when hiring in Canada.
Canadian vs French Employment Benefits
Just like in France, Canadian employees receive a combination of mandatory and optional employment benefits. All Canadian employers and employees make contributions to the national Canada Pension Plan and national Employment Insurance scheme. Employers also pay insurance premiums to provincial Worker’s Compensation boards, and in some provinces pay Health Tax.
- Canada Pension Plan (CPP): All working Canadians make contributions and can begin receiving benefits at 65 (or 60 if you retire early). Employers make contributions every payroll and are responsible for deducting and remitting on behalf of their employees.
- Employment Insurance (EI): The national wage replacement scheme for unemployment, sickness, disability, pregnancy, adoption, caregiving, and more. Contributions are not broken down by EI program.
- Health Tax: Some provinces levy an employer tax to help fund their provincial healthcare system.
Unlike in France, Canadian employers are not required to provide health insurance (mutuelle) or life insurance. However, most employers offer comprehensive health and wellness packages to their employees, as a competitive advantage over other employers. Canadian health insurance plans are designed by employers, in concert with insurance providers, and offer limited choice or customization to employees.
Employer provided benefits usually include drug, dental, eyecare and paramedical coverage. Employees may be required to pay health or life insurance premiums, depending on the employer plan’s design.
| Canada | France | |||
|---|---|---|---|---|
| Employee | Employer | Employee | Employer | |
| National Pension Plan | ✔ | ✔ | ✔ | ✔ |
| Employer Pension | Optional | Optional | ✔ | |
| Employment Insurance | ✔ | ✔ | ✔ | |
| Healthcare Tax | Depends on province | ✔ | ||
| Health Insurance | Depends on plan design | Optional | ✔ | |
| Life Insurance | Optional | ✔ | ||
| Worker’s Compensation | ✔ | ✔ | ||
How Canadian Payroll Services Can Help
Canadian Payroll Services is an Employer of Record with a specialized focus on the Canadian market. We help you hire employees in every province and keep you compliant while doing so. As an EOR, we take the burden of payroll, HR, and employment administration off your hands, so you can focus on what’s most important: your business and your people.
Want to learn more about how we can help? Get in touch!
