North America

What is a Canada Employer of Record?

By August 19, 2019 No Comments
Toronto, Canada view from the water

Canada is one of the most-promising markets for companies looking to expand overseas—or north of the border in the case of U.S. companies. It brings with it a host of unique opportunities unavailable elsewhere; not only does Canada have an absolutely booming technology sector and one of the world’s top economies, but immigration policies designed to support each. The Canadian government has long implemented steps to get foreign high-tech workers into the country as quickly as possible, through techniques like the Global Skills Strategy.

Not only is Canada’s Information and Communications sector (also known as the ICT sector) worth approximately $74 billion, but it also employs more than 655,000 people. That number is expected to increase by an additional 218,000 jobs by as soon as 2020, making Canada one of the globe’s top countries for premier tech talent—and underscores the importance of working with a Canada Employer of Record.

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Hiring in Canada: Opportunities and Considerations

Generally speaking, organizations that are expanding into Canada have a number of distinct options available to them when it comes to hiring. In addition to finding and retaining top local talent on an employer/employee basis, one popular (if risky) option is working with independent contractors.

The obvious benefit of this is that employers get to bring in highly-skilled and otherwise specialized employees to perform work on a job-by-job basis.

This, of course, also brings with it the danger of potential misclassification. If an employer misclassifies an employee as an independent contractor, it not only breeds compliance issues but also potential fines, violations and potentially irreparable reputational damage.

But at the same time, it’s actually very easy to accidentally misclassify an employee; a considerable amount of due diligence is required, which can be problematic when a firm is devoting so much of its attention on making sure that its Canadian expansion goes as smoothly as possible.

Employer of Record in Canada: Avoiding Misclassified Contractor Risks

For many businesses, one of the best ways to avoid these types of risks entirely means partnering with someone like an International Professional Employer Organization (PEO), who act as a company’s Employer of Record in Canada.

With an International PEO, firms enlist the help of a trusted company that can utilize its existing global infrastructure to help hire top talent anywhere in the world—including in Canada. Locally-compliant employment contracts are used to hire those employees, and the International PEO becomes their legal Employer of Record, not the firm that hired the IPEO.

Partnering with an International PEO guarantees that the workers will meet all local employment regulations, eliminating the risk of misclassification. The employer maintains a normal working relationship with the employee and, most importantly, still maintains all day-to-day control over their company. Additionally, the International PEO can handle all compliance-related matters, including payroll and benefits.

Hire the Brightest Talent for Your Canadian Expansion

If you’re looking for a compliant, streamlined method to employ top talent to lead your Canadian expansion, reach out to Velocity Global today. Our International PEO solution has helped hundreds of firms break into markets across the globe. And, with capabilities in more than 185 countries, we can help you establish your presence in Canada—and virtually anywhere else.

If you’d like to find out more information about what an Employer of Record in Canada is, or if you have questions about how International PEO can help you achieve your global expansion goals, contact Velocity Global today.