Top 4 mistakes US employers make when expanding into Canada
With the hot Toronto tech skills market and the favourable dollar exchange, US employers are increasingly looking north of the border to expand for new business and for new talent. Here are four common mistakes US employers will want to avoid:
1) Employment laws
While we continue to have more in common than not, there are many subtle differences between US and Canadian workplace laws. In Canada, about 90% of the workforce is governed by provincial law, not federal, so identifying what applies to your Canadian employees scattered across the country is not always straightforward. The best approach is to not assume the laws will be the same as US laws, even if we do speak a shared language and all watch the same American TV shows.
Expectations of privacy are ingrained in our legislation and case law. This is a fundamental difference between the two countries – employees do have an expectation of privacy in Canada that cannot be eliminated through employer policies.
3) IP laws
Whether an employee by default retains rights to their inventions differs between the two countries (and we’d refer you to great IP lawyers who know way more than we do about this). Ownership of workplace content intersects with our privacy laws that give employees a default right to privacy. For example, content developed on a personal device that is then incorporated into workplace product will no doubt invite debate over who owns what.
4) Employee terminations
We have no at-will employment in Canada. Every employment relationship is governed by a contract, whether express or implied. The employment standards legislation will require a minimum amount of notice or pay in lieu of notice to any employee dismissed without cause (e.g. business restructuring, redundancy, mild incompetence – anything short of willful misconduct and very bad behaviour). The common law (courts) will generally award well above the statutory minimums, taking into account various factors of the individual that may necessitate a greater cushion to the next position. It is very expensive to get this wrong in Canada. Employees are well versed in their employment rights and will not hesitate to go to an employment lawyer to have their termination package reviewed.
While there are far more great reasons to do business in Canada, the subtle differences can be costly if not navigated carefully.
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