Now that you’ve hired that first new employee in Canada, there are several steps in the actual hiring process you need to complete to be compliant with Canada Revenue Agency, Service Canada, provincial Employment Standards and provincial Workplace Safety and Insurance board. Plus you will want to set them up for success with a welcoming and productive onboarding program. This article digs into how to prepare for the all important employee number one, from payroll accounts to culture setting.
Haven’t hired them yet? Refer to our 7 Ways to Source Employees article to learn best practices in Canada.
A few questions to resolve first:
Are your employees under Federal or Provincial labour standards? If you are a federally regulated industry, such as banks, broadcasting or cross-provincial boarder transport, then you follow the Canada Labour Code. If not, then you are provincially regulated and follow the employment standards locally.
Are you hiring employees or independent contractors? Refer to our Employee or Contractor article to learn the difference.
Will you use a payroll service or process and remit payments directly? Even for a one-employee operation, it may be easier to use a SaaS online type service. You will need to calculate provincial and federal taxes, Employment Insurance premiums by you and the employee, Canada Pension Plan payments by you and the employee, vacation accrual, taxable benefits and actual wages earned. You then remit these payments to the government and pay the employee or if using a service, they will invoice you the full amount and make the various payments on your behalf.
Will you offer any benefits such as extended health, dental, vision care, and various insurances like life, short and long term disability and accidental death and dismemberment? If so, get this setup in advance (BrightGo can refer you to a local broker if you need) so you know what to budget, deductions to make on their payroll and of course to let potential hires know - it can be a must-have for some employees and a good plan will differentiate you from the competition.
Now that those decisions are figured out, there are a few more steps before they can work for you:
Setup a Payroll Account via Canada Revenue Agency - it is an extension of your Business Number
Setup a provincial Workplace Safety and Insurance board account. Premiums will be based on actual payroll paid plus your industry rating (how many claims are typical). The account typically needs to be setup within 10 days of them starting (but do check your provincial board as this may vary depending on the industry and role).
Find the appropriate personal tax forms for your new employee. They will include a TD1 Federal and a TD1 provincial. They also need to be updated each year.
Confirm your new employee’s eligibility to work in Canada:
Within 3 days of them starting (best to ask them to just bring this in for their first day), they need to provide you their confirmation of Social Insurance Number (SIN) letter, their SIN card or other documentation showing their SIN (e.g. tax return) AND some ID with their full name and photo (e.g. passport, driver licence). Take a copy of both.
If the SIN starts with 9, they also need to provide a copy of their work permit to work Canada
You then confirm the SIN by contacting Service Canada at 1-800-206-7218 (select option "3"). You will need to provide your business number issued by Canada Revenue Agency, along with necessary information to verify the identity of your company as well as the employee.
Collect some personal info via form or email (best to ask them at least annually if there are any changes):
Have them provide you their full name, mailing address, phone number, and email for themselves plus 1-2 emergency contacts
On this same form or email, ask if they have any "medical conditions to be aware of (optional)".
This is a just-in-case type doc - hopefully you never need to access it but if you do make sure it is handy - this is where having it stored electronically is better than just in a filing cabinet. (e.g. they go AWOL, have a medical emergency or there is a natural disaster)
Have them bring in a void cheque or the pre-authorized deposit (PAD) form from their bank. You will need this to be able to pay them.
The signed employment agreement, tax forms, SIN/ID, personal info, payment documents and applicable benefits enrollment forms can all be sent in advance of their first day so they can complete them in the comfort of home (plus some benefits forms may need spouse signature). This also ensures day 1 isn’t spent filling out forms. The employee forms related to taxes all need to be kept in in a secure location for 7 years (same as your other business records), the other employee related documents need to be stored for 2 years after their last day worked. These can either be scanned and stored in encrypted computer system (password protected) and/or under lock and key (in Canada or with permission from CRA outside of Canada).
You may also want to:
Review our Onboarding Employees article for tips on getting that first day and beyond right
Have a set of intro/welcome emails ready to go to send to any suppliers, customers, and contacts they will need introductions to.
Have their computer, email account and logins all setup - all the usernames and passwords in one spot
If their email account is setup in advance, you can start forwarding and emailing them stuff as you think of it and they then have material to go through and work on right away
If they have a set desk, have some things like a couple pens, sticky notes, notebook, water bottle/coffee mug, gift card for coffee shop nearby, and/or set of your products (for example if you are a consumer product like clothing or hair care) - a small welcome kit so they aren't stuck searching or having to bug you for little things plus it gives them the warm fuzzies
Plan a lunch together to have some social get to know you time
Have real work for them to do on day one - something they can actually complete that day other than training / setup so get a win and build confidence and momentum
The decision to hire an employee is never and easy one, but once you do, you want to make sure it is as smooth as possible for you and them. With the guide below you will be well on your way. But if you get stuck, want it outsourced or just don’t have the time (common story with entrepreneurs!), feel free to contact BrightGo Solutions for help. We even offer an Employee Number 1 package that includes all the setups plus employment agreement and policy handbook.