There are numerous basic topics to discuss with a newcomer, in preparation for seeking first-time employment in Canada. Familiarity with Canadian rights and obligations should help to establish proper expectations about the relationship with future employers and what to expect from government.
Social insurance number
A social insurance number (SIN) is a number issued in Canada to administer various government programs, including for income tax purposes. It is required from an employee whenever he or she is hired.
The Employment Insurance (EI) program provides temporary income support to unemployed workers while they look for employment or to upgrade their skills. The EI program also provides special benefits to workers who take time off work due to specific life events (illness; pregnancy; caring for a newborn or newly adopted child, a critically ill or injured person, or a family member who is seriously ill with a significant risk of death). Workers receive EI benefits only if they have paid premiums in the past year and meet qualifying and entitlement conditions.
Every pay remittance, an EI premium equal to 1.66% of earnings will be deducted from an employee’s pay, until the maximum premium for the year has been paid. For 2018, in Ontario, the maximum premium is $858.22. However, for someone earning a minimum wage of $14.00 per hour for a 37.5 hour week, the annual premium is only $453.
To be eligible to receive EI benefits, a claimant must have worked a minimum number of hours during the preceding 52 weeks and must meet certain other conditions. See the post, Eligibility for Employment Insurance (EI), on the Settlement.org website.
With very few exceptions, every person over the age of 18 (up to the age of 70) who works in Canada outside of Quebec and earns more than a minimum amount ($3,500 per year) must contribute to the Canada Pension Plan (CPP).
Every pay remittance, a CPP contribution equal to 4.95% of earnings will be deducted from an employee’s pay, until the maximum contribution for the year has been paid. For 2018, in Ontario, the maximum premium is $2,593.80. However, for someone earning a minimum wage of $14.00 per hour for a 37.5 hour week, the annual premium is only $1,351.35.
If, in becoming an employee, a newcomer becomes a member of a union, deductions may be made from his or her pay for union dues. Union dues are set by the bargaining agents and calculated either by using a fixed rate or as a percentage of the employee’s salary. Union dues paid by an employee are deductible in calculating taxable income in Canada,
Newcomers should be made aware that the frequency of pay schedules varies by employer and that it is not unusual for payment to be made in arrears, meaning that there could be a delay between the period to which pay relates and the pay date.
The Canada Revenue Agency has published a series of videos entitled, Newcomers to Canada and the Canadian Tax System, which could be helpful in explaining the Canadian income tax system to a newcomer. See also this video from Revenue Canada in Arabic: New to Canada. Learn About Taxes.
Employee vs independent contractor
Newcomers may need to be advised that there are advantages and disadvantages to working as an independent contractor, rather than as an employee. Factors to consider include income tax and HST liability and remittance obligations, employer health tax, CPP contributions, reporting requirements, entitlement to notice of termination, overtime pay, and EI benefits eligibility.
While in most cases, the difference between an employee and an independent contractor is clear, there are borderline situations, as well. The tests for determining the characterization of a working relationship are not always easy to apply and there has been considerable jurisprudence on the subject. Some businesses prefer not to treat their workers as employees. Those helping newcomers find the best work possible should discuss the implications of accepting a non-employment relationship.
For a discussion of an employee’s rights under the Employment Standards Act in Ontario, see Your guide to the Employment Standards Act on a Government of Ontario website.
Also, see What are my rights as a worker in Ontario? on the Settlement.org website, which covers:
- The hours to be worked;
- What the minimum wage is and how and entitlement for overtime pay;
- Public holidays;
- How much vacation time workers get and when you get vacation pay;
- Pregnancy and parental leave;
- Personal emergency leave (including sick days);
- Family medical leave, family caregiver leave, critically ill child care leave and crime-related child death or disappearance leave;
- Termination pay;
- Severance pay; and
- Filing a claim.
Termination within the first three months
In Ontario, an employee who is terminated by an employer within the first three months of employment is not entitled, by statute, to any minimum amount of notice or pay in lieu of notice. If it was formally agreed, at the time of hiring, that the first three months would be a period of probation, the employee likely has no further cause. However, if there was no agreement on this being a probation period, there could still be grounds for a human rights complaint and possibly, at common law, for pay in lieu of notice (which in most cases would not be very much.)
Hopefully, when a newcomer starts a new job, he or she will be satisfied with the employment and want to continue for an expected amount of time. Sometimes, however, unexpected circumstances arise or things do not work out, as planned and the employee must, or prefers to, end the employment . It is a good idea to discuss with a newcomer, before work even begins, how to quit a job in an acceptable manner. For an article on this topic, see the website of Settlement.org.