Woman in a work environment with computers in the background.

A Canadian permanent resident can  live in Canada and work for a US company.  There are options available that make it possible to do this without violating any employment standards or labor laws.

The first option would be for the permanent resident to become a self-employed independent contractor.  You would maintain a business to business relationship with the US company.  This is one of the ways that some companies would prefer to hire you, but, it creates some new challenges for you.  You would now have to register a business, make regular business filings, and remit taxes to revenue Canada.  You will most likely not get paid as often as an employee would expect to get paid if you are a supplier instead of an employee.

Another option is to work with a Canadian Professional Employer Organization (PEO) as an intermediary.  A PEO would hire you and be your Canadian employer of record.  The PEO would then assign you to work with the US company, that is now their client.  The US company would contract with and pay the PEO, for the work they hired you to do.  The PEO would then pay you as their employee.

As an employee of the PEO, you are now working for a Canadian company.  As the employee of a Canadian company, you are protected by Canadian labor laws and the Employment Standards Act in your province.  An independent contractor working for a foreign company is not considered an employee and has none of the protections under Canada’s labor laws.

Your Canadian employer is obligated to make all of the necessary income tax, Canadian Pension and Employment Insurance remittances on your behalf in addition to administrating any paid or unpaid leave you are entitled to in your province.  As your employer, they will also issue a T4 slip for you to file your income tax returns.
Any fees the Canadian PEO charges for their service should always be paid by the US company that wants to employ you.

Your status as a Permanent Resident will not affect whether you can operate as an independent contractor or be an employee of a Canadian PEO.

You may be expected to travel to the US, for meetings.  If you plan on making frequent visits to the United States to meet with the US company you are working with, you will need to get a B1/B2 visa, issued by the United States.  The B1/B2 visa permits you to make trips to the United States, similar to Canadian citizens, who can make trips to the United States for business meetings, trade conferences, and training purposes.  It is important to note that a B1/B2 visa is not a work visa and does not permit you to work in the United States.

When you visit the United States, be clear about the purpose of your visit.  If you state you are meeting your employer in the United States, you will probably be asked to provide a work visa and you will probably be turned away at the border if you don’t have a work visa.   Clearly, state the purpose of your visit: you have a business meeting with a client.  Regardless of whether you are an independent contractor or working as an employee of a Canadian PEO, you are meeting with a client.  Keep your visits to the United States short, ideally less than one week each visit.  Longer visits may look like you are entering the US to work there and not just for business meetings.

2 Comments

  • Dhaval

    December 14, 2020 - 11:58 am

    Thank you for the valuable information. Can you please provide a list of PEO for Engineering Services? Also, in the case of a self contractor, what formalities need to be followed? Appreciate your feedback on the same. Thanking you in advance.

    • admin

      February 9, 2021 - 4:21 pm

      Thank you for your feedback.

      If you have are interested in finding out more about our services and how we can help you Call us or visit our Contact page.

      Some of the steps involved to become a contractor include registering your business, setting up an accounting system to issue invoices and record payments from customers, track business expenses, and track your government remittances.

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