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Hiring in Canada? Beware of These Differences Between American and Canadian Labor Laws

Aug 13, 2020 | Business, Canadian Permanent Resident, Remote Work

America and Canada share more than just a common border. The parallels in terms of culture, values, and traditions for America and Canada cannot be further stated.

Labor laws, however, are an exception to this rule. There is a notable difference between the two nations when it comes to labor laws and protections, especially for salaried workers.

There are a few distinctions in Canadian and American labor laws that one should consider when hiring in Canada. These include:


American labor laws are set by the federal government and are a federal issue for all the 50 states. Labor laws in Canada, however, are a provincial issue.

An apparent exception to this Canadian Statute is where the industry is “integral to federal work or undertaking.”

Such industries include railways, ports, interregional transport, airlines, and banks.

This means that almost 90% of the Canadian workforce is regulated by their respective provinces and 10% by the federal government.

Each province has its employment regulations as regards to:

  • Overtime and hours of work
  • Job guaranteed leaves of absence
  • Minimum wages 
  • Vacations and Holidays
  • Notices on termination of employment Contracts

The United States has the National Labor Regulations Board (NLRB) that regulates a large percentage of the unionized labor force.

Maternity and Parental Leave  

A Canadian worker is entitled to 12-18 months of unpaid leave that varies by province to tend to a recently born child. This leave is mandated by the state and benefits enforced by the province. The employer can temporarily replace the worker but must re-employ her once the leave is over.

On top of the leave, the state offers paid benefits for one or both parents through Canada’s insurance plan.

The United States, however, does not have a federally mandated maternity leave; the issue is left for the states to decide individually. Only Rhode Island, California and New Jersey have a mandated leave.

Employment at Will

In Canada, there is no employment at will. Depending on the province, an employer can only fire an employee after giving them prior notice unless there is just cause.

The few exceptions are in provinces such as Nova Scotia, where an employee of more than ten years can only be fired for just cause. The same applies to two years in Quebec. 

With a few legal exceptions in the United States, an employer is under no obligation to give prior information before terminating a contract. This is in all states, except for Montana.

Statutory Holidays

Workers in Canada are entitled to Canadian paid holidays each year, which vary from province to province. There are national statutory holidays such as Christmas and some other statutory holidays in each Canadian province.

The United States, however, does not guarantee paid holidays to its workers.

The average American in the private sector gets about six paid holidays each year.

Vacation Periods and Pay

In terms of paid vacations, the United States does not federally guarantee its employees paid vacations, the only developed nation not to do so.

On the other hand, Canada is just a few yards ahead of the U.S in the vacation race. Canadian provinces vary in their mandates for paid vacations. Its employees get two weeks of paid vacation each year in federally regulated industries.

In British Columbia, Manitoba, Quebec, Nunavut, and NW territories, you must give your employees three weeks paid vacation after their fifth year.

In New Brunswick, Nova Scotia, and Prince Edward, you must give your employees three weeks paid vacation after their eight-year.


The overtime laws in Canada require the employer to pay 1.5 times the usual wage in most provinces. This applies to employees who work more than a 44-hour workweek.

On the other hand, in America, an employee is eligible for overtime if they earn less than $23 660. If an employee makes more than that, overtime is left to the will of the employer.

Adjustments to Post Retirement Welfare Benefits

Creating modifications to retirement benefits is almost impossible in Canada, as it involves back and forth with the Unions and Collective bargaining agreements.

However, these are comparatively easier in the United States if the employer had prior agreements with the employees.

Bright R is one of the most efficient ways to hire in Canada. For more information on Canadian Labor Laws or make Canadians and their work ethic part of your business, Contact Us Today and let us be part of your story.

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