Hiring in Canada: 2025 Employment Law & Compliance Guide

Expanding your team into Canada in 2025 means more than finding great talent — it means understanding how federal and provincial employment laws intersect. From the Canada Labor Code to varying provincial standards on wages, benefits, and workplace safety, compliance is anything but uniform.

For global employers, these complexities can slow down hiring, expose teams to penalties, and create costly compliance gaps. Misclassifying workers, overlooking statutory contributions, or missing province-specific updates can quickly derail growth plans.

At Deel, we’ve helped thousands of companies navigate multi-jurisdictional hiring across 100+ countries, and Canada remains one of the most nuanced. Whether you’re opening an entity, testing a new market, or hiring remote employees, success depends on getting payroll, benefits, and documentation right from day one.

With the right partner — or an Employer of Record (EOR) solution — you can simplify compliance, reduce risk, and focus on scaling your business, knowing your Canadian workforce is fully protected under local law.

Understand Canadian employment laws and regulations

Canada’s employment law system is uniquely layered. Depending on your industry and where you operate, both federal and provincial regulations may apply. The Canada Labor Code sets the rules for federally regulated sectors — including banking, telecommunications, and interprovincial transportation — while provincial employment standards govern most private-sector employers.

Each province’s Employment Standards Act outlines the core framework for employment relationships, but it’s the supporting regulations that define the finer compliance details — from wage calculations to overtime, vacation, and record-keeping. Understanding both levels matters: the act provides the structure, but the regulations hold the specifics that can trigger penalties if missed.

Across all jurisdictions, human rights legislation protects workers from discrimination and ensures equal treatment in hiring, promotions, and workplace practices. For global employers, demonstrating due diligence isn’t optional — it’s the foundation of compliance and a safeguard against costly legal exposure.

Discover how Cohabs navigated country-specific employment laws with Deel.

See also: In-Depth Guide for a US Company Hiring Employees in Canada

Comply with provincial differences in labor standards

Most private employers in Canada must follow provincial labor standards, which shape key areas like minimum wage, working hours, overtime pay, and leave entitlements. These rules differ across provinces and territories — and they’re updated regularly to reflect inflation and new policies.

While a 40-hour workweek is common, overtime thresholds and pay rates vary by jurisdiction. Minimum wage rates are reviewed annually or semi-annually, creating ongoing compliance tasks for employers operating in multiple locations.

For companies hiring across provinces, multi-jurisdictional compliance is non-negotiable. Employers typically take one of two approaches:

• Standardize HR policies to meet the strictest provincial requirements — easier to manage but often more costly.
• Tailor policies for each jurisdiction — more complex to administer, but cost-efficient.

Key areas that differ across provinces include:

• Minimum wage rates and update schedules
• Overtime calculation methods and premium rates
• Statutory holidays and pay rules
• Vacation accrual and entitlement periods
• Termination notice and severance requirements

Failing to meet local standards can lead to employee complaints, audits, and legal action. Staying current with provincial labor laws isn’t just good practice — it’s essential for compliant, sustainable operations in Canada.

Discover how FEMSA ensures labor laws around the world with Deel.

See also: A Guide to Employee Background Checks in Canada

Define compliant hiring policies and procedures

Building a compliant hiring process in Canada starts with fair and inclusive recruitment. Every job post, interview, and candidate evaluation must be free from discrimination. Under Canadian Equal Employment Opportunity laws, employers cannot make decisions based on race, gender, religion, age, disability, sexual orientation, or other protected characteristics.

Documentation is your best defense in the event of an audit or dispute. Keep detailed records at every stage — from job postings and interview notes to reference checks and final hiring decisions. Well-documented processes show due diligence and help protect your organization from discrimination claims.

To ensure consistency, use standardized policy templates that can be customized across teams and locations. Key templates include:

• Inclusive job descriptions and posting guidelines
• Structured interview guides with compliant questions
• Standard offer letter templates that meet legal requirements
• Onboarding checklists covering all required documents
• Termination procedures that align with provincial rules

Finally, employers should provide regular compliance training for hiring managers. Ongoing education helps reduce risk, promotes fair practices, and ensures every candidate experiences a consistent, compliant hiring process — no matter where they’re based.

Discover how Outfittery streamlines global hiring with Deel.

See also: Employer costs for an employee in Canada

Use legal and compliant employment contracts

In Canada, employment contracts must meet legal standards to protect both the employer and the employee. Each contract should clearly outline the role, compensation, benefits, and termination terms, along with key protections like confidentiality and intellectual property ownership.

Contracts must always meet or exceed provincial employment standards. If any term falls below these minimums, the statutory rules automatically apply — which can override restrictive clauses and expose employers to legal risk.

A common compliance pitfall is misclassifying employees as contractors or leaving out essential details. Classification depends on several factors, including who controls the work, who bears financial risk, and how integrated the role is within the business. Getting this wrong can lead to investigations, fines, and back pay liabilities.

Key elements every Canadian employment contract should include:

• Job title, duties, and reporting structure
• Salary or wage details and payment frequency
• Benefit entitlements and eligibility periods
• Intellectual property and confidentiality clauses
• Termination notice and severance terms
• Probationary period and performance criteria
• References to workplace policies and code of conduct

Watch for red flags such as vague job descriptions, missing termination clauses, terms below statutory minimums, or weak IP protections. A clear, compliant contract builds trust from day one — and protects your business from costly disputes.

See also: Canada Employee Misclassification: Risks & Best Practices

Manage payroll, benefits, and statutory contributions

In Canada, employers must handle several mandatory payroll deductions and contributions, including the Canada Pension Plan (CPP), Employment Insurance (EI), and federal and provincial income taxes.

Under the CPP, both employers and employees contribute 5.95% of pensionable earnings between $3,500 and $68,500 each year — with employers matching employee contributions dollar for dollar.

For Employment Insurance, employers contribute 2.21% of eligible earnings, which is 1.4 times the employee’s rate. These rates and annual earnings limits are reviewed and updated every year.

Beyond these core contributions, statutory benefits may also include:

• Workers’ compensation coverage through provincial boards
• Vacation pay accrual and payout rules
• Statutory holiday pay and eligibility criteria
• Sick leave entitlements under provincial law
• Parental and family leave coordinated with federal programs

Accurate record-keeping of all deductions, payments, and remittances is essential for compliance and audit readiness. Most employers follow biweekly or monthly payroll cycles, and remittances to government agencies must be made on strict timelines.

To simplify these processes, HR and payroll platforms like Deel can automatically calculate deductions, manage filings, and maintain compliant records, reducing administrative effort and compliance risk.

Discover how the Chief of Staff Association made global hiring fast, compliant, and stress-free with Deel.

See also: Employee Benefits in Canada: A Guide for First-Time Canadian Employers

Meet immigration and work permit requirements

A work permit is the legal authorization that allows a foreign national to work in Canada for a specific employer, role, and time period. Employers hiring foreign workers must confirm that each employee has a valid work permit and that the company complies with federal immigration rules and Canadian labor standards throughout the employment relationship.

In most cases, the process begins with a Labor Market Impact Assessment (LMIA) — proof that hiring a foreign worker won’t negatively affect the Canadian job market. Employers must show that they made genuine efforts to recruit Canadians and can justify the need for international talent.

Employer obligations include:

• Verifying work permit validity before employment starts
• Ensuring job conditions match the permit’s details
• Meeting wage and working-condition requirements
• Reporting any changes in employment status or duties
• Cooperating with government audits and inspections

Typical work permit process:

1. Determine if an LMIA is required
2. Submit the LMIA application with supporting documents
3. Wait for government review and approval
4. The employee applies for the work permit
5. Verify the permit before employment begins
6. Track expiry dates and manage renewals

Partnering with experienced immigration counsel or an HR provider like Deel helps navigate visa requirements, sponsorship obligations, and ongoing compliance — ensuring your international hires start and stay on the right side of Canadian law.

Discover how Revolut streamlined employee relocation with Deel.

See also: How to Apply for a Canadian Work Visa and Permit: Step-by-Step Instructions

Train HR teams on compliance and workplace standards

Regular training on labor laws, workplace safety, diversity, and conflict resolution is essential for reducing compliance risks and strengthening workplace culture. HR teams need up-to-date knowledge of evolving regulations, effective complaint handling, and investigation procedures to maintain a fair and legally compliant environment.

Manager training is especially critical. Leaders must know how to handle employee complaints, conduct fair investigations, and take corrective action that protects both employees and the organization. Well-trained HR and management teams help create positive, compliant workplaces that reduce turnover and minimize legal exposure.

Core compliance training topics include:

• Current employment standards and recent legislative updates
• Anti-discrimination and harassment prevention
• Workplace health, safety, and incident reporting
• Privacy laws and employee data protection
• Proper documentation and record-keeping practices
• Termination procedures and severance calculations

Establishing an annual training plan keeps teams aligned with the latest legal requirements and builds long-term expertise in complex compliance areas that demand consistent attention and skill development.

Discover how Beatgrid scaled global HR with one HR lead and Deel.

See also: How to Hire Internationally: A Guide to Global Recruitment

Partner with an Employer of Record to simplify compliance

An Employer of Record is a third-party partner that legally employs workers on your behalf — handling payroll, taxes, benefits, and compliance with local employment laws. This model allows international companies to hire talent in Canada without opening a local entity or navigating complex regulations alone.

By partnering with an EOR, businesses can simplify compliance and reduce risk. The EOR becomes the legal employer, managing all statutory requirements, while you retain day-to-day control over your team’s work and performance.

See also: EOR vs. Entity Costs: What’s More Affordable?

Key benefits of using an EOR in Canada:

• Fast, compliant market entry
• Reduced legal and administrative complexity
• Access to local HR and legal expertise
• Scalable workforce management for growing teams

This approach is ideal for companies testing the Canadian market, hiring small remote teams, or operating without local HR infrastructure.

With Deel’s EOR solution, you can hire and pay Canadian employees with full compliance confidence. From contract creation and payroll to benefits administration and reporting, Deel manages the complexity — so you can focus on building and scaling your business.

Discover how Data Talks accelerated global hiring with Deel EOR.

See also: How to Hire Using an Employer of Record in Canada (2025 edition)

Monitor and update policies to reflect legal changes

Canadian employment law is constantly evolving. Legislative updates, regulatory changes, and new court rulings can all impact employer obligations. In fact, research shows that 95% of noncompliance cases in Canada happen because employers are unaware of the latest requirements — highlighting the importance of staying informed.

Regularly reviewing and updating HR policies, with guidance from legal or compliance experts, helps organizations stay ahead of change. A proactive approach not only prevents costly violations but also supports smoother operations and stronger workforce management.

Employers can strengthen compliance by monitoring legal updates across federal and provincial levels and applying policy changes as soon as new rules take effect. This ensures teams remain aligned with current employment standards and minimizes regulatory risk.

Regular compliance audit checklist:

• Review minimum wage and overtime rate changes
• Update statutory holiday and leave entitlements
• Check for workplace safety regulation updates
• Verify tax rate and contribution limit adjustments
• Confirm human rights legislation changes
• Review termination and severance requirements

Setting a routine for quarterly policy reviews and annual full audits helps maintain compliance, close regulatory gaps, and support a competitive, well-managed workforce.

Discover how Amilon cut 480 hours of monthly HR work with Deel.

See also: The Key to Continuous Company Compliance in Today’s Global Landscape

Hire in Canada confidently and compliantly with Deel

Expanding into Canada shouldn’t be slowed down by compliance complexity. With Deel’s fully compliant Employer of Record, you can hire Canadian talent fast, without setting up a local entity or managing separate payroll tax registrations.

Deel’s platform provides transparent pricing, automated compliance, and end-to-end visibility across 150+ countries, so you can grow globally with peace of mind.

Ready to hire in Canada?

Book a Deel demo today and see how our EOR solution helps you scale quickly, stay compliant, and save costs — all backed by G2 and Everest Group’s top industry rankings.