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Employing Remote Workers: Legal Considerations and Practical Tips for Canadian Businesses

May 29, 2023 | Uncategorized

The rise of remote work has revolutionized the way businesses operate in Canada. With the increasing availability of technology and a shift in work culture, organizations are embracing remote work arrangements to accommodate employee preferences, expand their talent pool, and boost productivity.

While employing remote workers and independent contractors offers numerous advantages, it also comes with important legal considerations for businesses. In this article, we will provide a comprehensive overview of the key aspects that Canadian employers need to consider when employing remote workers and independent contractors. We will cover legal requirements, policy considerations, and the potential consequences of worker misclassifications.

Before Hiring a Remote Employee 

Before proceeding with hiring a remote employee, it is crucial to consider a few factors. Here’s what you should keep in mind:

  • Experience: Look for candidates who have relevant experience working remotely or in a similar position. Ask them about their previous work experience and how they managed to work independently.
  • Communication skills: Effective communication is critical when working remotely. Ensure that candidates have strong communication skills and are comfortable communicating via email, chat, video conferencing, and other online platforms.
  • Technical skills: Depending on the position, candidates may need to have specific technical skills. Be sure to verify that they have the necessary software and hardware, as well as any certifications or qualifications required.If you plan on providing equipment or reimbursing remote workers for office or technological expenses, it’s important to establish a remote work expenses policy. This policy should outline the specific expenses that will be covered, as well as the process for submitting and approving expense requests.
  • Time management: Remote workers must be able to manage their time effectively, prioritize tasks, and meet deadlines without constant supervision. Ask candidates about their time management skills and how they stay organized.If you plan on using software to monitor employee activity, it’s important to establish clear guidelines and policies for remote employee monitoring. This includes outlining what types of activities will be monitored, how the data will be used, and how employee privacy will be protected.
  • References: Always check references, especially when hiring remote workers. Speak with former colleagues or employers to get a sense of the candidate’s work ethic, reliability, and communication skills.
  • Cultural fit: Just like with in-person hires, it’s essential to find remote workers who are a good cultural fit. Make sure they share the same values and work ethic as your company, and that they’re committed to working remotely long-term, if that is your strategy.
  • Wage: Be mindful of wage discrepancies between regions and ensure that the compensation offered is fair for the role and the candidate’s experience level.
  • Legal and tax considerations: Hiring remote workers can have legal and tax implications, especially if the worker is based in a different province or country. Ensure that you have the appropriate legal and tax advice to avoid any potential issues down the line.

 

Worker Classification

One of the biggest challenges for employers is correctly classifying workers as employees or independent contractors. In Canada, the standards for classifying workers as independent contractors have become stricter in many jurisdictions. Misclassifying workers can result in significant fines and penalties.

To comply with applicable laws, employers should review their practices and policies related to worker classification. Providing training to managers and personnel responsible for determining worker classification is crucial. This training should cover legal standards and the risks associated with misclassification, including fines, back taxes, and other liabilities.

Employee vs Independent Contractor

Differentiating between an employee and an independent contractor is essential. Employees work as part of the employer’s business, while independent contractors are in business for themselves and retain control over their work. There are multiple factors that need to be considered when determining the worker’s status.

Remote Work vs. Working from Home 

Remote work and working from home are related but distinct concepts. Working from home typically refers to employees performing their job duties from their residence instead of commuting to a physical workplace. Remote work, on the other hand, involves employees working from a location outside the employer’s physical office, often using communication and collaboration tools to work with colleagues in different time zones or locations.

Employment Standards Legislation

Each province and territory in Canada has its own employment standards legislation, which sets out minimum requirements for areas such as:

  • Overtime 
  • Paid/Unpaid leaves of absence 
  • Excess hours 
  • Policy requirements (i.e. Ontario policies for disconnecting from work, electronic monitoring) 
  • Termination entitlements 
  • Exemptions 
  • Minimum wage 

To ensure compliance with applicable employment standards legislation, businesses should be aware of the differences in minimum standards based on the jurisdiction, and ensure that their policies and practices meet or exceed these standards. 

Other Acts/Codes that may affect remote workers (depending on the jurisdiction) include:

  • Human Rights Acts/Codes 
  • Privacy Acts 
  • Accessibility legislation
  • Pay Equity or Equal Pay for Equal Work legislation

Which Jurisdiction Applies?

Determining which jurisdiction’s employment standards legislation applies to remote workers can be complex. Factors such as the location of work, the worker, and the employer need to be considered. Consulting with an HR advisor or a qualified lawyer in the worker’s jurisdiction is advisable.

Our webinar ‘Legal Considerations and Practical Tips for the Remote Workplace’ covers all of these above points in detail, and discusses a few case studies. The recording of the webinar is available for free to you: Watch the webinar recording here.

The webinar features Anatoly Dvorkin, CEO and employment lawyer at HRC Law Professional Corporation, Ljubica Durlovska, employment lawyer at HRC Law Professional Corporation and Errol H. Tenenbaum, Partner at Robins Appleby. 

Occupational Health and Safety

Every province and territory in Canada has its own OHS legislation, which outlines requirements for ensuring the health and safety of workers. Businesses should be familiar with the OHS requirements in their jurisdiction, ensure compliance, and provide training and support to remote workers.

Workers’ Compensation 

Workers’ compensation is designed to protect employees in case of work-related injuries or illnesses. The laws and regulations surrounding remote workers’ compensation can be complex and vary by jurisdiction. Employers should understand the requirements in their jurisdiction and ensure compliance.

In most provinces: An employer with no corporate presence in the province is still required to have worker’s compensation coverage pursuant to provincial legislation, if the employer has an employee living and working in that province. 

New Brunswick: An employer with no corporate presence in the province is still required to have coverage pursuant to the Workers Compensation Act if it has three or more employees employed at the same time in the province. 

Note: Employers in certain industries are exempt from mandatory workers’ compensation, but exemptions differ by jurisdiction.

Case Study: Employee Injured while Working from Home

Across Canada, there has been a rise in legal cases regarding health and safety concerns in remote work. A recent case involving an Air Canada employee in Quebec exemplifies this trend. While on her lunch break, a remote employee tripped and fell down the stairs while walking from her home office to the kitchen. The court deemed her eligible for workers’ compensation benefits, stating that the injury was an unforeseen and sudden event that occurred during work. It’s worth noting that laws regarding this issue vary from province to province, but in this specific instance, the court ruled that the incident took place in the workplace because it occurred during a mandatory lunch break and was thus covered under workplace safety legislation.

Please note that the information provided in this article and in the webinar recording is not intended as legal advice and you should consult a lawyer or an HR expert for specific advice. 

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Employing remote workers offers numerous benefits to Canadian businesses, including cost savings and access to a wider talent pool. However, it is essential for employers to navigate the legal landscape and correctly classify remote workers. Adhering to legal requirements, establishing clear policies, and understanding the nuances of each jurisdiction will contribute to successful remote work arrangements. Consulting with knowledgeable advisors in HR and employment law is recommended to ensure compliance and mitigate potential risks.