Are you hiring your first employee? Congratulations! Now what?
Are you a budding entrepreneur preparing to hire your first employee? Here are some of the steps you should consider.
Letter of Offer
We recommend that you establish the foundation for employment with your company by providing your new employee with a letter outlining the terms of their employment. CFIB has a sample Letter of Offer which you can customize to your situation. Please contact your Business Counsellor to access this sample. Your new employee should sign the letter, confirming that they understand and accept what your company is offering, the employee keeping the original and you retaining a copy on their employee file.
CFIB has helpful information when hiring an employee, including a sample Employment Contract. Be sure to look at "Reducing Employment Termination Exposure " . Sometimes it may not be clear whether a worker is an employee or self-employed. For clarification on this, please see the Canada Revenue Agency document Employee or Self-Employed as CFIB collaboratively worked on with the Alberta government on the subject.
It is necessary to open an account with Canada Revenue Agency (CRA) for the payroll deductions you must make from your employee's pay cheque. To open an account contact Canada Revenue Agency at 1 800 959-5525 or register online. You must have your employee complete a TD-1 form in order to determine how much income tax to deduct. There is also the requirement for the Alberta Tax form. You will also need to make the other required deductions from your employee's wages, such as Income Tax, Employment Insurance and Canada Pension Plan (CPP). Some of these deductions have an employer's portion that must be paid. CRA has an on-line payroll deductions calculator to help you determine these deductions.
You may need to open an account with Workers Compensation and pay premiums on behalf of your employee. These premiums must be paid by the employer and cannot be deducted from the employee's wages. To determine the requirements in Alberta please see the fact sheet produced by the Alberta WCB on "Do I need a WCB account?"
As an employer you will need to familiarize yourself with Employment Standards, which are the rules governing an employee's employment with you. They include vacation pay, regular hours, when to pay overtime, breaks, general holidays and more. You can visit the employment standards site of the Government of Alberta Human Services, Employment & Immigration for guidelines or see our web post for an overview at "Understanding Employment Standards in Alberta"
Occupational Health and Safety
When you have employees, it is important to be aware of Occupational Health & Safety regulations in the workplace. Check for information on Occupational Health & Safety in Alberta for guidelines or requirements or for an overview see CFIB's web post. A call to your CFIB Business Counsellor can bring OH&S policy templates to your email address to help your business comply with legislation.
For more detailed information please contact your CFIB Business Counsellor at 1 888 234-2232.