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You’re 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 customise to your situation. Please contact your Business Counsellor at 1-888-234-2232 to access this template.  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 in their employee file. 

Employment Contract

CFIB has helpful information when hiring an employee, including a sample Employment Contract. Be sure to read the handout Reducing Employment Termination Exposure. Sometimes it is difficult to know whether a worker is an employee or a self-employed contractor. For clarification on this, please see the Canada Revenue Agency document Employee or Self-Employed

Payroll

You will need to open an account with the Canada Revenue Agency (CRA) for the payroll deductions you must make from your employee’s pay cheque (income tax, EI, CPP).  To open an account, contact the CRA at 1-800-959-5525 or register your business online. Your employee will need to complete a Federal TD-1 form and also a provincial form so you know how much income tax to deduct. Do not send the TD-1 forms to the CRA they are for your records only. Employment Insurance (EI) and Canada Pension Plan have employer portions that must be deducted as well as the employee portion. The CRA has an online payroll deductions calculator to help you determine these deductions.  The CRA has an Employer’s Guide to Payroll Deductions and Remittances which you may find useful. 

To set someone up on payroll you will need their Social Insurance Number – as an employer it is your responsibility to request this within three days of the employee starting work.  The employee must present a SIN card, a Confirmation of SIN letter or other documentation showing the SIN. Please note that as of March 31, 2014 production of SIN cards was terminated. SINs will be issued in paper format. Existing SIN cards will not be recalled. 

SINs beginning with “9” are issued to temporary foreign workers who are neither Canadian citizens nor permanent residents. These SINs are valid only as long as the foreign worker is authorised to work in Canada. If an employee has a SIN starting with “9” you must request to see a copy of their immigration document authorising them to work in Canada. If the document has expired, you must ask the employee to contact Citizenship and Immigration (CIC) to obtain a valid document before hiring the employee.   

WorkplaceNL

If your business is incorporated you should have already opened an account with WorkplaceNL (formerly the WHSCC). If your business is not incorporated there is no need to register until you hire an employee. You will then need to open an account with WorkplaceNL and pay premiums on behalf of your employee. For information on how to register, costs, and other requirements, please visit the Employer Services section of the WorkplaceNL website. 

Employment Standards

As an employer you will need to familiarise yourself with Employment Standards in your province, which are the rules governing an employee’s employment with you. These rules are the minimum standards for vacation par, regular hours, overtime, breaks, statutory holidays, leave, and more. The Government of Newfoundland and Labrador has frequently asked questions on Labour Standards, or you can see our web posts in the Employment Standards section of our webs site for more information. 

Occupational Health and Safety

When you have employees, it is important to be aware of Occupational Health and Safety regulations in the workplace. In Newfoundland and Labrador, Occupational Health and Safety is overseen by Service NL. You will find information on our web site, and a quick call to your Business Counsellor at 1-888-234-2232 can bring policy templates and information to your e-mail inbox to help your business to become OH&S compliant. 

For more detailed information please contact your CFIB Business Counsellor at 1 888 234-2232.

Not a member of CFIB yet? JOIN CFIB today for more help and information.

 

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