Have you decided to hire your first employee? Congratulations! The change from running the business all on your own to hiring your first employee can be an exciting time.
Our checklist of government rules to follow and documents to produce can help make this a successful transition.
- Letter of offer
You can establish a strong foundation of employment with a letter of offer, outlining the terms of the employment. Have the new employee sign it to confirm they understand and accept what your company is offering.
- Job description
Creating a job description sets employment expectations and can help in performance management of your new hire. Tips, resources and a template are available from CFIB’s Why do job descriptions matter?
- Employee or self-employed contractor status
If your new hire your an employee or a self-employed contractor? It is important to know the rules from the perspective of Canada Revenue Agency (CRA), the Workers’ Compensation Board and the Employment Standards Act. The status determines if you or the new hire is responsible for payroll deductions, WCB premiums and what parts of the employment are protected by employment standards.
Open a payroll account with Canada Revenue Agency (CRA) for the source deductions you will deduct from your employee's paycheque. You will remit both the employer- and employee-portions of these deductions to CRA. Call 1-800-959-5525 or register online.
To know how much income tax to deduct, have your employee complete a TD-1 form for both federal and Manitoba personal income taxes. You don’t need to send the forms to CRA; simply keep them on file.
CRA has an on-line payroll deductions calculator can help you calculate the amounts for Employment Insurance (EI) premiums and Canada Pension Plan (CPP) contributions.
CRA’s video and webinar library can help you understand your CRA obligations.
- Workers’ Compensation
You may not have registered with the Workers Compensation Board (WCB) as a sole proprietor. In Manitoba, close to 80% of workplaces must register for workers’ compensation coverage. Unless your type of business is on the list of compulsory industries, as soon as you hire an employee, you must open a WCB account.
You will pay premiums based on the employee’s earnings and can’t deduct premiums from wages. Call 204-954-4505 or 1-855-954-4321, ext. 4505 or register online.
- Employment Standards
Familiarize yourself with employment standards laws that set out hours of work, overtime, vacation, statutory holidays, notice of termination, etc. You need to provide these minimum standards to your new hire. Some employers provide more, but no one can agree to work for less than the minimum rules.
Approximately 90% of Manitoba firms fall under provincial regulations. A great place to start is the Manitoba Employment Standards Branch website.
The other 10% – from the grain industry, air transportation, aircraft operations, highway transportation, communications – adhere to the Canada Labour Code. If your workplace is on the list of federally-regulated workplaces read Part III of the Canada Labour Code and the pamphlets.
- Workplace Health and Safety
There are a variety of rules to follow so you offer a safe working environment for your new hire. Even the smallest workplace in every industry has safety requirements. Learn more at the SAFE Work web site. CFIB has a variety of tools and templates to help you be in compliance.
Along with your on-the-job training, online training through your CFIB membership offers a variety of free courses including “Customer First” about communications, active listening, handling difficult people and “Workplace and Personal Skills” about team meetings, delegating, dealing with conflict, managing stress, etc.
Four certificate courses are available for $69 per person per course. These options provide 20 to 30 hours of training on small business management, health and safety, sales and marketing, and human resources.