If you are planning to hire your first employee, congratulations! Small businesses are the primary source of new jobs in Canada.
Our list of topics will help ensure you comply with government rules and establish a positive working relationship with your new hire.
Letter of Offer & Employment Contract
We recommend you establish the foundation for employment by providing a letter outlining the terms of the employment. Write a letter of offer and have the new employee sign it to confirm they understand and accept what your company is offering.
We also recommend that you clearly outline the terms and conditions of the job by creating an employment contract. This document should also be signed by the employee.
Before giving the originals to the employee, make copies of the signed documents for your company files.
Access our Letter of Offer template and Hiring checklist at CFIB’s page, Thinking of hiring a new employee? Tips to improve your recruitment and hiring decisions. You can find an Employment Contract template in PDF format linked to CFIB's page, Take care when dismissing an employee: avoid costly mistakes.
We recommend that you create a job description. This document will allow you to write a better job posting, set employment expectations and aid in performance management of your new hire. Find more information and a template at CFIB’s page, Why do job descriptions matter?
Employee or Self-Employed Contractor
Sometimes it may not be clear if the new hire is an employee or a self-employed contractor. It is very important to know the status as this determines who pays EI, CPP and income tax. We recommend requesting a ruling from the Canada Revenue Agency (CRA). They will study the total working relationship, not just the documents both parties have signed. Learn more with CRA's Employee or Self-employed? (Guide RC4110).
Failure to understand the rules about independent contractors can, in some instances, result in charges and penalties that may be greater than the cost of hiring the contract labour in the first place.
You will need to open a payroll account with Canada Revenue Agency (CRA) for the deductions you must make from your employee's pay cheque. The deductions are remitted to CRA. Call 1-800-959-5525 or register online.
Your employee should complete a TD-1 form for both federal and Saskatchewan personal income taxes. This helps determine how much tax you will deduct. Keep both forms on file.
Along with deducting income taxes, you must also deduct Employment Insurance (EI) premiums and Canada Pension Plan (CPP) contributions. As the employer you must also remit an employer portion for EI and CPP to CRA. CRA’s on-line payroll deductions calculator can help you determine the deductions.
CRA has short videos to help you fully understand your obligations. You can access them at CFIB's page, Learn about your tax and payroll obligations with CRA videos.
You may not have registered with the Saskatchewan Workers' Compensation Board (WCB) as a sole proprietor. However, when you hire an employee, if your business is on the list of compulsory industries, you must open a WCB account. Employers pay premiums based on the employee earnings. You may not deduct WCB premiums from wages. Call 306-787-4370 or 1-800-667-7590, or register online.
You will need to familiarize yourself with The Saskatchewan Employment Act that sets out rules on hours of work, overtime, vacation, Public Holidays, and more. It is important for you to provide these minimum standards to your new employee. Some employers provide more, but no one can agree to work for less than the minimum rules.
A great place to start is CFIB’s page, Understanding Saskatchewan Employment Standards. You can also visit the Governent of Saskatchewan's Employment Standards web site.
Workplace Health and Safety
When you have employees, it is important to be aware of Saskatchewan's occupational health and safety laws under The Saskatchewan Employment Act. Check for information on the Government of Saskatchewan's Safety in the Workplace web site. Resources and templates to make compliance easier are available on CFIB's Better Safe than Sorry: 5 ways your business can improve workplace health and safety web page.
CFIB Business Counsellors are available to help you!