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Hiring an employee is an important part of growing your business. There is a lot to think about, but CFIB Business Counsellors want to help make it easier for you.
Here are some things 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.
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.
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 your new employee up on payroll you will need his or her 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.
Workers’ Compensation Board of Nova Scotia
If your business is incorporated you should have already opened an account with the Workers’ Compensation Board of Nova Scotia (WCB). If your business falls in the list of mandatory industries, and you have 3 or more employees, you must register with WCB within 10 days of hiring the third employee. For more information on mandatory industries, how to calculate the number of employees and other employer-related information, please visit the Employers’ section of the WCB website.
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 pay, regular hours, overtime, breaks, statutory holidays, leave of absence, and more. The Government of Nova Scotia has Employment Rights information on their website, 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 Nova Scotia, Occupational Health and Safety is overseen by Labour and Advanced Education. 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.