Includes 8 essential resources that’ll help you navigate the landscape of remote working effortlessly!
In recent years, remote work has become increasingly popular across many industries, including the nonprofit sector in Canada. With advances in technology and changes in work culture, more and more organizations are embracing remote work arrangements to accommodate their employees’ needs and preferences, as well as to expand their talent pool and increase productivity.
While there are many benefits to employing remote workers and independent contractors, there are also important legal considerations that nonprofits must take into account. In this article, we will provide an overview of everything you need to know about employing remote workers and independent contractors in your nonprofit in Canada, including legal requirements, policy considerations, and the potential consequences of misclassification.
As always we have a few valuable free resources for you. Here’s the list of all the freebies you are going to find in the article.
- Remote Work Policy
- Work from Home Policy
- Remote Employee Monitoring Policy
- Remote Work + Expenses Policy
- Remote Work Best Practices Checklist
- Employee vs Independent Contractor Checklist
- Video Recording of our webinar: Legal Considerations and Practical Tips for the Remote Workplace that features Anatoly Dvorkin, CEO and employment lawyer at HRC Law Professional Corporation, Ljubica Durlovska, employment lawyer at HRC Law Professional Corporation and Errol H. Tenenbaum, Partner at Robins Appleby.
- Webinar presentation with valuable insights and case studies
Save your time, and get them all in a single click.
Before hiring a remote employee
If you’re considering hiring a remote employee, it’s important to take a few things into consideration before proceeding. Here are some key factors to keep in mind:
- Experience: Look for candidates who have relevant experience working remotely or in a similar position. Ask them about their previous work experience and how they managed to work independently.
- Communication skills: Effective communication is critical when working remotely. Ensure that candidates have strong communication skills and are comfortable communicating via email, chat, video conferencing, and other online platforms.
- Technical skills: Depending on the position, candidates may need to have specific technical skills. Be sure to check that they have the necessary software and hardware, as well as any certifications or qualifications required.
If you plan on providing equipment or reimbursing remote workers for office or technological expenses, it’s important to establish a remote work expenses policy. This policy should outline the specific expenses that will be covered, as well as the process for submitting and approving expense requests.
- Time management: Remote workers must be able to manage their time effectively, prioritize tasks, and meet deadlines without constant supervision. Ask candidates about their time management skills and how they stay organized.
If you plan on using software to monitor employee activity, it’s important to establish clear guidelines and policies for remote employee monitoring. This includes outlining what types of activities will be monitored, how the data will be used, and how employee privacy will be protected.
Here’s a comprehensive policy template you can download for free.
- References: Always check references, especially when hiring remote workers. Speak with former colleagues or employers to get a sense of the candidate’s work ethic, reliability, and communication skills.
- Cultural fit: Just like with in-person hires, it’s essential to find remote workers who are a good cultural fit. Make sure they share the same values and work ethic as your company, and that they’re committed to working remotely long-term.
- Wage: Be mindful of wage discrepancies between regions and ensure that the compensation offered is fair for the role and the candidate’s experience level.
- Legal and tax considerations: Hiring remote workers can have legal and tax implications, especially if the worker is based in a different province or country. Ensure that you have the appropriate legal and tax advice to avoid any potential issues down the line.
If you are still confused about the do’s and don’ts of employing remote workers, use our ‘Remote Workplace Best Practices Checklist’.
Worker classification
One of the biggest challenges facing nonprofits that employ remote workers and independent contractors is the evolving legal landscape regarding worker classification. In many jurisdictions across Canada, the standards for classifying workers as independent contractors are becoming stricter, and employers who misclassify workers can face significant fines and penalties.
To ensure compliance with applicable laws and regulations, employers should review their practices and policies related to independent contractors, and provide training to managers and other personnel who are responsible for determining worker classification. A key part of this training should be an understanding of the legal standards and risks associated with misclassification, including the potential for fines, back taxes, and other liabilities.
Employee vs independent contractor
The difference between an employee and an independent contractor is that an employee works as a part of their employer’s business while an independent contractor is in business for themselves and retains control over much of their work. Several factors are considered by adjudicators in determining whose business a worker is working for. The checklist shared above can help you better understand and determine the status of your workers.
Employers who misclassify employees are under close scrutiny by the Ministries of Labour throughout Canada. Apart from the monetary fines and penalties, there are additional consequences such as paying back taxes, worker premiums, as well as vacation and stat pay that were previously owed. The repercussions of such misclassification are numerous and far-reaching.
Remote work vs working from home
Remote work and working from home are related concepts, but they are not the same thing.
Working from home generally refers to a situation where an employee performs their job duties from their home instead of commuting to an office or other workplace. This can be a temporary arrangement, such as during a pandemic or inclement weather, or a more permanent one.
Remote work, on the other hand, refers to a work arrangement where an employee performs their job duties from a location outside of the employer’s physical office or workplace. Remote work is not limited to a specific location or schedule, and often involves using communication and collaboration tools to work with colleagues who may be in different time zones or even countries.
Employment Standards Legislation
Another important consideration when employing remote workers and independent contractors is the differences in minimum standards based on jurisdiction. Each province and territory in Canada have their own employment standards legislation, which sets out minimum requirements in areas such as:
- Overtime
- Paid/Unpaid leaves of absence
- Excess hours
- Policy requirements (i.e. Ontario policies for disconnecting from work, electronic monitoring)
- Termination Entitlements
- Exemptions
- Minimum wage
To ensure compliance with applicable employment standards legislation, nonprofits should be aware of the differences in minimum standards based on jurisdiction, and ensure that their policies and practices meet or exceed these standards.
Other provincial legislation that may affect remote workers include:
- Human Rights
- Protection of Personal Information
- Accessibility
- Pay Equity
Which jurisdiction applies?
One of the challenges of employing remote workers and independent contractors is determining which jurisdiction’s employment standards legislation applies. This can be a complex process, and it often depends on factors like where the work is being performed, where the worker is located, and where the employer is based. When employing a worker who is out of your jurisdiction, the best practice is to consult with an HR expert or a qualified lawyer in the jurisdiction where your worker is located.
Ontario
The Employment Standards Act will apply if:
- The employee’s work is to be performed in Ontario; or
- The employee’s work is to be performed in Ontario and outside Ontario but the work performed outside Ontario is a continuation of work performed in Ontario.
New Brunswick
The Employment Standards Act: “Except where exempted under this Act or the regulations, all employers and employees whose relations are subject to the legislative authority of the Legislature are bound by this Act, notwithstanding that the work or services may be performed in whole or in part outside New Brunswick”.
Note: there are no exemptions stated in the New Brunswick ESA.
All Other Provinces
- Legislation is mostly silent.
- Case law stipulates that if there is a strong enough connection between the employment and the province (i.e. the employee lives and works in the province), that province’s legislation will apply. But there are nuances.
- Some other considerations include:
- Where is the work done?
- Where does the employee live?
- Where is the business located?
- Is the out-of-province work incidental to the employment relationship or central to it?
- Where does the wage payment occur?
- Whether there are contractual provisions that govern which law will apply (but this is NOT determinative).
Our webinar Legal Considerations and Practical Tips for the Remote Workplace covers all of the above points in detail, and discusses a few case studies. Get the complete webinar recording that features top employment lawyers and a taxation specialist.
Occupational health and safety
Another important consideration when employing remote workers is Occupational Health and Safety (OHS). Each province and territory in Canada has its own OHS legislation, which sets out requirements for ensuring the health and safety of workers in the workplace.
To ensure compliance with applicable OHS legislation, nonprofits should be aware of the requirements in their jurisdiction and verify that their policies and practices meet or exceed these standards. They should also provide training and support to remote workers to ensure that they understand and comply with OHS requirements.
Ontario
- OHS legislation applies to out-of-province entities if they have one or more workers permanently working in Ontario BUT does not apply if the worker is performing work from a private residence.
British Columbia
- OHS legislation applies to out-of-province entities if they have one or more workers permanently working in BC, even if the worker works from home.
- If a worker works from home, the employer must:
- Assess potential hazards/risks through dialogue with the worker; and
- Implement a written procedure to check the well-being of the worker assigned to work alone.
New Brunswick
- OHS legislation applies to out-of-province entities if they have one or more workers permanently working in NB, with a limited exception for workers who work from a “private home”.
But the wording of the limitation is not clear and would likely extend to work-from-home arrangements. - If the worker works from home, the employer must establish a code of practice addressing working alone and ensuring the health and safety of the worker.
All Other Provinces
- OHS legislation applies to out-of-province entities if they have one or more workers permanently working in the province, even if the worker is performing work from home.
Workers’ compensation
Workers’ compensation is an essential aspect of employment law that is designed to protect employees in case of work-related injuries or illnesses. The system ensures that workers are fairly compensated for any damages or losses suffered as a result of their work. However, the laws and regulations surrounding remote workers’ compensation can be complex and vary by jurisdiction, making it challenging for employers to navigate.
In most provinces: An employer with no corporate presence in the province is still required to have worker’s compensation coverage pursuant to provincial legislation, if the employer has an employee living and working in that province.
New Brunswick: An employer with no corporate presence in the province is still required to have coverage pursuant to the Workers Compensation Act if it has three or more employees employed at the same time in the province.
Employers in certain industries are exempt from mandatory workers’ compensation, but exemptions differ by jurisdiction.
Case study: Employee injured while working from home
Across Canada, there has been a rise in legal cases regarding health and safety concerns in remote work. A recent case involving an Air Canada employee in Quebec exemplifies this trend. While on her lunch break, a remote employee tripped and fell down the stairs while walking from her home office to the kitchen. The court deemed her eligible for workers’ compensation benefits, stating that the injury was an unforeseen and sudden event that occurred during work. It’s worth noting that laws regarding this issue vary from province to province, but in this specific instance, the court ruled that the incident took place in the workplace because it occurred during a mandatory lunch break and was thus covered under workplace safety legislation.
If you have remote workers, we highly recommend referring to the free resources in the article, especially the video recording and the presentation slides of our webinar Legal Considerations and Practical Tips for the Remote Workplace.
The recording covers everything from employment standards legislation and contractual considerations to taxation that applies to remote workers. The webinar had several case study discussions and a question and answer session where our employment law experts answered questions from leaders like you.
Please note that the information provided in this article and in the webinar recording is not intended as legal advice and you should consult a lawyer or an HR Covered expert for specific advice.
Employing remote workers can be highly beneficial, especially for nonprofits. By doing so, nonprofits can save a significant amount of money as they don’t need to have a dedicated office space for the employee, nor pay for relocation, or utilities. Additionally, this approach offers nonprofits access to a wider talent pool, as they can hire individuals from across the country or even the world.
However, nonprofits must be well-informed about the technical aspects of employing remote workers, particularly in regards to worker classification. It’s crucial for organizations to ensure that they’re classifying remote workers correctly and adhering to all applicable laws and regulations. If you’re unsure about employing remote workers or how to classify them properly, you can book a free consultation with one of the HR experts at HR Covered.
About HR Covered: At HR Covered, we have a deep understanding of the critical organisational needs and processes specific to Canadian nonprofits. We ‘get’ your culture, your goals, and what drives you, too. Our unparalleled responsiveness and impeccable service have helped more than 200 nonprofits in Canada to focus on their core activities. We provide a plethora of services including HR Compliance, Legislative Training, HR Documentation, Health & Safety Compliance, HR Legal, HR Consulting and Outsourcing. For more info visit our website: www.hrcovered.com or call us at +1 866-606-0149.
