Employment Standards by Province: Quick Reference for Canadian Founders

Understanding Canadian Employment Standards

Employment law in Canada is primarily provincial jurisdiction. Each province sets its own employment standards covering minimum wage, hours of work, overtime, vacation, statutory holidays, leaves of absence, and termination requirements. This means that if you have employees in multiple provinces, you must comply with different rules for each location. There is no single "Canadian employment law"—you need to know the rules for each province where you employ people.

Employment standards legislation sets minimum requirements that employers must meet. You can always provide better terms (higher wages, more vacation, longer notice periods), but you cannot contract out of or go below the statutory minimums. Employment contracts that violate employment standards are void to the extent of the violation, and employees can file complaints with provincial employment standards offices to enforce their rights.

Ontario Employment Standards

Ontario's Employment Standards Act (ESA) governs most employees in Ontario. Key provisions include a general minimum wage of $16.55/hour (as of October 2024), three weeks of vacation after five years of employment (two weeks for the first five years), overtime pay at 1.5x regular rate after 44 hours per week, and eight statutory holidays per year. Ontario also provides various leaves of absence including pregnancy leave (17 weeks), parental leave (61-63 weeks), and emergency leave (up to three days per year).

Termination Requirements in Ontario

Ontario requires notice or pay in lieu when terminating employees without cause. The minimum notice periods are one week for employment of less than one year, two weeks for one to three years, three weeks for three to four years, and so on up to eight weeks for eight or more years. These are statutory minimums—common law reasonable notice is typically much longer (often 1-2 months per year of service for non-executive employees).

Ontario also requires severance pay (separate from termination pay) for employees with five or more years of service if the employer's payroll is $2.5 million or more. Severance pay is one week per year of service, up to 26 weeks. Many Ontario employers fail to understand the distinction between termination pay (notice) and severance pay, leading to underpayment and wrongful dismissal claims.

Ontario-Specific Considerations

Ontario has some unique employment standards provisions. The ESA prohibits non-compete clauses for most employees (as of October 2021). Ontario requires equal pay for equal work, meaning you cannot pay temporary, part-time, or casual employees less than permanent full-time employees for substantially the same work. Ontario also has strict rules on deductions from wages—you generally cannot deduct anything without written authorization or a court order.

British Columbia Employment Standards

BC's Employment Standards Act sets minimum standards for most BC employees. Key provisions include a minimum wage of $17.40/hour (as of June 2024), two weeks of vacation for all employees (increasing to three weeks after five years), overtime pay at 1.5x after 8 hours per day or 40 hours per week (and 2x after 12 hours per day), and ten statutory holidays per year. BC provides various leaves including maternity leave (17 weeks), parental leave (61-62 weeks), and compassionate care leave (27 weeks).

Termination Requirements in BC

BC requires written notice or pay in lieu when terminating employees without cause. The minimum notice periods are one week for employment of three months to one year, two weeks for one to three years, three weeks for three to four years, and so on up to eight weeks for eight or more years. Like Ontario, these are statutory minimums—common law reasonable notice is typically longer.

BC does not have a separate severance pay requirement like Ontario. However, BC requires compensation for length of service (similar to severance) for employees terminated after three months of employment. This is included in the notice requirements above, so you don't pay both notice and severance—just notice based on length of service.

BC-Specific Considerations

BC has some unique provisions. The ESA requires employers to provide a written statement of wages and deductions with each pay period. BC allows averaging agreements that permit averaging hours over a period (up to four weeks) to avoid overtime pay, but these agreements must be approved by the Employment Standards Branch or agreed to in a collective agreement. BC also has specific rules for temporary layoffs—layoffs exceeding 13 weeks in a 20-week period are deemed terminations requiring notice.

Alberta Employment Standards

Alberta's Employment Standards Code governs most Alberta employees. Key provisions include a minimum wage of $15.00/hour, two weeks of vacation for all employees (increasing to three weeks after five years), overtime pay at 1.5x after 8 hours per day or 44 hours per week, and nine statutory holidays per year. Alberta provides various leaves including maternity leave (16 weeks), parental leave (62 weeks), and compassionate care leave (27 weeks).

Termination Requirements in Alberta

Alberta requires written notice or pay in lieu when terminating employees without cause. The minimum notice periods are one week for employment of 90 days to two years, two weeks for two to four years, four weeks for four to six years, five weeks for six to eight years, six weeks for eight to ten years, and eight weeks for ten or more years. Alberta's notice periods increase more slowly than Ontario or BC for long-service employees.

Alberta does not require severance pay beyond the notice requirements. However, like all provinces, common law reasonable notice typically exceeds statutory minimums. Alberta courts have awarded reasonable notice of 12-24 months for long-service employees, far exceeding the eight-week statutory maximum.

Alberta-Specific Considerations

Alberta allows employers and employees to agree to averaging arrangements for hours of work and overtime without government approval, making it easier to implement flexible schedules. Alberta also has a unique provision allowing employers to require employees to take vacation within ten months of earning it, rather than allowing unlimited accumulation. Alberta's overtime rules are more employer-friendly than BC or Ontario, with overtime calculated weekly rather than daily in most cases.

Quebec Employment Standards

Quebec's Act Respecting Labour Standards governs most Quebec employees. Key provisions include a minimum wage of $15.75/hour (as of May 2024), two weeks of vacation for employees with less than three years of service (increasing to three weeks after three years, not five like other provinces), overtime pay at 1.5x after 40 hours per week, and eight statutory holidays per year. Quebec provides various leaves including maternity leave (18 weeks), paternity leave (5 weeks), parental leave (up to 65 weeks), and family leave for various purposes.

Termination Requirements in Quebec

Quebec requires written notice when terminating employees without cause. The minimum notice periods are one week for employment of three months to one year, two weeks for one to five years, four weeks for five to ten years, and eight weeks for ten or more years. Quebec's notice periods are similar to other provinces but with some differences in the progression.

Quebec does not require separate severance pay. However, employees with two or more years of service can file a complaint for unjust dismissal, which is unique to Quebec (other provinces only provide this right to federally-regulated employees or unionized employees). This means Quebec employers face additional risk when terminating long-service employees, even if they provide proper notice.

Quebec-Specific Considerations

Quebec has several unique employment law features. Employment contracts and workplace policies must be available in French. Quebec prohibits certain contract terms that are allowed in other provinces, such as class action waivers in consumer contracts (which extends to employment in some cases). Quebec provides more generous vacation entitlement (three weeks after three years vs. five years in most provinces). Quebec also has unique rules on psychological harassment, requiring employers to prevent and address workplace harassment.

Federal Employment Standards

About 6% of Canadian employees are governed by federal employment standards under the Canada Labour Code rather than provincial standards. This includes employees in banking, telecommunications, interprovincial transportation, broadcasting, and federal government. If your startup operates in one of these industries, you must comply with federal standards, which differ from provincial standards in several respects.

Federal minimum wage is $17.30/hour (as of April 2024). Federal employees receive three weeks of vacation after one year (not five like most provinces). Federal overtime is 1.5x after 8 hours per day or 40 hours per week. Federal termination notice requirements are similar to provincial standards but with some differences in calculation. Federal employees also have access to unjust dismissal complaints after 12 months of service, providing more protection than most provincial employees.

Common Compliance Mistakes

Misclassifying Employees as Contractors

The most common employment standards violation is misclassifying employees as independent contractors to avoid employment standards obligations. If someone is truly an employee (you control how, when, and where they work), you must comply with employment standards regardless of what you call them. Misclassification leads to back pay for minimum wage, overtime, vacation, and termination pay, plus penalties.

Failing to Pay Overtime

Many startups fail to track hours or pay overtime, assuming that salaried employees or "exempt" employees don't get overtime. In Canada, most employees are entitled to overtime regardless of how they're paid. Exemptions exist for managers and certain professionals, but they're narrow. If you're not paying overtime, make sure you actually qualify for an exemption.

Inadequate Termination Pay

Providing only statutory minimum notice when terminating employees is a common mistake. Statutory minimums are just that—minimums. Common law reasonable notice is typically much longer, especially for long-service employees or those in senior positions. If you terminate with only statutory notice, expect a wrongful dismissal claim demanding additional notice.

Not Tracking Vacation Entitlement

Vacation entitlement accrues based on time worked, and employees can carry over unused vacation (within limits). Many startups don't track vacation accrual properly, leading to disputes when employees leave and claim unpaid vacation pay. Implement a system to track vacation earned, taken, and owing for each employee.

Best Practices for Multi-Province Employers

If you employ people in multiple provinces, compliance becomes more complex. Consider these strategies. First, implement the most generous standards across all provinces to simplify administration (e.g., if BC requires 10 stat holidays and Ontario requires 8, give everyone 10). Second, use payroll software that handles provincial differences automatically. Third, maintain separate employment contracts for each province that reflect provincial requirements. Fourth, train managers on provincial differences so they don't apply Ontario rules to BC employees or vice versa.

The Bottom Line

Employment standards vary significantly across Canadian provinces. Minimum wage, vacation, overtime, and termination requirements differ in Ontario, BC, Alberta, and Quebec. As a founder, you must comply with the standards in each province where you employ people. Employment standards are minimums—you can exceed them but not go below. Violations lead to complaints, back pay, penalties, and reputational damage. Invest in understanding the rules for your provinces, use compliant employment contracts, and implement systems to track hours, vacation, and other entitlements. By getting employment standards right from the start, you avoid expensive problems later and build a reputation as a fair employer.