If you’re a person working in Canada, doing business, or looking forward to finding employment in Canada, you must have surely heard of the many employee benefits Canada has.
Moreover, as an employer or an employee, it is your duty to be well aware of the many benefits that Canadian employees are entitled to so that you remain compliant with the employment laws of the country.
As an employee, you must ensure that you are not being deprived of any benefits, while as an employer, you must ensure all your employees are receiving all sorts of benefits, as it will help you maintain an active and productive workforce.
However, with the abundance and variety of employee benefits that Canada provides, with the many variations in the benefits package across provinces, understanding which benefits are available to you and which are not is becoming a very confusing process.
But don’t worry! In this blog, we have compiled all that you need to know about employee benefits that Canada offers in the simplest and most understandable form.
1. Introduction to the Employee Benefits that Canada Offers
Canada has several employment benefits that the employees working under any organization are entitled to. These benefits are ensured by the employment laws of the country, and every employer of every organization is legally required to provide their employees with these benefits. Failure to comply with these laws on the part of the employer usually leads to legal action.
Some of the benefits that Canadian employees are provided are mandatory by law (thus, called mandatory benefits), whereas there are several other supplementary employee benefits in Canada as well. Some of the employment laws vary in different provinces of Canada. This means the statutory benefits that employees in Canada are entitled to are dependent on the laws of the province they are working in.
However, most of the mandatory benefits remain the same across the country. Employers in Canada can prepare benefits packages that are applicable throughout the country.
2. Who Can Enjoy These Benefits?
All full-time employees in Canada, irrespective of their race, gender, nationality, etc. are entitled to the mandatory employee benefits in Canada guarantees by the law of the province they are employed in.
3. Why Should You Provide Employee Benefits?
While employees are entitled to certain benefits which are mandatory by law, many employers also provide several supplementary benefits in addition to the statutory benefits.
Providing such benefits is a brilliant idea to attract new and innovative talent and retain skilled staff on the team for a long time. Good-quality employees are more likely to continue working with an organization if they are satisfied and happy with the benefits package they receive.
It is, therefore, a smart idea to provide not only mandatory benefits to the employees working in your organization, but also provide them with other supplementary benefits, as you would be able to retain good and skilled employees and prevent them from leaving your organization and joining your competitors.
This way you can have a workforce that is happy and content, and it will also boost their morale, and motivate them to work better.
If you provide benefits other than those ensured by the law of the State, which your employees would not be able to find elsewhere, then they would be more inclined to continue working with you.
Some examples of these benefits include, gym memberships, paid leave days, etc. Such benefits help create an environment that is positive, collaborative, and also productive: all of which will benefit your organization in the long run.
The benefits that you provide your employees paint a picture of your organization in the public’s eyes. It helps you gain committed employees.
All in all, providing employee benefits is a good way to ensure a committed and hardworking workforce who will continue working for you for a long time.
4. What Are Mandatory Employee Benefits?
Now that you have a general idea of what employee benefits are and how are they beneficial for your organization, let’s get to know about the benefits which are mandatory by law.
As mentioned before, mandatory benefits, which are otherwise also known as statutory benefits are those benefits, which employers are legally required to provide their employees. In Canada, The Employment Standards Act, which establishes the rights of both employers and employees, primarily governs these benefits. These benefits may vary from one province to the other but are most common across the country.
Here are the mandatory employee benefits inCanada offers its employees during their employment.
One of the mandatory employee benefits in Canada provides includes having a pension plan. Both employers and employees, contribute a specific amount to a statutory pension plan known as the Canada Pension Plan (CPP). The Canada Pension Plan is a mandatory and statutory pension plan for all those employed within the provinces of Canada.
The CPP Premiums are increased every year between 2019 to 2023. During this time, it is not just the employer who would be contributing up to the maximum, but the employee too. Companies are not allowed to contribute more on part of their employees. Both have to contribute a specified amount.
While the pension plan is the same throughout the country, Quebec Pension Plan (QPP) follows the same rules as the CPP but with different rates.
As of 2022, the contribution rate in the QPP is 10.8%. Both, contribute 5.4% of the employee’s salary. This rate will gradually keep increasing from 2019 to 2025.
You can start earning from the Canada Pension Plan as early as the age of 60, or it can be deferred up to the age of 70. No matter how many contributions you make to the plan for any amount of time, you are eligible to claim these benefits, as there is no minimum contribution amount to receive these benefits.
The CPP and QPP are among the most beneficial employee benefits in Canada provides, as they help safeguard your future. The CPP is a taxable benefit. It is meant to replace a part of the employee’s income upon their retirement.
4.2. Paid Time Off
This is another of the much-appreciated employee benefits in Canada provides. All Canadian employees are offered a specified paid time off. The amount of time off that the employees can receive, however, depends upon the province where they are employed.
According to the federal law of Canada, a minimum of two weeks of paid leave is a mandatory provision for employees with at least one year of employment. The amount of time for which an employee can take off usually increases with the amount of time you have been employed with a particular company. For example, after five years of employment, the minimum of two weeks of paid leave can increase to three weeks, and so on.
Some provinces of Canada enforce a minimum on the percentage of payment that the employees receive during their paid vacation. Those employed in Quebec for at least three years regularly are allowed three weeks of paid vacation.
4.3. Maternity Benefits
Under Canadian employment law, expecting mothers, including surrogate mothers, are given paid maternity or paternity benefits. It can only be availed by those who are away from work because of pregnancy or because they have recently given birth. These benefits cannot be shared between parents.
Biological mothers, including surrogate mothers, can receive paid benefits for up to a minimum of 15 weeks. While some provinces may allow a longer period of maternity leave, a minimum of 15 weeks is usually provided across the country.
4.4. Parental leave
People receiving maternity benefits are also entitled to the benefit of taking parental leave. This benefit is usually available to those employees who have recently become a parent to newborns or adoptive parents. Those who have recently become parents are allowed to take a minimum of around 6 months of shared parental leave. This is available for both new mothers as well as fathers.
This leave can be taken by new parents whenever they want, consecutively or separately, as long as they want. However, it is granted within a year of the child’s birth.
Employees can make a choice between standard or extended leave. While the standard leave lasts up to 52 weeks (12 months) the extended leave lasts up to 18 months.
Tip: Compare the benefits of extended leave with the benefits of standard leave before you apply for either of them.
During this time, employees receive payment from government programs which are funded by taxes and other forms of social contributions. However, employers can provide additional payment to their employees during this time, if they desire to do so.
4.5. Paid Sick Leave
In addition to the paid time off, employees in Canada can take up to 10 days of paid sick leave per year, per the Canada Labour Code.
4.6. Critical Illness Leave
Critical illness leave can be taken by employees to take care of or support a critically ill minor child or adult family member of the employee who is suffering from a life-threatening illness. For this, a qualified healthcare professional must issue a certificate stating that the child or adult is critically ill and would require the care and support of a family member. The certificate must also state the period for which the critically ill person needs care and support.
An employee can take this leave for up to 9 months if caring for a sick child, and up to 4 months if caring for a sick adult. In case an employee has to take care of two or more sick children, then they are eligible to take separate 37-week leaves for each child.
4.7. Employment Insurance Contributions
4.7.1. What is Employment Insurance?
The Employment Insurance Program in Canada supports unemployed workers. They are provided income, while they look for other employment opportunities or upgrade their skillset.
4.7.2. Who Can Benefit from Employment Insurance
Employment Insurance benefits can be claimed by employees who have taken time off from work as a result of
- Pregnancy or maternity
- Parental leave
- Caring for a critically ill person
4.7.3. How Much Can We Benefit from Employment Insurance?
Usually, employees receive a benefit of about 55% of their weekly earnings which can be insured. As of 2022, the maximum insurable earning is about 60,300 Canadian dollars per year, meaning an employee can receive C$ 638 per week.
4.7.4. For How Long Can We Avail of These Benefits?
Employees can avail of these benefits from around 14 to 45 weeks. This depends upon the unemployment rate in the region, and the number of hours of employment in the preceding 52-week period.
5. What are Supplementary Employee Benefits?
Other than the mandatory employee benefits in Canada provides, that an employer must provide employees, some employers provide their salaried employees other benefits in addition to those that are mandatory by the law of the province.
These perks are intended to attract the good quality of employees and motivate the existing employees to work better.
These benefits could include profit-share opportunities, gym memberships, fitness programs, wellness programs, yoga classes, etc.
Several employers also buy fitness wearables and provide health risk assessments as part of the healthcare coverage.
Extended Health Care is also one of the most sought benefits in the additional benefits packages by employees. Employees in Canada usually seek healthcare coverage as an additional benefit in their jobs. This involves covering the expenses of drug prescriptions as a part of the employees’ healthcare coverage.
Healthcare spending accounts are also part of the supplementary healthcare benefits that are sought out by Canadian employees.
6. Additional Note: Health Insurance
The healthcare system of Canada is publicly funded. This means the healthcare system of Canada is set up in a manner that is designed to meet all the expenses of healthcare from a publicly managed fund.
Because of this, there is no provision for a mandatory benefit of health insurance or additional health benefits that an employee can receive from an employer or that an employer has to fund.
However, in various organizations, employers provide employees with private health insurance under additional or supplementary benefits packages. This depends on the industry you’re employed in.
Tip: Make sure to research health insurance benefits, health benefits, and other such benefits employers are giving as part of the supplementary benefits of your employment.
If you’re looking forward to working in any company, make sure that you get to know about the benefits that it provides its employees. Any company that is on the lookout for good employees and wishes to keep them on a long-term basis, would value their employees’ desires and try to create an environment where their employees would continue.
Make sure that you’re availing of all the employee benefits in Canada provides and other additional benefits.
Now that you’re aware of the benefits that you must avail yourself as an employee in Canada, here’s to having a happy and satisfactory work life!