Which Employee Benefits Are Mandatory In Canada?

Canada is a nation of snow-capped mountains, scenic coastlines, diverse wildlife, and some very chill laws about employee benefits.

While Canada doesn’t guarantee that workers will be wined and dined in the workplace, it does set out a list of benefits that must be provided to them. These employee benefits are usually mandated by Canadian labor laws and are an important part of an attractive employee benefits package for many job seekers in the market.

What are Employee Benefits?

According to Canadian labor laws, statutory benefits refer to certain minimum employment standards. Each province has its own set of statutory benefits. In Canada, most workers are protected by these laws, while the remaining 10% have jobs regulated by the federal government. Employers are responsible for understanding and adhering to these standards. You may face a pretty hefty fine if you fail to adhere to these standards, so it is very important to keep track of them. You know what they say – you never get a second chance to make a first impression. So if you want to put your best foot forward, it only makes sense to give your workers as many employee benefits as you can afford. Furthermore, having quality employee benefits will also help you decrease your employee turnover rate. Talk about a win-win situation!

They usually cover must-haves like healthcare and pensions, plus a range of “nice-to-haves” such as flexible working and gyms. But which one of these benefits is actually regulated by law? Let’s find out!

Mandatory Employee Benefits in Canada

Pension

The Canada Pension Plan, also known as CPP, is a pension plan in which retirement benefits are paid by the Canadian government to eligible contributors. 

Every employed Canadian must make contributions to their retirement savings through the Canada Pension Plan (CPP). Employers must contribute by deducting a percentage from each employee’s pay. Employer contributions are calculated based on the employee’s salary and the amount can vary from year to year. 

A few employees are exempt from this, such as those who make less than $3,500 a year. In return, employees are entitled to retirement pensions, survivors’ benefits for children and widows, and some disability benefits. Beneficiaries of survivors’ benefits can receive either a lump-sum payment or a monthly benefit. When an employee turns 65, the amount of pension they receive is determined by how much they made in their working years and how many hours they worked. Survivor benefits are available if you have made CPP contributions for at least one-third of the contributory period or 10 calendar years. 

Employment Insurance

For most people, the benefit level is 55% of an employee’s average insurable weekly earnings, up to a maximum amount. As of January 1, 2020, the maximum yearly insurable earnings amount is C$54,200, which means that an employee can receive a maximum amount of C$573 per week.

The maximum benefit period ranges from 14 to 45 weeks. A worker’s unemployment compensation is determined by the regional unemployment rate, as well as his or her accumulated hours over the previous 52-week period, or since their last claim — whichever is shorter.

The recipient of an employment insurance benefit may receive income replacement benefits as a result of:

• Illness
• Pregnancy
• Parental leave
• Compassionate care leave

Paid Time Off

The amount of time-off an employee receives differs according to the Canadian province they’re located in. For example, in British Columbia, employees are entitled to 2 weeks paid vacation after 1 year of employment and 3 weeks paid vacation after 5 years of employment. And this figure excludes the 10 national statutory holidays. It is the employer’s responsibility to ensure that the employee takes the minimum amount of vacation per year. 

The number of paid vacation days in Canada is the lowest among developed countries (10 compared to 30). So if you’re looking to attract and keep the best employees—or even find great new ones—let your vacation days speak for themselves. Give your employees the well-deserved break that they deserve! Aside from having an awesome time, they’ll come back to work well-rested and energized, allowing them to make you proud. And if you are worried about tracking all those leaves, just give Vacation Tracker a try to make all your leave tracking problems go away. That’s a promise! Try it free for 7 days today.

Next is money. Salaried employees get paid time off with full salary continuation, whereas hourly employees get 4% of their earnings as vacation pay. If you’re looking for more information regarding leaves in your country, check out the Leave Laws section of our website!

Sick Leave

The number of paid days for sick leave or family responsibility leave varies slightly from province to province. Employees can receive up to 5 unpaid days for sick leave or family responsibility each year in British Columbia and Alberta. The Canadian Labour Code also includes 3 paid days after an employee has worked for the company for three consecutive months. Employees can also take other leaves, including:

• 10 unpaid days of domestic violence leave
• 3 unpaid days of personal injury or illness leave

Healthcare

Your employee benefits program in Canada should include supplementary healthcare coverage. In Canada, 87% of employers provide an extended health insurance plan to supplement the government’s health insurance program.

• 73% of employers pay the entire premium
• 49% of employers offer extended health care to hourly workers
• 74% pay 100% of the premium

Health benefits provided by employers are often insufficient for many employees, usually. From supplemental vision insurance to dental care coverage, there are a number of employee benefits that can fall through the cracks when offered by employers with only the bare minimum in mind. 

So, make sure to include extended health care options in your employee benefits package. Offer a variety of additional benefits, such as prescription drug coverage, hospitalization, paramedical practitioners, and out-of-country coverage at varying levels, depending on the size, demographics, and industry of your company. Good luck, you got this!

Take the guesswork
out of time off tracking.

Know exactly who's off and when—no spreadsheets, no surprises.

Sign up for free

No credit card required.