Everything you wanted to know about employee leasing…but were too afraid to ask
You’re looking to grow your company and – to do that – you want to tap into the wealth of top international talent that’s out there…but you don’t have a foreign subsidiary.
Does this sound like you?
Let’s look at employing in Canada. Now, the process isn’t quite as straightforward as hiring yourself a bunch of highly-qualified Canadians - especially if your company does not have a legal entity in Canada.
Of course, you could hire your Canadian talent as independent contractors or freelancers. While you wouldn’t be obligated to offer perks like vacation, retirement savings and benefits, those are precisely the things that attract the best people to your company.
Another very real thing to consider is that most candidates don’t want to deal with the hassles that come with setting up a business, managing invoicing or taxes, sourcing benefits for their families and so forth. What they really crave is stability, security and, yes, good perks.
So now what’s your move? Two words: Employee leasing. Let’s dig into what it is, how it works, and what it means for your business.
What is employee leasing?
Employee leasing is where you work with an Employer of Record (EOR), to legally employ international workers on behalf of your business. The EOR functions as the legal entity and employer. An EOR also handles all HR, benefits and payroll responsibilities.
So, when your international employee receives a pay stub, or any tax forms (like their T4 and T2200 in Canada), it’s the EOR’s name (not yours) that appears as the employer. But that’s the only difference for them.
You provide the guidance, resources (and more) to make that employee a productive part of your team.
How does employee leasing work in Canada?
First, you would define the job requirements, pay and responsibilities, then find your ideal international candidate.
To employ that candidate, you essentially “lease” them from the EOR by signing a service agreement to employ the talent on behalf of your business. The EOR then pays your employee and provides you with their expertise in areas like international HR compliance, benefits, taxes and employment law.
As mentioned earlier, you, as the business, still manage the employees by providing all of the guidance and management of their work. The EOR, meanwhile, operates transparently in the background taking care of the admin, taxes and payroll for the international employee.
What are the benefits of employee leasing?
Avoid the significant expense, time and obstacles of setting up a legal or tax entity.
In Canada, this can take 6 - 12 months to set up and cost thousands of dollars to create compliant contracts and policies for each province.
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Gain access to a much broader pool of highly skilled and educated candidates.
In-demand talent with hard-to-find skills have their choice of roles. Move your company to the top of their list by offering the ability to work remotely and access excellent benefits - without the hassles of managing their own billing and taxes as a contractor.
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Rest easy knowing you’re in compliance with employment and tax laws.
Your EOR should provide employment contracts and policies covering everything from working hours to protected leaves for each province. That way, you don’t have to stay on top of evolving regulations or face surprises at the end of employment.
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Outsource time-consuming and non-strategic business functions.
Your EOR gives you the freedom to focus on your business’ core strategic functions by handling time consuming but non-revenue generating functions like payroll and tax processes, as well as HR and benefits administration.
EORs should have payroll compliance professionals who can ensure your Canadian talent gets their compensation (and all relevant tax documents) without any hitches.
Is there a difference between employee leasing through an EOR, and hiring a PEO?
The short answer: Yes!
A PEO, or professional employer organization, acts as a co-employer, or partner organization. In other words, they’re not the legal employer like an EOR. Therefore, your business takes on far more responsibility in areas like employment law, paid leaves, health and safety compliance - and more.
A PEO can provide basic HR support and administer your payroll and benefits. However, you would still need to set up a legal entity and bank account in the country where you’re hiring talent.
In general, hiring a PEO is more about offloading non-core business tasks, rather than enabling your organization to legally hire international employees.
You can explore the full list of differences between EORs and PEOs by reading our in-depth comparison blog.
Bridgewater TI: Your partner in Canadian employee leasing
Bridgewater Talent Integration helps your business attract the strongest Canadian candidates with full-time permanent roles – all while you avoid the costs and hassles that can come with work visas, relocation or creating a legal entity.
Plus – with province specific employee contracts and HR policies and payroll compliance professionals, you can confidently (and safely) hire talent anywhere in Canada – from sea to sea.
Learn more about our full suite of EOR services and then let’s set up a time to talk through the right solution for your business!
