Employment Contract Requirements in Canada

Backdating, currencies, and classifications.

Updated on November 15th, 2022

Can employment contracts be backdated in Canada? 

We do not recommend backdating employment contracts. The best practice is for you and your supported employee to sign the employment contract before the supported employee starts working. 

Can a supported employee work before their start date?

To minimize liability, your supported employee should not begin working before their start date or before employment contracts are signed. If it is absolutely necessary that the start date be modified, please submit a ticket using the Help widget at the bottom of the page to reach out to your Client Account Manager or Velocity Global representative to discuss options.

Can we pay the salary in a different currency than the local currency?

Your supported employees in Canada must be paid in Canadian dollars (CAD). Salaries cannot be paid in United States dollars (USD) or any other currency.

Should we classify our talent as a contractor or an employee?

In simple terms, classification status comes down to whether the individual is in business for themselves or under your company's control. If the individual is under your control, it is safer to classify them as an employee on either a permanent or fixed-term basis. 

Specifically, courts look at many factors to determine whether an individual is an employee or a contractor, including the following: 

  • Whether or not the individual exclusively provided services to the company
  • The degree of control the company had over the individual’s work (including where, when, and how to perform the work under the employment contract)
  • Whether the individual was required to supply their own tools and equipment
  • Whether the individual hires their own helpers to complete necessary duties
  • The degree of business risk taken by the individual (e.g., their chances for profit and risk of loss)
  • The degree of integration between the individual’s activities and the company’s business

A third category of “dependent contractors” also exists in Canada. The distinction between “dependent” and “independent” contractors focuses on economic dependence, meaning the courts will assess whether the individual was economically dependent on the employment contract  to determine whether this third category is appropriate. For more information about classification, please submit a ticket using the Help widget at the bottom of the page.