How to create offer letters for employees in Canada [2024]
When you hire an employee in Canada, one of the first things you'll do is send an employment offer letter (referred to in Canada as an employment letter).
It’s crucial to get the employment agreement right: not only will it make the offer of employment and conditions of employment clear to the potential employee, it will help keep you compliant with labor laws in Canada—so you can avoid costly legal disputes and penalties.
Here’s everything you need to send a legally compliant offer letter to hire a full-time employee in Canada before starting with the onboarding process.
Canada job offer letter checklist
- Position (job title), job description, start date, and probationary period. You should explain that their suitability for their job duties will be evaluated during their probationary period. In Canada, probationary periods typically last from three to six months.
- Working hours. Outline the expected working hours and any overtime policies that the employee will be subject to. While a typical full-time employee in Canada works 40 hours a week, under Canada's labor laws, the maximum number of hours an employee can work per week is commonly 48 hours. However, this can vary depending on the province or territory, as each has its own employment standards legislation.
- Compensation & Benefits
- Compensation. Specify the employee's salary or hourly compensation in CAD, as well as any other compensation they may receive (e.g. commission, bonuses, etc.).
- Equity. If applicable, specify any equity compensation they will receive. The most common types of equity compensation for employees in Canada are stock options, restricted stock units (RSUs), and stock purchase plans.
- Vacation. The employment contract should include details about your company's vacation leave policy, especially if you offer more leave than the statutorily required vacation in that province or territory. Generally, employees working for federally regulated employers are entitled for a minimum of two weeks of vacation after completing one year of employment, three weeks after completing five consecutive years of employment with the same employer, and four weeks after working for 10 consecutive years with the same employer.
- Benefits. Benefits could be outlined in the offer letter, but be sure to address them in general terms so that if they change in the future, an amendment to the offer letter isn't required. In Canada, the following benefits are mandatory for full-time employees (though the first three aren’t usually listed out in an offer letter):
- Pension (Canadian Pension Plan or Québec Pension Plan)
- Employment insurance
- Vacation entitlements
- Statutory holidays
- Sick leave entitlements (not required in all provinces)
- Workers compensation (only required in certain industries)
- Termination policy. Clearly explain the terms of termination, including the notice that will be provided, and any conditions that may lead to termination. Note that at-will employment does not exist. The notice period required by law can vary depending on the province or territory. For example: In Ontario and Québec, employees who have worked for an employer for three months or more must receive notice of termination or pay in lieu of notice.
- Confidentiality and non-disclosure. Include in the offer of employment a clause outlining the employee's responsibilities regarding confidentiality and non-disclosure of the company's information. Non-disclosure agreements (NDAs) are considered legally binding in Canada, but they are a few important caveats:
- NDAs must meet requirements for being reasonable and of legitimate business interest
- As of 2024, some cities and provinces have passed legislation that prohibits NDAs in certain circumstances, including abuse, harassment, and sexual misconduct.
- Other key details. If there are any other key details relevant to your company's policies and procedures, include them in the offer letter.
- If the offer is contingent on any conditions—like satisfactory results from a routine background check, signing company policies documents, proof of their eligibility to legally work in Canada—then list these out.
- Request that the employee signs and returns the offer letter to confirm their acceptance of the job before their start date.
- Contact information and phone number.
- Non-compete and non-solicit agreements. Include provisions outlining the employee’s non-competition and non-solicitation responsibilities after leaving your company—but only if they’re appropriate for your employee, and permissible in the relevant province or territory. While there is no nationwide ban against non-compete agreements in Canada yet, some provinces (like Ontario) no longer allow employers to issue non-compete agreements and some other provinces make it difficult to enforce them through the courts.
Onboard employees in Canada in 90 seconds with Rippling
Rippling can help you hire and onboard employees in Canada within minutes.
Just click "hire" and Rippling will automatically:
- Generate country-specific hiring agreements
- Run background check
- Verify minimum wage and leave requirements
- Add to locally compliant overtime policies
- Send IP agreement
- Enroll in country-specific benefits
- Assign country-specific compliance training
- Order, configure, and ship work laptop
- Set up third-party apps like Slack or Zoom
- Set up single sign-on
- Configure WiFi
- Add to payroll
- Issue and ship corporate card, and apply card limits and policies
Rippling is the only platform that offers everything you need to manage a global workforce, all in a single system.
Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advise. You should consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.
last edited: August 1, 2024
