Has Remote Work Made You A Multi-Jurisdictional Employer?

COVID-19 has changed the way we work, and for many of us, WHERE we work.  And it looks like that change may be here to stay. More and more employers have announced that they intend to maintain a remote workforce, at least to some degree.  And a recent survey by Robert Half found that 33% of employees would quit their job if they are forced to return to the office. So what does this mean for employers?

Benefits of Remote Work

A remote workforce has a lot of benefits.  If your employees don’t have to come into the office that means you can hire employees from anywhere, with an even greater emphasis on hiring the best candidate for the job, regardless of where they live.  Offering remote work may also make you a more attractive employer, and can increase job satisfaction among your employees.  Employees can both live where they want to live and work where they want to work, without having to trade one for the other. remote work

Becoming a Multi-Jurisdictional Employer

As employers shift toward a remote workforce, they need to be aware that they may become subject to the employment laws of more than one province. Employers must comply with a variety of employment laws, including health and safety, employment standards and human rights legislation.  Each province has its own laws on these issues and generally those laws apply to the employees in that province.

You may be used to only having to know and follow the laws of one province.  But what happens if you now have employees working remotely in other provinces? First you need to understand which laws apply to each of your employees, and second, you need to make sure that you understand, comply with, and stay on top of all of the laws that apply.

What Law Applies?

Generally speaking, the law of the province where an employee is physically located will be the law that applies to that employee.  For example, this means that if you are a Manitoba employer but you have an employee who moves to PEI and works remotely from there, you must meet the PEI employment standards with respect to that employee.  Suddenly, you now have to worry about PEI legislation as well as Manitoba legislation.remote work

This general rule is not absolute though, and you should obtain legal advice to understand exactly which laws apply to your employees.

Employment standards legislation provides a good example.  Only Quebec, Ontario and New Brunswick have specific provisions regarding the application of their employment standards to work outside of the province.  In all other provinces, the law is silent. Judge made law helps to determine which laws apply to remote workers in those provinces.

It is also possible that the laws of more than one province will apply to an employee.   For example, in New Brunswick, the Act applies to all New Brunswick employees and employers, and it also provides that work or services may be performed in whole or in part outside of New Brunswick.  This means that the New Brunswick employment standards will apply to a New Brunswick employer who has work performed outside of New Brunswick.  If that employee is physically located in another province, that province’s employment standards may also apply.

In Ontario, the focus is on where the work is performed.  The employment standards laws apply to work performed in Ontario or to work performed both in and outside of Ontario where the “outside Ontario work” is a continuation of the work performed in Ontario.  The Ontario Act also provides that where an employee could be subject to the employment standards of more than one province, the statutory rights that provide the greatest benefit are the ones that prevail.

In Quebec, the focus is on whether the employer conducts business in Quebec.  The employment standards laws apply to Quebec employees plus employees who work both in and outside Quebec for an employer whose residence, domicile, undertaking, head office or office is in Quebec (Quebec-Based Employer) or employees who live in Quebec, but who work outside Quebec for a Quebec-Based employer.

In jurisdictions other than Ontario, Quebec and New Brunswick there is judge made law that helps to decide which employment standards law should apply.  There are a number of factors that can apply, and the factors vary from province to province.remote work

Key Take Away

As an employer, you need to be aware that there is a good chance that having a remote workforce will make you a multi-jurisdictional employer.  You cannot assume that just because the business is physically located in one province that those are the only laws that will apply.  You need to think about all of the employment-related laws that apply to your employees and determine which province’s laws will apply in each case.

It is also important to note that the current laws were written before COVID-19.  While they recognize the possibility of remote work, they were written at a time when that was the exception, and not the rule. As the workforce becomes more dispersed and remote work becomes more common, it’s likely that we will see changes to these laws.

Check out our Knowledge Centre for resources to help keep you up to date.