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Get ready for these employment tips for small business owners! They aren’t just your run of the mill tips, but tips through the legal lens from our friends at Goodlawyer. That’s right, these are the kinds of tips that can help protect your business.
Read this first! The tip above all other tips.
Although we chatted with a Lawyer in Residence from Goodlawyer, please note that this episode of the Wagepoint Success Series is not meant to be legal advice. It’s always best to seek counsel and have your own lawyers review any documentation or give advice for your business.
So, the tip above all other tips from this episode of the Wagepoint Success Series is to seek legal counsel to make sure your business is protected.
Meet the panelist.
Pauline Chan, Lawyer in Residence, Goodlawyer
Pauline has over a decade of legal experience helping businesses of all sizes, from sole-proprietors to multinational corporations. She also has experience owning and running her own barre and yoga studio, giving her first-hand experience of what it takes to help your business succeed.
Now that we know our expert, let the tips begin!
Tip #1: What to consider before you hire any employees.
As your business grows, you’ll want to hire employees, or more employees if that’s your scenario. The more hands to help with making the business magic happen, the easier it is for you as a business owner to do what you love best. But, before you do that, Pauline recommends taking a moment to take care of a few things first.
To start, it’s good to have documentation outlining founder roles, exit plans and so forth. This protects you for when roles start shifting and for the potential that founding members may depart. Although no one wants to think of that in the “honeymoon” beginnings of a business, aspirations and relationships do change, so it’s good to be prepared for that.
👉 To hear Pauline go into more detail about this, go to timestamp 7:34 in the video.
Tip #2: The hiring process through the legal lens.
A simple version of the hiring process would be: Make a job posting, review resumes, interview candidates, hire the best ones. Pauline, however, has some other items she recommends keeping in mind.
Things to prepare for during the hiring process include:
- Terms and conditions — Consider the differences between full-time and part-time employees, what they receive per government mandates and also how you’re going to treat those roles within your company.
- Tools and equipment — Is your company providing equipment such as cell phones or laptops to your employees? What are the parameters around that?
- Location — Is it an in-office location, hybrid location or remote work environment?
- Pre-conditions — Background checks, certifications, fit for duty requirements and immigration paperwork would all fall under this, for instance.
“You want to make this all clear in advance, so if, for example, you need to know that they have that very specific certification before you can bring them on, then the contract needs to reflect this.”
— Pauline Chan, Lawyer in Residence, Goodlawyer
👉 Head to timestamp 10:30 for deeper insight into how legal plays a role in hiring.
Tip #3: What to include in employment agreements.
Employment agreements are the foundation of understanding between you and your employee. They set out the expectations of their role and how they will perform for your business. Pauline recommends including the following in agreements:
- Job description (Side-Tip! Make sure you’re addressing how the job might change as your business grows.)
- Compensation (wage, bonuses, benefits, allowances, and so on)
- Probation, resignation and termination stipulations (Side-Tip! Having a lawyer review these sections of the agreement is a big part of protecting your business!)
- Expenses, training and equipment
- Protection of your company assets
👉 For more of Pauline’s tips on employment agreements, go to timestamp 14:30.
Tip #4: Protecting your company’s assets.
Whether it’s intellectual property, confidential information or other things like that, how you’re going to protect your company assets is a big part of the hiring process.
Think about it. Something as simple as having a clear outline of who is in charge of what information and how sensitive data is handled ensures that your assets are safeguarded. Even noting that all work done by an employee for your business belongs to your business also falls under this area.
Pauline does note that things can get a bit tricky with contractors coming into the mix because they don’t have the same connection to the business that an employee would. But, that’s not to say that you can’t have a section in your contract with them about not sharing any proprietary details.
👉 Timestamp 19:43 is where you want to be for more on protecting your company’s assets.
Tip #5: The legal implications of employees and contractors.
While employees and contractors may both work for your business, there are specific legal differences between these two types of workers. For instance, employees are entitled to things like vacation time and hours of work, whereas a contractor is not.
“There’s specific markers that the law looks at to determine whether somebody is truly an employee or truly a contractor.”
— Pauline Chan, Lawyer in Residence, Goodlawyer
One of the key ways to protect yourself as a small business owner is clearly outlining in your contract whether the person is an employee or contractor. If you don’t, you won’t have a say in what category the person falls into and an entity like the Canada Revenue Agency may reclassify them.
👉 For more legal insight on employees and contractors, go to timestamp 23:50 in the recording.
👉 Wagepoint’s Employee vs Contractor: A Mini Guide for Canadian Small Businesses includes a handy-dandy chart to know the differences between the two.
Tip #6: Different ways to compensate employees.
When it comes to compensating employees, you’re probably thinking of making sure their pay cheque gets to them on time. Pauline shed light on a few different ways employees might be compensated for their work and broke it down into two categories: Traditional compensation and Equity compensation.
Traditional compensation covers things like : Wages, bonuses, benefits and so forth. From a legal perspective, compliance in this area falls under the area of Employment and Tax laws.
Equity compensation covers things like ownership stakes or deferred value (this is a fancy term for, say, buying stocks in the company that later become shares). Compliance at play here falls under Corporate, Securities and Tax laws.
👉 Skip to timestamp 27:30 to take a closer look at the different ways to compensate employees.
Tip #7: The importance of company handbooks.
Company handbooks are the task left behind, as Pauline calls them. She gets it. When you’re a small business owner, getting caught up in the operational side of business happens. All the same, she highly recommends tackling the company handbook sooner rather than later.
“Company handbooks really come in handy because this is an area where you’re going to want to set out a million and one other policies that can apply to the employees’ employment with you. And the company handbook is going to be easier for you to change from time to time versus changing the employment agreement every single time there’s a change.”
— Pauline Chan, Lawyer in Residence, Goodlawyer
Here are a few key policies she recommends for your company handbook:
- Expense (reimbursements, for instance), benefits and allowances
- Use of IT resources and facilities (This can protect your business from malicious attacks like ransomware!)
- Privacy (Note: By law, you are required to have a privacy policy!)
- Harassment and discrimination
- Progressive discipline and performance management
- Core work hours and overtime (Keep in mind government regulations at the provincial/territorial level!)
👉 Get all the details on company handbooks by starting at timestamp 29:53 in the recording.
Tip #8: The legal implications of hybrid, virtual and traditional workspaces.
Each kind of workspace has its own legal implications. When you have on-site employees in a traditional workspace, that might be clearer. But there are also responsibilities an employer has when they have remote/virtual and even hybrid employees.
These are some of the key considerations Pauline outlines for us.
- Employment laws — Knowing what laws apply at what time, to whom and in what way keeps your business compliant.
- Tax implications — Where your employee works makes a difference in taxes collected
- Insurance — It’s important to check with your insurance broker what coverage you have in these various situations.
And, once again, it’s important to include the employment type — hybrid, virtual or in-office — in employment agreements and company policies.
👉Pauline goes in-depth on this topic starting at timestamp 41:18 in the recording.
Tip #9: Covering all your bases with terminations.
The very first thing Pauline wants to make clear about terminating an employee in Canada is that there is no “at-will” employment, like there is in the US. She explains what “at-will” means.
“Essentially that just means they can terminate you, and they don’t owe you anything. There’s no notice required. In Canada, that’s not the case. Notice is required whether it’s two, three, four, five, six, seven, eight weeks depending on the employment legislation in your province. Or it can also be termination pay in lieu of notice. So instead of having you hang around my office for two weeks when I need to let you go, I’m going to pay you out the two weeks.”
— Pauline Chan, Lawyer in Residence, Goodlawyer
Pauline says most people go with the latter option of paying out the employee, and it’s often to protect the business and, again, its assets. It’s not as simple as just picking out an amount and sending the person on their way, however. There are many factors that go into it.
“It can be a very complicated area. If you talk to a lawyer in advance, we can set these things up so that it runs just that little bit more smoothly.”
— Pauline Chan, Lawyer in Residence, Goodlawyer
👉 Pauline also covers termination with or without just cause and termination entitlements. Start at timestamp 47:30 for this section of the webinar.
Tip #10: Other legal considerations.
Consider this a bit of legal potpourri. Other legal items that you’ll want to consider and discuss with counsel include minimum employment standards (which are required by law!), health and safety in remote workspaces and upholding human rights within your company for all employees, whether in-person, remote or hybrid.
👉 Check out timestamp 52:02 for Pauline’s overview of these and other topics.
The experts can take it from here.
We get it. Legal stuff can be daunting, but that’s why there are experts out there like Pauline who can help. If you’re looking for advice on anything that was covered in this episode of the Wagepoint Success Series, it’s a good idea to bring in a professional who can bring clarity so you have peace of mind knowing your small business is covered.
👉 Believe it or not, Pauline had a lot more to say about each of these tips. Feel free to watch the video to get the full scope of what she shared!
Don’t forget to tune in for the next episode of the Wagepoint Success Series! Keep an eye out for a link to register and bookmark the Wagepoint Events page.
👉 Wagepoint’s Epic Guide to Employee Management can get you on the right foot with managing a stellar team.
About the Wagepoint Success Series.
The Wagepoint Success Series is a celebration of the entrepreneur experience, including the thrills, challenges and moments of inspiration that all come with being a small business owner. We hope that you’ll join us each month as we gather movers, shakers and disruptors — from all industries and backgrounds — for valuable insights, fearless exploration and engaging discussion. We look forward to being able to connect, learn and discover what it means to find small business success, together.
The advice we share on our blog is intended to be informational. It does not replace the expertise of accredited business professionals.
