How to create offer letters for employees in Canada
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 agreement).
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.
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. For more on working hours and overtime, read our guide to hiring in Canada.
- 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. To learn more about leave and statutory holidays in Canada, read our guide to hiring in Canada.
- 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):
- Employment insurance contribution (and Québec Parental Insurance Plan (for QC employees)
- Workers compensation (only required in certain industries)
- Canadian Pension Plan contributions (or Québec Pension Plan contributions)
- Vacation entitlements
- Statutory holidays
- Sick leave entitlements (not required in all provinces)
- 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 have to meet certain conditions. They must:
- Be in clear and unambiguous terms
- Have a reasonable scope and duration
- Not create restraint of trade (that is, they shouldn’t restrict the employee from conducting business activities in future)
- 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. Be warned: not all provinces and territories allow employers to issue non-compete agreements to their employees (like Ontario) and others make it difficult to enforce them through the courts (including Alberta and Manitoba). However, non-competes are enforceable in British Columbia. But to be enforceable, they need to be phrased clearly and unambiguously, tailored to an employee’s role, and provide consideration (for example, a bonus for the employee to sign it).
How to hire and set up employees in Canada in 90 seconds with Rippling
With Rippling, offer letters for employees in Canada, as well as contractor agreements, are automatically localized—no matter where your new hire is from. But that's just the beginning.
Whether you’re a Canadian employer or based overseas, Rippling can help you hire, onboard, and set up employees in Canada within minutes—either through our entities or your own.
Just click "hire" and Rippling can support your global payroll and hiring right out of the box:
- Set up a localized Canada employment agreement
- Pay employees and contractors in Canada and around the world—without waiting for bank transfers or conversions
- Tailor your policies and benefits for Canada
- Easily stay compliant with Canada overtime, leave, and minimum wage laws
- Automate nearly any payroll process with custom workflows and reminders
- Manage international employees’ time and attendance in a single system
- Build unified reports using both domestic and international HR data
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.
