The Remote Employee Conundrum

At the height of the pandemic, as remote work was solidifying its prevalence and people were finding themselves able to work from any location, many employers had to decide whether they would be willing to let employees move to an entirely different province and work from home there.

Fast forward to 2023 and having remote employees is no longer a novelty. Not only do many employers let employees “move around the country”, but they also initiate new employment relationships with out of province employees.

Both situations create an interesting challenge for employers and employees alike: which provincial legislation will apply when each party resides in different provinces?

Unless you have a crystal-clear employment agreement in place the answer to that question is usually “it depends”.

If that doesn’t sound definitive enough for you, you’re not alone. Case law and provincial legislators are slowly settling some of these questions, but the current state can only be described as “clear as mud.” The problem stems from laws which were created when interprovincial work was primarily limited to truckers working across multiple provinces and most people went to a physical office to conduct work. But the pandemic and technology accelerated the change in work habits and the law has yet to catch up.

First, let’s be clear that this is not about payroll or taxation – those situations can be confusing too but at least Revenue Canada does have some clear guidelines for employers on that question.

For employers the challenge is in figuring out which employment law does the employee fall under because this would have direct implications for sick days allowance, statutory holidays, minimum wage, severance calculation, overtime calculation, and so much more.

To make matters more confusing, some provincial legislation may conflict with another province’s legislation. For example, Quebec Labour Standard (LSA) states that when the work is done outside of Quebec, the LSA will apply if the employer has a work location in Quebec and the employee lives in Quebec.

Ontario’s Employment Standards Act (ESA) applies when the employee’s work is to be performed outside Ontario but the work performed outside Ontario is a continuation of the work performed in Ontario.

Alberta’s Employment Standards Toolkit for Employers states that the contract between the parties may specify the law that will apply, if explicitly stated, thus essentially leaving it up to the two parties to decide.

BC’s Employment Standards first looks at the employment contract and then considers whether there is a connection between the employment and the province.

I bet you’re beginning to see the challenges this can create. An employee who lives in Quebec and works remotely for an Alberta based organization which has an office in Quebec, may be subject to both provincial jurisdictions, and one might run afoul of the other. Confused? No doubt.

So, what’s an employer to do when faced with this dilemma?

To start, if hiring an out of province employee, be sure to have a clear employment agreement between the employer and employee which stipulates unambiguously which provincial laws shall apply and spell out key areas such as termination entitlements.

If an existing employee wants to move to another province and work remotely from that location, you should consider modifying that employee’s existing agreement and spell out which provincial legislation will apply. This would mean drafting a new agreement or modifying an existing one, and providing some additional consideration to ensure that agreement can be enforced.

Your Engaged Assignment: Are you considering hiring an out of province remote employee? Perhaps you have a current remote employee who wishes to move to another province? Be sure to review your existing employment agreements and include explicit language to cover key aspects of the employment relationship and which provincial legislation will govern the relationship. As always, we are here to help support you in navigating through these complexities.