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Contracting Canadian Company
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Contracting Canadian Company
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We are an American company looking to subcontract work to a small Canadian company. The work would be done in Canada and delivered back to the US via electronic file. What are the legal obligations ar
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Forums » Topic Forums » Legal Forum » Contracting Canadian Company
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Contracting Canadian Company
posted at 2/24/2011 2:28 PM EST
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Posts: 2
First: 2/24/2011 Last: 2/25/2011 |
We are an American company looking to subcontract work to a small Canadian company. The work would be done in Canada and delivered back to the US via electronic file. What are the legal obligations around this? |
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Contracting Canadian Company
posted at 2/25/2011 5:20 AM EST
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
I agree there should be no HR/employment issues as long as the contract is set up correctly.
You want to avoid anything that could cause "co-employment" issues...that is sharing payrolls/benefits/etc. You should not be controlling anything about how/when/where their employees work, what the employees are paid, etc. You should just be concerned with the end product, that is delivered as per the contract and that it is paid for. It should be up to the other company to make that happen. |
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Contracting Canadian Company
posted at 2/25/2011 6:19 AM EST
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Posts: 1771
First: 10/24/2002 Last: 9/14/2011 |
"You want to avoid anything that could cause "co-employment" issues...that is sharing payrolls/benefits/etc. You should not be controlling anything about how/when/where their employees work, what the employees are paid, etc."
This would be illegal anyway, even if it was stated specifically in the contract. The employment conditions of Canadian employees working in Canada may not be controlled in any way by foreign entities. |
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Contracting Canadian Company
posted at 2/25/2011 3:27 PM EST
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Posts: 32
First: 1/31/2011 Last: 9/13/2011 |
Hi: Seems like a contractual issue. However, the Canadian indepedent contractor may have provisions re: PIPEDA's privacy provisions and the U.S. Patriot Act, which could be salient to your organization, depending on the substance of the contract.
Dave Arnold, Ph.D., J.D. |
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Contracting Canadian Company
posted at 2/28/2011 2:33 AM EST
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Posts: 1771
First: 10/24/2002 Last: 9/14/2011 |
Canadian laws apply to Canadians working as independent contractors in Canada. Canadian ICs must be paid in Canadian dollars, and Canadian tax forms/regulations apply.
Canadian laws on independent contractors vs employees are almost identical to US laws, so the dangers of misclassification are just as great in Canada as they are the US. If this Canadian person working for you as an IC in Canada wouldn't pass the IRS test for ICs, then this person has been misclassified as an IC in Canada. If you want to avoid misclassification, you'll need to put the person on a Canadian payroll and provide all legally-mandated benefits and protections. |
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Contracting Canadian Company
posted at 4/5/2011 7:31 AM EDT
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Posts: 71
First: 7/19/2002 Last: 4/5/2011 |
"We are an American company looking to subcontract work to a small Canadian company. The work would be done in Canada and delivered back to the US via electronic file. What are the legal obligations around this?"
My company is a Hong Kong based company and work we do for clients in pre-employment screening is certainly based on US law if the employee is to be working in the USA and we have found which we do from time to time bad credit situations or criminal records. We make it very clear to clients that if they are considering any adverse decisions based on our reports that we the service provider have a duty to inform the applicant that an adverse decision may be made. Not sure of what kind of work is being contracted but if it is like what we do for some Hong Kong companies hiring in the USA we assume all US laws apply and act accordingly. |
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