Updated November 2026
To hire employees in Canada as a startup, you can incorporate or register a Canadian company and run payroll yourself, or employ people through an employer of record (EOR) provider until you are ready. The rules that matter most come from the province where the employee lives, and in Quebec that includes French language obligations for offers, contracts and workplace documents.
The province decides the rules
Canada has no single employment code for most private employers. Each province sets its own standards for vacation, public holidays, overtime and termination notice, while federal rules cover federally regulated industries such as banking and telecoms. A software startup typically falls under provincial law.
So an Ontario hire works under the Employment Standards Act, and a Quebec hire works under Quebec’s labour standards and its Civil Code. Payroll differs too, because Quebec has its own tax administration and its own pension and parental insurance plans.
For the talent side, see our guide to hiring in Toronto.
Worked example: first engineers in Toronto and Montreal
Illustrative. Maya runs a US Series A startup in New York. She wants two backend engineers, and her best finalists are Priya in Toronto and Daniel in Montreal. She has no Canadian company.
Maya picks an EOR. Two hires do not yet justify a Canadian entity, and the EOR can employ both under the right provincial rules. She asks early how her US option plan will work for Canadian employees, because the tax treatment differs and her lawyer needs to review it.
No at-will, and why the termination clause matters
Canada has no at-will employment. Ending employment without cause requires notice or pay in lieu, and courts can award “reasonable notice” that goes well beyond the statutory minimum unless the contract limits it clearly and lawfully.
Ontario courts read termination clauses strictly, and a clause that falls short of the Employment Standards Act in any respect can be struck out, leaving the employer facing common law notice. Maya asks the EOR to confirm Priya’s termination wording was written for Ontario, not adapted from a US template.
Ontario has also banned non-compete clauses for most employees, so Priya’s contract relies on confidentiality, IP assignment and non-solicitation instead. Rules like these change and depend on the facts, so confirm the details with a Canadian employment lawyer, an accountant or your EOR provider before making offers.
Quebec and the French language
Quebec’s Charter of the French Language covers the workplace, and recent amendments known as Bill 96 tightened it. In practice an employer needs French versions of job postings, offers, employment contracts and workplace documents such as policies. The parties can agree to be bound by an English contract only after the employee has received the French version and expressly asks for it.
The point founders miss is the language requirement in the job ad itself. Under the Charter, an employer should not require knowledge of a language other than French unless the role needs it and the employer has taken reasonable steps to avoid requiring it. An English-speaking team can still hire in Montreal, but should be able to justify why English is needed.
The French paperwork adds lead time on the Montreal side, so Maya starts it as soon as Daniel says yes. To plan both searches, try our hiring timeline estimator.
What Canadian candidates look at in an offer
Public health care is provided by each province, but candidates commonly expect a supplementary group plan covering things like dental, vision and prescriptions. Ontario and British Columbia have both introduced pay transparency rules that, for many employers, mean advertised roles must include a pay range, so check the rules before you publish.
Where Funded.club fits
We are a fixed-fee recruiting partner for funded startups and fast-growing teams across North America, Europe and APAC, and since 2019 we’ve helped 500+ startups from Seed to Series D. Our fully remote recruiters can search anywhere in Canada while your entity or EOR handles the employment.
One dedicated recruiter runs each search end to end, with first screened candidates within 7 days and 33 days on average from kick-off to hire. Our fee is fixed upfront, averaging 6 to 9% of salary against the 20 to 25% typical of contingency recruiters. Illustrative: if Maya’s engineers each fall in our up to $110,000 band, the fee is $7,500 per hire. Part is an advance and the balance when the candidate accepts, and if we don’t deliver a shortlist of at least 3 qualified candidates within 30 days, you can claim the advance back in full. See our pricing page.
Frequently asked questions
Can a US startup hire employees in Canada without a Canadian company?
Yes. An employer of record (EOR) provider can employ the person, run Canadian payroll and issue a contract that follows the employee’s province.
Is employment in Canada at-will?
No. Employers ending employment without cause must give notice or pay in lieu, and common law notice can exceed the provincial minimum unless a well-drafted contract limits it.
Do employment contracts in Quebec have to be in French?
Under Quebec’s Charter of the French Language, contracts, offers and workplace documents must be provided in French. An English contract is possible only if the employee expressly asks for it after receiving the French one.
Which employment rules apply to a remote employee in Canada?
Generally those of the province where the employee works, unless the business is federally regulated.
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