You can't hack HR, Finance, and Law

On a pretty regular basis we meet business leaders who are what we would call "business hackers."  This isn't a good thing or a bad thing, but more of a mentality we see in people.  We call them business hackers because they try to hack certain functions of their business.  We think that hacking these functions makes complete sense - up to a point.  When businesses start to grow and the complexities begin to mount, it's time to replace those hacks with legitimate services...or better hacks.  This is where we see most business hackers stumble.

Here's a situation that we see all the time.  A couple entrepreneurs start a business.  They use a common online platform to set up their business.   They have some success and make some money, and then they use a full-service online finance/accounting platform to manage their books. Hey, we've got financial statements. We're a real business!  Success continues and the company then uses an online HR platform to manage their HR function.  The company has duped themselves into thinking that they have Legal, Finance, and HR.  These platforms are getting paid monthly and are never going to be the ones to say to their clients "you've outgrown us, time to find someone new."

But what happens when the business really starts to grow.  What happens if they want to raise money, or convert their entity, or create an investor deck, or terminate an executive, or enhance their culture?  This is when things start to get a little messy.  The 800 number that you usually dial, and the PoliSci grad-turned-business advisor that you usually talk to probably won't be able to answer to your questions.  This is where the breakdown starts.  This is where we advise you to Get Suitless.   Or please just get someone, because you can't hack HR, Finance, and Law.  

As on of our partners puts it so eloquently:  "I can hack law because I practice it daily, I have the law degree, I have the masters in law, and I have the years of experience.  You can't. And that guy on the other end of the 800 number DEFINITELY can't."

I'm a U.S. Company and I want to hire a Canadian. Help, eh?

We see it all the time.  We're working with a U.S. based company and a request comes in from someone there letting us know that they want to make a new hire.  But this isn't just any new hire, it's a special new hire.  It's an international new hire.  And the worker that this company wants to hire lives in Canada.  "Where do we start" they ask....

We've put together a bit of a checklist/reality check that you can use to get the ball rolling on bringing on board your new Canuck.  Note that this is just a starting place, and not an exhaustive list, when it comes to what you should or shouldn't be doing in order to employ your new Neighbor to the North.

Here's where to start:

• Gather Information - This might be the most important step in the process.  Find out as much as you can about this new worker.  What province do they live in? What province will they be working in? What exactly will they be doing? Where will they be doing it? Are they a Canadian citizen or just living in Canada? Do they have employment authorization?

• Determine Employee Vs. Independent Contractor - This can be a confusing step.  Much like U.S. workers, you'll need to determine if the work this person is doing qualifies them as an employee or an independent contractor.  Canada's version of the IRS (the CRA) can be helpful in figuring this out.  There are also different rules for those in Quebec.

• Employee -  If they're an employee, you'll need to figure out how to employ them in Canada.  Have you set up an entity in Canada? That's one option.  Can you employ them through a payrolling company in Canada? That's another option.  Can you register for a business number and and set up a payroll deductions account? There's a third option. Regardless of what you do, you're going to need to withhold Income Tax, Canadian Pension Plan (CPP) withholdings, and employment Insurance (EI) for your employee (and pay on behalf of the company as well).  You'll also need to have the employee fill out some forms and you'll need to register with the WISB.   

• While employment law in Canada is primarily provincial/territorial, Canada does have an Employment Standards Act - the ESA - that covers most employees (and most provinces/territories like to follow it). U.S. folks can think of this as bits of the FLSA, OSHA, and NLRA wrapped up in a neat box with a red maple leaf stamped on it. 

• Contractor - If your worker is an independent contractor you'll need to have them sign a W-8BEN or a W-8BEN-E and keep it on file.  Remember, no W9 because they're not going to be issued a 1099.  Banking info is needed, and remember, because your worker will be using a Canadian bank you'll need their SWIFT number and account number (sorry Yankee, no Account and Routing number in these colder parts of the world). 

• Paperwork - Next we need to figure out how we are going to "paper" this person.   Do you have an agreement in place with this person? You should.  Has it been localized to where they live? Does it need to be in English and French?  If they're an employee we should probably put an offer letter in place and include things like: their rate, when they're paid, what they'll be doing, when they start, time off, benefits, etc.  

• End of Year - You'll need to figure out what sort of end of year documentation your employee or contractor will need.  Do we need to issue a T4 or T4A? 

• Termination - Need to terminate your employee? Make sure you provide them with a Record of Employment!

There are also different and unique rules depending on what province you're in and sometimes what City your person is in.  And remember, special attention should be always be paid to Quebec. 

Keep in mind that just like the IRS, the CRA doesn't look kindly upon any companies, international or domestic, that misclassify employees as contractors.  

Is Washington DC Really Business Friendly?

There are plenty of reasons to do business in Washington, D.C. The growing populace, The federal government, lobbyists, the vast number of associations, and the burgeoning startup scene.  But is DC really business friendly? When it comes to laws and regulations in the District, some would argue that it is not. Or at least not as business-friendly as other states and cities.  The most recent example of a local law that will have an impact on the business landscape is the Wage Theft Prevention Amendment Act of 2014.  This law is similar to Wage Theft laws in other cities, but the administrative burden that it imposes on small businesses can be challenging.  With the law set to go into effect in Mid-December, employers will be expected to comply with the law within 90 days of its effective date.  What does compliance entail, you ask? Here's a brief overview of notice requirements:

• That a notice be provided to your employees;
• The notice be in English AND the employee's primary language;
• The notice must include Company's Name, Address, and Phone Number;
• The notice must contain the employee's rate of pay and the basis in which it is paid;
• The notice also has to include when the regular pay day is for employees;
• Anything else the Mayor deems should be provided to employees;

Sound like a herculean task? Not really, if you have the resources to: a) know about the law, and b) comply with the law administratively.  Not only that, but this notice must be provided any time you have new employees or if an employee receives a pay change. The fine for not complying? $500 per employee. So get ready to comply or be prepared to break out the checkbook.