Table of Contents
- Why HR Can Feel Unfamiliar for Immigrant Business Owners
- Ontario Employment Law: What Applies to Your Business
- ESA Compliance Gaps Immigrant Employers Commonly Miss
- Hiring Family Members: What Ontario Law Says
- Employment Protection for Foreign Nationals Act (EPFNA)
- Temporary Foreign Worker Program Obligations
- Managing Work Permits and Work Authorization
- Language, OHSA, and Safety Training
- Cultural HR Practices That Conflict with Ontario Law
- Human Rights Code: What You Cannot Do in Hiring or Managing Staff
- Ontario Compliance Checklist for Immigrant-Owned Businesses
- HR Support Models
- Frequently Asked Questions
Why HR Can Feel Unfamiliar for Immigrant Business Owners
Entrepreneurs who built businesses in other countries often bring strong work ethics, deep industry expertise, and a clear vision for their Ontario business. What frequently catches them off guard is how different — and how detailed — Ontario’s employment law framework is compared to most other countries.
In many countries, employment standards are minimal, informally applied, or dependent on the size of the business. In Ontario, the Employment Standards Act (ESA) applies from the first employee, and many obligations kick in at just 5, 10, or 20 employees. The rules cover minimum wage, overtime, vacation pay, statutory leaves, termination notice, severance, workplace safety, and more — and they cannot be contracted away, even if both the employer and employee agree otherwise.
The Seven Common Challenges for Immigrant-Owned Businesses
| Challenge | Typical Background | Ontario Reality |
|---|---|---|
| Informal family employment | Family members working without formal agreements or minimum wage | Family employees are entitled to all ESA minimums unless genuinely co-owners |
| Treating employees as contractors | Common in many countries to use informal contractor arrangements | Ontario and CRA apply a multi-factor test — misclassification triggers back-tax assessments and ESA claims |
| Using home-country employment contracts | Contracts imported from original business or adapted from non-Ontario sources | Ontario courts void clauses that violate ESA — including US-style at-will termination language |
| Language barriers in safety training | Training delivered only in English to workers with limited English | OHSA requires workers to genuinely understand workplace hazards — language gap is an employer compliance risk |
| Hiring on work permits without tracking expiry | No system to monitor renewal dates for TFW or open work permit holders | Working after permit expiry is an immigration violation; employer bears responsibility |
| Paying workers below minimum wage for certain hours | Culturally normalized arrangements (meals, housing deducted from pay) | ESA strictly limits deductions; wages below minimum wage are illegal regardless of arrangement |
| Dismissing employees without proper process | Business relationships ending informally with no paperwork | Ontario has mandatory termination notice, severance pay, and ROE requirements with significant financial exposure |
Ontario Employment Law: What Applies to Your Business
There is no immigration-status exception for employers. Ontario employment law applies to all employers operating in Ontario, regardless of the owner’s nationality or immigration status, where the company was incorporated, or what country the business model was built on.
| Law | What It Governs | Applies From | Enforcement |
|---|---|---|---|
| Employment Standards Act (ESA) | Minimum wages, hours, overtime, vacation, leaves, termination | First employee | Ministry of Labour — Orders to Pay, fines up to $100K |
| Occupational Health and Safety Act (OHSA) | Workplace safety, harassment policy, violence prevention | First employee (policies at 5+) | MOL Inspectors — orders, fines, stop-work orders |
| Ontario Human Rights Code | Prohibition on discrimination in hiring, employment, dismissal | First employee | Human Rights Tribunal of Ontario (HRTO) — reinstatement, compensation, $50K+ dignity awards |
| Pay Equity Act | Equal pay for work of equal value, gender-based pay gaps | 10+ employees (private sector) | Pay Equity Commission — compliance orders |
| Workplace Safety and Insurance Act (WSIA/WSIB) | Workers’ compensation, return-to-work obligations | Most sectors (Schedule 1) | WSIB — premium assessments, penalties, back-billing |
| Employment Protection for Foreign Nationals Act (EPFNA) | Protects foreign nationals from exploitation by recruiters and employers | All employers hiring foreign nationals | Ministry of Labour — compliance orders, fines |
ESA Compliance Gaps Immigrant Employers Commonly Miss
Minimum Wage
Ontario’s general minimum wage is $17.60/hour (effective October 1, 2024, rising to $17.95 on October 1, 2026). There is no lower rate for part-time, casual, family, or newly hired workers. The student rate ($16.60/hour rising to $16.95) applies only to workers under 18 who work fewer than 28 hours per week during school term.
Deductions from wages for meals, tools, uniforms, or accommodation cannot reduce wages below minimum wage, regardless of any agreement.
Overtime Pay
Employees who work more than 44 hours in a week must be paid 1.5 times their regular rate for each hour over 44. There is no daily overtime threshold in Ontario (unlike some other provinces). Overtime cannot be waived or averaged without a formal written averaging agreement signed before the relevant period.
Vacation Pay
All employees are entitled to at least 4% of gross wages as vacation pay (rising to 6% after 5 years of service). Vacation pay accrues on all earnings — including commissions and bonuses where those are included in the base rate. Paying a flat wage and saying “vacation is included” without calculating the 4% correctly is a frequent violation.
Statutory Leaves
Ontario has 19+ job-protected unpaid (and some paid) leaves under the ESA, including pregnancy leave (17 weeks), parental leave (61–63 weeks), sick leave (3 days), family responsibility leave (3 days), and bereavement leave (2 days). These leaves are available to all qualifying employees regardless of their immigration status. An employer cannot dismiss or penalize an employee for taking an ESA leave.
Termination Notice
An employee who has worked for 3 months or more is entitled to written notice of termination or pay in lieu. The minimum notice period is 1–8 weeks depending on length of service. There is also a separate severance pay obligation for employees with 5+ years of service at employers with $2.5M+ in Ontario payroll. These cannot be waived in an employment agreement.
Employment Information Statement (July 2025)
Employers with 25 or more employees must provide new hires with a written information statement covering the employer’s legal name, address, and details of the employment. Failure to provide this statement is a compliance violation.
Hiring Family Members: What Ontario Law Says
In many cultures, bringing family members into the business is standard practice — and doing so informally is common. In Ontario, family members who work in a business are subject to the same employment law protections as any other worker, unless they meet the narrow definition of a genuine co-owner.
Family Member as Employee
A family member is an employee if the business owner directs their work, controls their hours and tasks, and provides the tools/equipment. Even if the family member “agreed” to work without pay or below minimum wage, the ESA floor still applies. If the business is audited or the relationship breaks down, the Ministry can order back-pay for all unpaid ESA entitlements — with no limitation of time protection for the employer in some cases.
Family Member as Genuine Business Partner
If a family member is a true co-owner — they share in the profits and losses, they have decision-making authority, and there is a formal partnership or shareholder agreement — they may not be an employee under the ESA. This must be genuinely reflected in the business structure, not just described that way to avoid ESA obligations.
Key Practical Points
- Have a written employment contract for every family member who works in the business
- Pay at least minimum wage; maintain payroll records
- Register family members with CRA payroll (CPP, EI obligations — unless a true partner or corporate shareholder)
- If they are working, they need ROE records when the working relationship ends
Employment Protection for Foreign Nationals Act (EPFNA)
EPFNA is a specific Ontario law that applies to employers who hire foreign nationals (including Temporary Foreign Workers, international students on work permits, and open work permit holders). It was created to prevent exploitation of workers who may be less aware of their rights or more vulnerable due to their immigration status.
What EPFNA Prohibits
| Prohibited Action | Example |
|---|---|
| Charging fees connected to employment | Charging workers for job placement, training, or orientation |
| Withholding documents | Holding a worker’s passport, work permit, or SIN card |
| Making deductions that bring wages below minimum | Charging for meals, housing, or transportation in a way that leaves net pay below $17.60/hr |
| Penalizing workers for asserting rights | Firing, threatening, or reducing hours of a worker who complained about unpaid wages |
| Providing false information about the position | Describing the job as skilled work to obtain LMIA approval but assigning general labour |
EPFNA violations are separate from and in addition to ESA violations. They can be reported to the Ministry of Labour and may result in compliance orders, fines, and LMIA suspension by Employment and Social Development Canada (ESDC).
Temporary Foreign Worker Program Obligations
If your business employs workers through the Temporary Foreign Worker Program (TFWP) — including the Agricultural Stream, Caregiver Stream, or the general LMIA process — there are specific federal obligations that apply on top of provincial ESA requirements.
Key TFWP Employer Obligations
| Obligation | Detail |
|---|---|
| Prevailing wage | Must pay the prevailing wage for the occupation as listed in the LMIA — cannot pay less even if the worker agrees |
| Same working conditions | Conditions of employment must match what was listed in the LMIA and work permit — different hours, duties, or location may constitute a breach |
| WSIB coverage | TFWs are entitled to WSIB benefits regardless of immigration status; employer must register and remit premiums |
| Transportation to Canada | Certain streams require employer to cover cost of transportation to and from Canada |
| Housing (agricultural stream) | Must meet provincial housing standards; inspectable by ESDC |
| Private health insurance | Must provide OHIP-equivalent health coverage from day of arrival until OHIP kicks in (typically 3 months) |
| ESDC inspection readiness | ESDC conducts compliance inspections — employer must maintain payroll records, LMIA copies, and work permit copies |
Non-compliance with TFWP conditions can result in being banned from the TFWP for up to 2 years, company name disclosure on the ESDC public registry, and financial penalties.
Managing Work Permits and Work Authorization
Employers who hire workers on work permits (TFWP, PGWP, spousal open permits, CUSMA, etc.) are responsible for ensuring workers do not work after their authorization expires.
Employer Responsibilities
- Record work permit details at hiring: permit number, expiry date, employer-specific restrictions (if any), occupation conditions
- Track expiry dates — set calendar reminders 60–90 days in advance
- Support renewal — provide a support letter confirming continued employment if needed for renewal application
- Stop work when expired — do not allow work to continue after the permit expiry date, even while awaiting renewal. If the worker applied for renewal before expiry, implied status may allow continued work
- SIN numbers beginning with 9 — a SIN beginning with “9” indicates the worker is authorized to work in Canada only for a specific employer or until a specified date. Verify the authorization matches the work you are offering
Language, OHSA, and Safety Training
The Occupational Health and Safety Act requires employers to ensure that workers understand health and safety information, instructions, and procedures. When workers have limited proficiency in English, this creates a compliance gap that puts both workers and employers at risk.
Language-Related OHSA Obligations
| Obligation | Language Consideration | Practical Solution |
|---|---|---|
| WHMIS training (hazardous products) | Workers must understand hazardous product information | Provide WHMIS training materials in workers’ language; use bilingual trainers or visual formats |
| Workplace violence and harassment policy | Workers must know what to report and how | Translate key policies into workers’ primary language |
| Emergency procedures | Workers must understand evacuation routes and emergency instructions | Post bilingual emergency signage; conduct bilingual drills |
| Safe work procedures | Workers must understand how to perform tasks safely | Use visual/video-based training in addition to written materials |
| Worker right to refuse unsafe work | Workers must know they can refuse and how to do so | Communicate in workers’ language — this is a fundamental OHSA right |
Additionally, EPFNA requires that information sheets given to foreign nationals by recruiters be provided in the foreign national’s preferred language, if available. The Ministry of Labour has translations of key ESA materials in many languages at no cost.
Cultural HR Practices That Conflict with Ontario Law
Many practices that are normal or legal in other countries are violations of Ontario employment law. Here are the most common areas where cultural business norms conflict with Ontario legal requirements:
| Cultural Practice | Ontario Legal Standard | Risk |
|---|---|---|
| Workers agree to work without pay during “trial periods” | All hours of work are compensable at minimum wage or above — trial periods do not permit below-minimum wage payment | Ministry Order to Pay for all unpaid wages |
| Verbal employment agreements / no written contracts | Legal but risky — ESA minimums apply regardless; without written contracts, employer has no protection from common law notice claims | Unlimited common law termination liability |
| Dismissing an employee on the spot with no notice | After 3 months, termination requires written notice or pay in lieu; no “at will” employment in Ontario | ESA Order to Pay; wrongful dismissal claim at common law |
| Hiring only from the same ethnic community | Restricting hiring to a particular race, national origin, or ancestry is discrimination under the Human Rights Code | HRTO complaint; discrimination finding; remedies including back pay and dignity damages |
| Different pay for the same work based on worker’s origin country | Pay Equity Act and ESA prohibit gender-based and status-based pay discrimination; TFWP requires prevailing wage | Pay Equity audit; Ministry order; HRTO complaint |
| Asking about immigration status in job interviews | Asking about citizenship or immigration status in ways that screen out applicants is prohibited — you may only ask whether the applicant has the right to work in Canada | HRTO complaint for discrimination based on citizenship/place of origin |
| Requiring “Canadian experience” in job postings | As of January 1, 2026, Ontario’s Pay Transparency Act prohibits employers with 25+ employees from requiring “Canadian experience” in job postings | Ministry order; $100K penalty per violation |
Human Rights Code: What You Cannot Do in Hiring or Managing Staff
The Ontario Human Rights Code prohibits discrimination in employment based on 17 protected grounds. The most commonly triggered grounds in immigrant-owned businesses are:
- Race and ethnic origin — hiring, firing, or treating workers differently based on their racial background or ethnicity
- Place of origin — where an applicant or worker was born or grew up
- Citizenship — restricting hiring to Canadian citizens only (unless the position specifically requires it)
- Creed / religion — failing to accommodate religious practices, prayer breaks, or religious holidays
- Disability — failing to accommodate workers with physical or mental health conditions to the point of undue hardship
- Sex and pregnancy — treating pregnant workers differently or failing to accommodate pregnancy-related needs
- Family status — failing to accommodate childcare or caregiving obligations that materially conflict with a work schedule
Human Rights Code protections apply from the first day of employment — including during recruitment and hiring. Interview questions about family status, pregnancy plans, religion, disability, or immigration status are prohibited.
Ontario Compliance Checklist for Immigrant-Owned Businesses
| Area | Compliance Requirement | Done? |
|---|---|---|
| Payroll | CRA payroll account registered; CPP and EI remitted for all employees | ☐ |
| Employment Contracts | Written contract for every employee, signed before start date, Ontario-specific termination clause, no non-compete | ☐ |
| Minimum Wage | All workers paid at least $17.60/hr; no deductions that reduce net pay below minimum | ☐ |
| Overtime | Hours over 44/week paid at 1.5x; no verbal overtime waiver agreements | ☐ |
| Vacation Pay | Minimum 4% vacation pay calculated correctly on all earnings | ☐ |
| ESA Leaves | All 19+ leaves recognized and tracked; no termination for leave-taking | ☐ |
| OHSA Policy | Written workplace violence and harassment policy (required at 5+ employees); posted and distributed | ☐ |
| WHMIS | WHMIS training for all workers who handle hazardous products; training in comprehensible language | ☐ |
| Work Permit Tracking | Work permit expiry dates tracked; renewal process supported; work stops if permit expires | ☐ |
| EPFNA | No fees charged; no document withholding; accommodation deductions within legal limits | ☐ |
| WSIB | Registered with WSIB; premiums remitted; all workers (including TFWs) covered | ☐ |
| Pay Transparency (25+ employees) | Job postings include compensation range; no “Canadian experience” required; AI use disclosed | ☐ |
| Termination Process | Notice or pay in lieu provided; ROE issued within 5 business days; all earned wages paid | ☐ |
HR Support Models for Immigrant-Owned Businesses
Many immigrant entrepreneurs start with limited HR infrastructure and build it as the business grows. The right HR support model depends on where you are in that journey.
| Business Stage | Common HR Gap | Recommended Model | Typical Cost |
|---|---|---|---|
| Starting out (1–5 employees) | No employment contracts; verbal agreements; family staff unregistered | HR consulting — one-time contract and policy package | $1,500–$4,000 one-time |
| Growing (5–20 employees) | Overtime miscalculations; no OHSA program; informal discipline process | Fractional HR — project-based or small retainer | $1,500–$3,000/month |
| Established (20–50 employees) | TFW compliance gaps; pay equity; accommodation requests; turnover costs | Fractional HR retainer — ongoing strategic and operational support | $3,000–$6,000/month |
| Larger (50+ employees) | Compliance across multiple workers with different work authorizations; HR policy infrastructure | In-house HR coordinator + fractional HR oversight | $70K–$110K in-house + $2K–$4K/month fractional |
At HRX Connect, we work with immigrant-owned businesses across Ontario to build compliant, effective HR programs that respect both Ontario law and the cultural context of your business. Contact us to discuss your situation.
Frequently Asked Questions
Does Ontario employment law apply the same way to immigrant-owned businesses?
Yes. The Employment Standards Act, Occupational Health and Safety Act, Human Rights Code, and Pay Equity Act apply to all Ontario employers, regardless of the owner’s background or country of origin. There are no exemptions for immigrant-owned businesses.
Can I hire my family members and pay them less than minimum wage?
No. Family members who perform work for your business are entitled to the same ESA minimum standards as any other employee — including minimum wage ($17.60/hr), overtime pay, vacation pay, and job-protected leaves. The only exception is a family member who is a genuine co-owner with shared risk and profit.
Do I have to provide safety training in workers’ language?
Under the OHSA, employers must ensure that workers genuinely understand safety information. While the law does not specify language requirements, providing training only in English to workers who are not proficient in English creates both a safety risk and a legal compliance risk. WHMIS training in particular must be comprehensible to each worker.
What is the Employment Protection for Foreign Nationals Act (EPFNA)?
EPFNA is an Ontario law that prohibits employers from charging fees for hiring, withholding workers’ documents, making deductions that reduce wages below minimum wage, and penalizing workers who assert their rights. It applies to all foreign national workers including TFWs, international students, and open work permit holders.
I hired someone on a work permit — what are my obligations if their permit expires?
An employee whose work authorization has expired cannot legally work in Canada. The employer must stop the employee from working until their authorization is renewed. Employers should track permit expiry dates 60–90 days in advance and support renewal processes to avoid disruption.
Can I treat employees differently based on their immigration status?
No. The Ontario Human Rights Code prohibits discrimination based on citizenship and place of origin. Paying TFWs less than domestic workers for the same work, or treating them differently in terms of training or advancement, can constitute discrimination. TFWP obligations also require paying the prevailing wage.
This article is for informational purposes only and does not constitute legal advice. For guidance on your specific situation, contact HRX Connect.
Related reading:
Employment Contracts Ontario
Duty to Accommodate Ontario
How to Hire an Employee in Ontario
Fractional HR Services
HR Outsourcing for Small Business Ontario