If you’re expanding your business from the US to Canada, it’s a good idea to brush up on how the employment regulations differ between the two countries. While regulations may seem similar at first glance, following the US rules and regulations you’ve grown accustomed to for employees in Canada could get you into legal trouble with the Human Rights Commission.

12 Things an American Company Looking to Pay a Worker In Canada Needs to Know

While there are many differences to expect in terms of payroll, taxes, and employment standards when expanding into Canada, we’d like to take a moment today to discuss the differences in drug testing and background checks.

Drug Testing in Canada

In the US, drug testing and background checks often go hand in hand. They are a common precursor to employment for many industries and positions—particularly those where heavy machinery is used. It is so common that it is almost an expectation during the pre-employment process. In fact, the United States is the only country in the world where drug testing is used to a significant degree, according to the Ontario Human Rights Commission.

On the contrary, drug testing in Canada is rarely permitted as part of the pre-employment process.

While your only goal may be to create a safe workplace, drug testing in Canada is not worth the legal risk with the Human Rights Commission. Further, the majority of Canadian employers are not permitted to maintain random drug testing policies during employment. In most cases, random drug testing of workers is considered discriminatory and is seen as a violation of basic rights. The Ontario Human Rights Code, for example, states that employers cannot discriminate against employees due to drug or alcohol dependence or abuse as a disability.

Exceptions to Employment Drug Testing Policies in Canada

In Canada, a danger to the workplace does not stand as an automatic justification for random drug testing. But there are exceptions to the rule, such as administering a drug test for safety-sensitive positions where an accident or incident could cause irreparable damages or death. 

For example, an employer may determine that transportation is a safety-sensitive position. Though this may seem a straightforward decision, counsel should still be consulted before implementing a drug testing policy.

Even in these cases, there must be a link between impairment and job performance. A three-part test can be applied to determine whether your workplace can justify discriminatory rules:

• Is there an objective basis for believing that job performance could be impaired by drugs or alcohol?
• For specific employees, is there an objective basis for believing that habitual absences, lateness, or erratic behaviour are related to alcoholism or drug addiction?
• Is there an objective basis to believe that the risk caused could adversely affect the safety of coworkers or the public?

Further, reasonable cost and post-accident drug tests may also be conducted in some cases where the employer has reasonable cause to suspect impairment at work.

Testing Positive for Marijuana in Canada

Where the laws on cannabis differ from state to state and at the federal level in the US, marijuana is legalized for both medicinal and recreational use in Canada. Though recreational use is lawful, the laws are similar to those regarding alcohol: use is prohibited in the workplace. This means that workers are not permitted to use marijuana before or during their shift. 

Due to the legalities, it is recommended that organizations implement clear policies regarding drug use. While pre-employment drug screening is minimal and testing during employment is highly regulated, there may be circumstances where a drug test is allowed and necessary. Testing positive for marijuana during the pre-employment drug screening is likely not enough to withdraw an offer or refuse to hire a candidate. Since marijuana can remain in the system for an extended time, it will be difficult to prove if someone was under the influence during work hours, making it difficult to terminate employment for a positive result. 

What about psychedelics?

The use of psychedelics in therapeutic settings is growing globally. It is considered a breakthrough therapy for health conditions like depression, anxiety, and PTSD. While this is only just being introduced—Alberta is currently the only province regulating—it may be something to consider later on. Drug policies should be updated regularly as new laws and regulations are put in place.

Background Screening in Canada versus the US

The differences between background screening in Canada and the US are less stark. Background checks are considered common practice in the US. In Canada, they are used less frequently as part of the pre-employment process. Typically, they’re only conducted on potential employees who will be working directly with money, vulnerable persons, or highly sensitive information.

Although there is no law prohibiting US companies from performing background checks on potential Canadian employees, doing so could increase the length of the hiring process and harm the candidate experience.

If you work for an American company looking to hire remote employees in Canada, it’s best to have a good understanding of the differences in rules and regulations between the two countries. Alternatively, you could engage a professional employer organization (PEO) to handle the responsibility of legislative and legal compliance, payroll, and human resources for your Canadian employees. This partnership will help ensure you remain compliant in your employee onboarding and management processes.