If a U.S. company is hiring across the border in Canada, then they will need to understand how the labor laws differ in each country—and sometimes each province. One of the labor laws U.S. companies need to pay close attention to is maternity leave. Canada maternity leave and parental leave regulations sometimes referred to as EI maternity leave, and FMLA maternity leave in the United States differ greatly. So, it is very important that companies looking to hire in Canada have an in-depth understanding of the differing legislation. 

Maternity Leave in the United States

To understand the differences in U.S. versus Canada maternity leave laws, we must first have a clear understanding of what the laws are in the U.S. Though those living in the United States are aware of the lack of unpaid maternity leave, it may surprise you to find out that despite being one of the richest countries in the world, it is one of the only countries that does not offer guaranteed paid maternity leave. 

Now, this does vary on a state-by-state level. There are some states and areas—California, Colorado, Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Oregon, Rhode Island, and the District of Columbia—that do offer paid maternity leave, but generally, this is decided at the company level. 

Currently, only about 21% of US workers are eligible for paid maternity leave. Though, SHRM found that 55% of employers now offer paid maternity leave while 45% offer paid paternity leave. Even when offered, it is often significantly less time than offered in other countries. 

One thing of note is the ability to terminate employment during maternity leave in the U.S. However, there are restrictions. You can only terminate an employee out on FMLA maternity leave if the company is downsizing or eliminating the position, or the employee has done something to violate the employment contract or code of conduct while on leave. 

U.S. Maternity Leave Regulations

Maternity leave in the United States is covered under the Family and Medical Leave Act (FMLA). FMLA maternity leave is up to 12 weeks of unpaid, job-protected leave per year for eligible employees. Under FMLA, Maternity leave must be provided: (1) for the birth and care of the newborn child of an employee or (2) for placement with the employee of a child for adoption or foster care.

Eligibility requirements are set at both the employee and employer level:

• Employer Eligibility Requirements as defined by US Department of Labor
• Private-sector employer, with 50 or more employees in 20 or more workweeks in the current or preceding calendar year, including a joint employer or successor in interest to a covered employer;
• Public agency, including a local, state, or Federal government agency, regardless of the number of employees it employs; or
• Public or private elementary or secondary school, regardless of the number of employees it employs.
• Employee Eligibility Requirements as defined by US Department of Labor
• Worked for employer at least 12 months
• Has at least 1,250 hours of service for the employer during the 12-month period immediately preceding the leave
• Works at a location where the employer has at least 50 employees within 75 miles

Maternity Leave and Parental Leave in Canada

Unlike the United States, Canada does offer guaranteed paid maternity leave. In Canada, there is also something called paid parental leave which can extend the paid maternity leave period, offer paid paternal leave, and offer leave for the adoption of a child. As with most things in Canada, each province may have their own additional requirements. The below eligibility criteria is defined at the federal level. It should be noted that maternity, paternity, parental and adoption benefits for residents in Quebec are the responsibility of the province.  

Canada Maternity Leave Regulations

Maternity leave:

EI maternity leave only applies to the person giving birth, unlike FMLA maternity leave in the U.S. Where FMLA offers unpaid and job-protected leave, EI maternity leave is paid and not job-protected. Employers can legally terminate the employment of someone on maternity leave so long as the reason for termination is not discriminatory. 

There is a maximum duration of 15 weeks with a 55% benefit rate and a weekly max payout up to $638. 

Parental leave:

Parents who are caring for their newborn or newly adopted child are eligible for parental leave in Canada. There is an option for parents to share parental leave, but each parent must choose the same option and submit their own application. Shared parental leave can be taken consecutively or concurrently. 

There are two parental leave period options:

• Standard. Standard parental leave allows 40 weeks (which can be shared) in 12 months with a 55% benefit rate and a weekly max payout up to $638. One parent can not receive more than 35 weeks.
  
• Extended. Extended parental leave allows 69 weeks (which can be shared) in 18 months with a 33% benefit rate and a weekly max payout up to $383. One parent can not receive more than 61 weeks. 
  
  
  

Handle Leave Compliantly

Since employers are typically obligated to adhere to the local labor and employment laws when they are hiring across borders, even when those employees are working remotely, U.S. companies looking to hire in Canada will need to offer Canadian maternity leave and parental leave to those employees. We can simplify things and ensure that you’re handling things in compliance with local jurisdictions. Leave it to The Payroll Edge. Contact us today!