Agriculture

You've Decided to Hire an Employee – what do you need to know?

Your operation is expanding and you need to take on staff. This requires a new skill set and introduces a new set of challenges. Employers state their biggest concern is not the cost of hiring employees but the skills required for people management.   Business owners are good at what they do, but don’t always have the necessary skills to be an employer. Recruitment, orientation, training, communication, motivation, and conflict management are all areas where a new employer will need to gain knowledge and confidence. The information below lists the first steps you need to take.

 
You do not have to be a registered company to have an employee. You will need a registered Business Number (BN) with a payroll deductions account before the employee starts work.
 
If you plan to hire on a contract basis, Canada Revenue Agency (CRA) may consider you to be an employer even if you have a written contract that identifies a worker as an independent contractor. CRA has a four-part test to determine if it’s a contract of service (insurable employment income and the employer must make source deductions) or if it’s a contract for service (non-insurable contract work). The test looks at control over work, ownership of tools and equipment, chance of profit or risk of loss, and the integration of the employer's activities to the worker’s own commercial activities.
 
Before posting an ad to hire an employee, ensure you are familiar with the appropriate federal and provincial legislation, including employment standards, source deductions, workers’ compensation and safety regulations, the Human Rights Code and maintaining employee records.
 
Employment standards legislation includes guidelines regarding the payment of wages, vacation pay, hours of work, breaks, and payment of overtime.  In Manitoba, employment standards for agriculture can differ from other industries in areas such of hours of work, overtime and general holiday pay. 

When you pay an employee, you are required to withhold source deductions, which you remit to the federal government. These deductions include federal tax, Canada Pension Plan contributions and Employment Insurance premiums.  Options to calculate deductions include purchasing an accounting software package with a payroll module, contracting a payroll service, accessing Tables on Diskette, a federal government free software program, or manual tables provided by the government. You will need to file a T4 for the employee with the federal government at the end of each tax year. If and when an employee leaves, you must complete and issue a Record of Employment (ROE).

Ensure you register with the Workers Compensation Board.  You will need to provide information including your
Business Number, date of hire, and estimated gross annual payroll.  As per SafeWork Manitoba regulations, the employee will need to receive safety training.
As an employer, you must ensure discrimination and harassment do not occur in your workplace. The Human Rights Code protects current, past and potential employees.
Set up an accurate record management system for the following information: time worked, source deductions, Form TD1 (Personal Tax Credit return), job offer letter and safety training verification.
 
Reference the websites below for more information on these topics.
Manitoba Employment Standards www.gov.mb.ca/labour/standards; Manitoba Employment Standards – agriculture www.gov.mb.ca/labour/standards/category,agriculture,factsheet.html; Canada Revenue Agency Payroll www.cra-arc.gc.ca/payroll; Workers Compensation www.wcb.mb.ca; SafeWork Manitoba  http://safemanitoba.com; Manitoba Human Rights Code www.manitobahumanrights.ca/employers.html; CRA – payroll records www.cra-arc.gc.ca/tx/bsnss/tpcs/kprc/pyrll-eng.html.

For further information or to discuss farm business management topics, such as human resource management, contact a Farm Management Specialist, or visit our website for resources and upcoming events that could assist you.