Tackle Compliance Head On in 2025
Employment Standards and Regulatory Compliance issues for Canadian SMBs
As we enter the second quarter of 2025, Canadian businesses are feeling the pressure of the economic and political changes down south. Things still feel very much up in the air. While our gut instinct is always to remain cautious, there can be significant risks associated with that strategy that can leave small businesses ultimately struggling in challenging economic times. Compliance with local Employment standards (ESA) for Canadian SMBs is a big deal. Let’s dive in and discuss a few and some best practices to respond while caring for your business AND your team.
Some of the most typical concerns are around economics, retention, and health and safety. as We see leaders increasingly mindful of the strain their team members are under, and are doing their best to support health and wellbeing while riding the waves of uncertainty.
Rising Costs and Economic Pressures
Rising costs are a big deal for 76% of Canadian SME leaders. This economic pressure forces businesses to navigate complex decisions regarding staffing, compensation, and overall operations. Leaders are turning to software and other tools for efficiency to help the workforce they have grow their skillsets, instead of taking on extra staff to fill in the gaps. HannahHR is one such software - with 3-5 hours back per week for the price of a daily fancy coffee, admin and human resources can take on employee wellness and company culture-related efforts to keep your workforce strong and retain your quality team!
Staffing and Retention Challenges
Labour Shortages
Many SMEs are grappling with ongoing labour shortages, making it a challenge to maintain adequate staffing levels, compounded by an aging workforce and increasing digitalization. Many leaders and business owners are doing their best to support internal learning and development by creating mentorship programs to mitigate damage caused by secession, so younger folks who understand digitalization are given the institutional knowledge they need to step into senior roles as they come available.
Increased Payroll Costs
45% of Canadian employers cite increased payroll costs as their biggest staffing challenge. While pay increases may be hard to budget for, team churn is a much greater burden to bare if you’ve got a happy and productive team already! To address labour shortages, and shockingly high living costs, nearly two-thirds of Canadian SMEs have implemented pay increases.
Employee Retention
Hot on the heels of increased pay, we recognize that turnover is a huge cost for all sizes of Canadian business. 64% of employers highlight employee retention as a big deal for their budgets, and lament the loss of great talent! It isn’t all about money - many Canadians are looking for flexibility and benefits, recognition, and great company culture. After all, we do spend a LOT of our time at work! In response, the best leaders are listening to the needs of their teams, which may include flexible working arrangements, mental health support, and recognition programs to aid retention.
Regulatory Compliance for Canadian SMBs
Changing Regulations
Many small businesses struggle to keep up with evolving provincial regulation , and local employment laws. This includes understanding and adhering to new regulations as they arise.. HannahHR does a lot of this work for our users, ensuring that local ESA’s are up-to-date in their portals and that they’re aware of the most recent and upcoming documentation.
Misclassification of Workers
Properly distinguishing between employees and independent contractors remains a challenge, as misclassification can lead to steep penalties and affect eligibility for minimum employment standards protections. Understanding the differences between the two, and regularly reviewing the legislation associated with those differences, can make sure you and your SMB stays complaint with your local ESA.
Workplace Safety and Health
Occupational Health and Safety Compliance in Canada
Ensuring Canadian compliance with occupational health and safety regulations, such as Worksafe in British Columbia, or Ontario's Occupational Health and Safety Act, is crucial for maintaining a safe work environment and avoiding disruptions. Hold regular meetings or ask your team regularly if they’ve noticed anything physically challenging or unsafe in their work environments, and make sure to address their concerns promptly!
Mental Health and Psychological Safety
Creating a psychologically safe workplace where employees can raise concerns without fear of reprisal is becoming increasingly important. HannahHR does some of this legwork by providing a totally anonymous safe space for employees to ask their questions, but our platform also provides an easy way to take real-time pulse checks on your organizational wellness based on the themes of questions that are being asked! Armed with that knowledge of what kinds of concerns are top of mind for their teams, leaders can make policy and practice changes to improve workplace mental health.
HR Documentation and Record-Keeping
Policy Documentation
Proper documentation of all HR policies and practices is crucial for compliance. Many SMEs struggle with keeping their employee handbooks and policies up to date. While hannahHR doesn’t review your handbook, she does make sure that ESAs are the baseline of every response, so if your documentation hasn’t been updated, your responses to your team will still be compliant.
Secure Document Management
Protecting employees' personal and health information is essential. Implementing stringent measures to secure physical and digital records is challenging for many small businesses. Outside security and technical consultation can help - while it’s another expense it can save hours in trying to DIY a system that may not properly protect you, your business, or your team.
Ensuring compliance with your local Employment Standards while supporting your team well doesn’t have to be overwhelming! And the team at hannahHR are here to give you hours back to focus on the bigger questions while our platform tackles the every day. By addressing these compliance issues proactively, Canadian SMEs can mitigate risks, foster a positive work environment, and position themselves for growth in 2025 and beyond!
Questions? HannahHR is here to help. Book a demo today and see how she can save time and bring peace of mind, for the cost of your daily americano :)
