Employment rules for start-ups in Quebec
Before the first hire
- register as an employer with Revenu Québec, the CRA and the CNESST;
- set up payroll: source deductions (tax, QPP, EI, QPIP), employer contributions (FSS, CNESST, labour standards);
- post the required notices and adopt a psychological and sexual harassment prevention policy (s. 81.19 ALS).
Employee or contractor?
Start-ups often use freelancers. The characterization depends on the reality, not on the title of the contract: subordination, integration into the business, ownership of tools, risk of loss (art. 2085 C.C.Q. vs art. 2098). A misclassified contractor may claim the rights of an employee.
Essential clauses
- assignment of intellectual property created by the employee (and waiver of moral rights for copyright);
- confidentiality;
- non-competition limited in time, territory and type of work (art. 2089 C.C.Q.) and non-solicitation;
- stock options or equity: written plan, vesting, departure clauses.
Minimum standards
The Act respecting labour standards applies from the first employee: minimum wage, hours of work, overtime, vacations, statutory holidays, family and sick leave, notice of termination. These standards cannot be waived by contract.
