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Jobs / Business

Contracts/letter of agreement

Rather than working as an employee with a company, some people will “contract” their services to a company. In this case, an individual or the individual’s own company will sign a contract to do a certain job for a set amount of money.The company hiring the contracted worker/company will draw up a contract or letter of agreement that will describe the work to be done, the period of time the work will take, and the amount that will be paid. No deductions are made from the payment. No benefits are provided. It is a straight fee for service.This income must be reported to the tax department.

Wages

Employees can be paid a salary or wage.A wage is an hourly rate of pay such as $10 per hour, $15 per hour, and so on.The total pay will depend on how many hours are worked each week. Over a certain number of hours, a worker may receive “overtime” pay. Each province and territory has determined a minimum wage that must be paid to workers.

Salary

Employees working for a company are usually paid a salary or a wage. A salary is the total pay for a year, for example, $39,000 a year.The salary will be divided into payments such as once a week, once every two weeks, or twice a month. For example, if a person earning $39,000 is paid every two weeks, he/she would receive $1,500 every two weeks minus deductions such as income tax, Canada Pension Plan contributions, Employment Insurance, and so on.The result is your “take home pay” or “net pay.”

Profits, growth, and new jobs

Often the number of people working for a company is related to how well the company is doing in terms of selling the products and services it produces. If the company sells more, it will need to produce more.This will increase the company’s need for workers.Therefore, when looking for a job, it is good to look for companies that are doing well—selling lots of goods and services, earning profits, and likely to grow.

Employment insurance

When you are working, Employment Insurance, or EI, is subtracted from your pay. This is money that is paid to the federal government to support programs designed to assist those who are unemployed or underemployed. If you lose your job, you may be able to collect Employment Insurance while you look for another job.There are rules and regulations that determine when you get EI, how much you get, and how long you can get it.Visit www.servicecanada.gc.ca/eng/sc/ei/index.shtml or DayPlanner web site – Link #175.

Probationary periods

Many employers will hire workers for a probationary period. During this time, the employee will work to show if he or she can do the job effectively. At the end of the probationary period, the employee will usually either be offered a permanent job or be let go. A typical probation period is about three months. Often an employee will not receive “benefits” until after the probationary period is over.

Severance pay

Usually when a worker is “fired without cause,” “let go,” “dismissed,” or “laid off” without notice, the worker will receive severance pay of some amount.The amount will usually depend on how long the worker has been employed at the company. The money is given to help the worker through the initial period of unemployment. Notice periods and severance pay are issues that are determined by provincial or territorial labour legislation. In some instances, individuals can appeal severance, either through a labour tribunal or through a challenge in the courts.

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Negotiating a salary

Although companies use “salary scales” to determine the salary for a job, in some cases, an employee will be in a position to negotiate a salary.That is, there will not be a firm wage or salary for a position.The pay will be determined on the basis of the employee’s education, experience, abilities, and negotiating skill. If you are in such a situation, make sure that you represent yourself well and seek out a fair and appropriate wage or salary. Learn more

A business can be incorporated at the federal or provincial level in Canada and become a corporation.This means owners/investors have “limited liability” and can only lose what they have invested.There are small corporations, large corporations, and multinational corporations, which conduct business in more than one country.The Canadian Federation of Independent Business (CFIB) is an association that helps small businesses in Canada.You can get information on starting a business from the CFIB website at www.cfib.ca.

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