Canadian employment contract essentials to settle in writing before day one

Ontario sets two written duties at the start of employment, and a full contract goes further than either. Every employer must hand each new employee the current Employment Standards Act (ESA) poster within 30 days of hire. A further duty has applied since 1 July 2025 to Ontario employers of 25 or more people: before day one, the following must be given in writing, as listed in the province’s guide to mandatory information:

• the employer’s legal name and any operating name
• contact details for the employer
• the general location where the work will be done
• the starting wage, the pay period and the pay day
• the anticipated hours of work

These items are a floor. A written contract that also covers duties, benefits, confidentiality, probation and termination gives both sides a clearer record, and it is the only practical way to put limits on some of the risks discussed below. For an employer outside Canada, a contract signed before the start date also gives payroll everything it needs to set up the first pay correctly.

The legal employer’s name on those documents matters. Under an employer of record arrangement, the employer of record’s name goes on them, since it employs the person in law while you direct the work.

A Canadian employment contract should record the terms the provincial statute requires, the terms payroll needs, and the protections the employer wants to rely on later. The list below reflects Ontario as the default province, with the same headings working in BC and Alberta once the provincial figures are swapped in.

• Parties and start date: the legal employer, the employee and the first day of work.
• Province and work location: the province of employment decides payroll withholding and the applicable standards.
• Pay: salary or hourly rate, pay frequency and any bonus terms, stated in CAD.
• Hours and overtime: normal hours, and whether the role is exempt from overtime.
• Vacation: at least 2 weeks with 4% vacation pay in Ontario, rising to 3 weeks and 6% after 5 years.
• Benefits: health, dental or pension plans, if you offer them.
• Confidentiality and intellectual property: what belongs to the employer and what stays private.
• Probation and termination: how and on what notice the job can end.

Salary figures should respect the provincial minimum wage even for professional roles, although in practice the gap is large. Ontario’s general hourly minimum is CAD 17.60, and on 1 October 2026 it becomes CAD 17.95.

The salary in the contract should also match what was advertised. Ontario’s posting rules, in force since 1 January 2026 for employers with 25 or more staff, require each public job advert to include the expected pay, or a band no more than CAD 50,000 wide (roles above CAD 200,000 are excluded). An offer that lands outside the posted range invites questions from the candidate before the contract is even signed.

Intellectual property clauses need particular care for technical hires. Protecting inventions and source code is covered in more depth in protecting IP when hiring in Canada.

Ontario’s ESA has no probation concept as such. What it does provide is that an employer owes no statutory termination notice to someone dismissed within their first 3 months, as confirmed in the province’s termination guide. After 3 months, ESA notice applies on the normal scale.

A contractual probation clause is how employers try to carry that position into the common-law side. A probation clause may or may not cut down common-law notice, and the answer turns on the drafting and the case law, so treat it as a point for review by an Ontario employment lawyer before you rely on it. Clauses that describe probation vaguely, or that extend it beyond the 3-month window without saying what happens to notice, are the ones most worth checking.

Other provinces set their own starting points. In British Columbia no compensation for length of service is due in the first 3 months, in Alberta none is due for 90 days or less, and in Quebec the notice scale starts to run after 3 months of service. A probation clause written for Ontario should be checked against the right province before it is reused.

Use the probation period for what it is meant for. Set clear objectives in the first weeks, schedule a review well before the 3-month mark, and record the outcome. A decision taken on day 95 after no feedback at all is harder to defend than one taken on day 80 after two documented reviews, and it may also fall outside the statutory window.

A termination clause is enforceable only if it holds up under current case law, and that makes it the clause most worth paying a lawyer to review. The aim is usually to limit notice on dismissal to a defined amount, often the ESA minimum. Without an enforceable clause, a dismissed employee can seek common-law reasonable notice, which is often far above the statutory weeks.

Some drafting points are low risk because they mirror the statute directly. The clause should never offer less than ESA notice or pay in lieu, which in Ontario runs from 1 week to 8 weeks depending on service. It should keep benefits running through the statutory notice period, as the ESA requires. Where ESA severance applies, the clause should preserve it: one week of regular wages for every year worked, to a ceiling of 26 weeks, once service reaches 5 years and the employer’s global payroll is CAD 2.5 million or more.

Beyond that, enforceability turns on details the courts keep refining. Review the clause at the start of each new hire template and again when the case law moves, and do not assume a clause copied from another country or another province will hold in Ontario. A company hiring in several provinces should keep a separate clause for each, because the statutory scales differ and a clause built on Ontario’s weeks may promise too little in another province. The full set of exit rules, including Quebec’s, is in ending employment in Canada.

Fixed-term contracts and hours clauses both need drafting that reflects Ontario’s statutory rules and the risks that sit outside them. For a fixed-term hire, have the early-termination and renewal wording reviewed by an Ontario employment lawyer before the first contract is signed, because a dispute over either is decided largely on case law.

Ontario caps the working day at 8 hours, unless the employer has set a longer regular day, and the week at 48 hours. An employee can agree to exceed either cap, in writing or electronically, but only once they have been given the Director of Employment Standards’ information sheet, according to the province’s hours of work guide.

Overtime in Ontario is paid at 1.5 times the regular rate after 44 hours in a week. Managers and supervisors are exempt, and so are some IT and business consultants. A contract that describes a role as exempt should match what the person actually does, since the exemption follows the job and not the title.

• State normal weekly hours and the pay period in the contract.
• Keep any excess-hours agreement separate from the main contract, and date it.
• Record why a role is treated as overtime-exempt.

Ontario bans non-compete clauses in employment contracts entered into on or after 25 October 2021. The exceptions cover executives, such as the CEO, president, CFO and other C-suite roles, and a seller who joins the buyer as an employee after selling the business. The rule is set out in the province’s non-compete guide. A non-compete in an ordinary Ontario employee’s contract is therefore wasted wording.

Confidentiality and non-solicitation clauses remain available and carry most of the protection. A confidentiality clause should define what counts as confidential, cover the period after employment ends and require the return of materials. A non-solicitation clause should be limited to clients or staff the employee actually dealt with, for a defined period.

Ownership of work is partly settled by statute. Under section 13(3) of the federal Copyright Act, copyright in anything an employee creates as part of the job belongs first to the employer, absent an agreement that says otherwise. Contracts usually add an express intellectual property clause as well, so that anything outside copyright is also dealt with in writing.

Agreements between employers are a separate matter. The Competition Bureau has enforcement guidelines covering wage-fixing and no-poaching deals between unrelated companies, so any arrangement with another company not to hire each other’s staff needs advice first.

Bill 96 strengthened Quebec’s Charter of the French Language, and under it French is the language an employer must use with its staff, written material on working conditions included. Every job offer has to appear in French. A posting may ask for another language only if the job genuinely calls for it and the employer has first taken all reasonable steps to avoid the requirement; the reasons then have to be stated in the posting itself, as the OQLF, Quebec’s French-language office, explains on its language of work page.

The rules on the language of the contract document itself are more detailed. Confirm the current requirements with the OQLF before sending an English-only contract to anyone in Quebec. Businesses with 25 to 49 employees have also had to register with the OQLF since 1 June 2025. The wider picture is covered in hiring in Quebec under Bill 96.

Hiring through Employer of Record Canada means we sign as legal employer and draft the employment contract in the right language for the province, with the statutory terms in place. You agree the role, salary and start date; we prepare the contract and run the onboarding. How that fits into the wider sequence is set out in the EOR process in Canada. The fee starts at USD 560 per employee per month.