Navigating cross-jurisdictional complexities

In Canada's interconnected economy, employees frequently cross provincial and territorial boundaries for work assignments, remote work arrangements, or permanent relocations.  

Also, on occasion or during a pandemic that shall remain unnamed, employees may request the ability to move provinces/territories to be closer to family or supports. 

While this mobility offers significant business advantages, it creates complex legal challenges for employers who must navigate varying provincial workers' compensation regimes and employment standards. Understanding jurisdictional implications is not merely an administrative concern -it's a critical legal and financial responsibility that can significantly impact both employer liability and employee protection. 

Canada's workers' compensation system operates as a provincial/territorial responsibility (rather than being federally-governed), resulting in 13 distinct workers' compensation boards across the provinces and territories. Each jurisdiction maintains its own legislation, coverage rules, benefit structures, and premium calculations. This decentralized approach means that seemingly identical work situations can result in vastly different legal obligations depending on the province of employment. 

The fundamental principle underlying most provincial systems is that coverage typically follows the location where work is performed, not where the employer is headquartered or where the employee resides. However, this basic rule becomes complicated when employees work across multiple jurisdictions or when their work location changes temporarily or permanently. 

Key jurisdictional considerations for workers’ compensation coverage 

When an employee works primarily in one province but occasionally travels to others for business, the primary jurisdiction usually governs workers' compensation coverage. However, employers must carefully document the employee's primary work location and ensure that temporary assignments don't inadvertently shift the jurisdictional basis for coverage. 

For employees who regularly work in multiple provinces and territories, employers face more complex obligations. Some provinces have reciprocal agreements that allow for simplified administration, while others require separate coverage in each jurisdiction where substantial work occurs. The definition of “substantial” varies by province, creating additional compliance challenges. 

Consider a construction company based in Alberta with projects across Western Canada. If a worker is injured on a Saskatchewan job site but only covered under Alberta's workers’ compensation regime, the employer may face: 

• Claims under Saskatchewan's workers' compensation system. 

• Potential personal injury litigation if coverage is inadequate. 

• Regulatory penalties for non-compliance with Saskatchewan requirements. 

• Complications in co-ordinating benefits between provinces. 

Employment standards concerns 

Beyond workers' compensation, employees working across jurisdictions may be subject to different employment standards, including: 

• Minimum wage requirements that vary significantly across provinces. 

• Overtime calculations and thresholds that differ in methodology and rates. 

• Vacation entitlements with varying accrual rates and timing requirements. 

• Termination notice periods and entitlements including severance and benefits obligations that may be different. 

• Statutory holiday provisions that reflect different provincial priorities and traditions. 

Courts generally apply a “substantial connection” test to determine which provincial employment standards apply. Factors include where the work is performed, where the employee resides, where the contract was entered into, and where the employer operates. This analysis requires careful documentation and legal assessment, particularly for mobile employees. 

It is not uncommon for employees to be permitted to move to another jurisdiction without there being any updates to the written employment agreement. This situation, however, courts disaster if there is ever a parting of the ways that results in a severance payment to the employee. More specifically, if the written employment agreement limits the employee’s severance entitlements to the minimums of the BC Employment Standards Act, and the employee has moved to Ontario, then the severance entitlements in the written contract will no longer pass muster and the employer will inadvertently be required to provide common law rather than statutory notice or payment in lieu. As we know, common law is most often a far larger and more robust entitlement. 

Risk management and compliance strategies 

Employers should conduct regular audits of their workforce to identify employees who may be subject to a different jurisdictions or multiple jurisdictions depending on the nature of the work. This audit will include reviewing the following: 

• The location of residence that the employee declares. 

• Primary work locations and travel patterns. 

• Remote work arrangements and employee residences. 

• Temporary assignments and their expected duration. 

• Client sites where employees regularly perform services. 

Employment contracts should explicitly address jurisdictional issues by: 

• Defining the primary jurisdiction for employment standards purposes. 

• Specifying which provincial laws will govern the employment relationship. 

• Including mobility clauses that address potential jurisdictional changes. 

• Establishing procedures for notification when work locations change. 

Proactive workers’ compensation management requires: 

• Registering in all relevant jurisdictions where employees regularly work. 

• Maintaining accurate payroll reporting across multiple provinces. 

• Understanding interprovincial agreements and reciprocal arrangements. 

• Establishing clear procedures for reporting workplace incidents across jurisdictions. 

Financial and legal implications 

The financial impact of jurisdictional missteps can be substantial. Workers’ compensation premiums vary significantly across provinces, with rates differing based on industry classification, claims history, and provincial policy approaches. Employers may face: 

• Retroactive premium assessments when coverage gaps are discovered. 

• Penalties and interest for late registration or inadequate coverage. 

• Personal director liability in some provinces for unpaid WCB premiums. 

• Exposure to litigation if employees are not properly covered. 

Some practical recommendations for employers include: 

Establish clear policies and procedures: Develop comprehensive policies addressing: 

• Criteria for determining primary work jurisdiction. 

• Procedures for employees changing work locations. 

• Requirements for temporary interprovincial assignments. 

• Documentation standards for jurisdictional determinations. 

Regular legal review and updates: Employment law and workers' compensation requirements evolve, so you should be prepared to: 

• Conduct annual reviews of multi-jurisdictional obligations. 

• Monitor changes in provincial legislation and WCB policies. 

• Consult with legal counsel experienced in multi-provincial employment issues. 

• Participate in industry associations that track regulatory developments. 

Technology and administrative systems: Implement systems that can do the following: 

• Track employee work locations and jurisdictional exposure. 

• Calculate and remit premiums across multiple provinces. 

• Generate reports for compliance monitoring. 

• Alert management to jurisdictional changes requiring attention. 

Future considerations and emerging trends: The landscape of interprovincial employment continues evolving, influenced by the following factors: 

• Increased remote work arrangements post-pandemic. 

• Growing gig economy and contract worker arrangements. 

• Enhanced provincial co-operation on regulatory harmonization. 

• Technology enabling more sophisticated workforce tracking and compliance. 

Decentralized workers’ compensation, employment standards systems 

Successfully managing multi-jurisdictional employment requires proactive planning, contractual updates, comprehensive policies and ongoing attention to regulatory developments. The complexity of Canada's decentralized workers' compensation and employment standards systems demands that employers move beyond reactive compliance toward strategic risk management. 

Employers who invest in understanding and properly managing jurisdictional obligations protect themselves from significant financial exposure while ensuring their employees receive appropriate protection regardless of where they work. In an increasingly mobile workforce, jurisdictional awareness is not just good business practice - it's an essential component of responsible employment management. 

The stakes are too high and the regulations too complex for employers to navigate these challenges without proper preparation and, where necessary, assistance from workplace legal counsel.  

By managing jurisdictional changes carefully and intentionally, employers can confidently expand their operations across Canada while protecting both their business interests and their employees' welfare. 

Richard B. Johnson is a co-founder and partner at Ascent Employment Law in Vancouver.