Hiring your first employee in Ontario: what the law expects before day one
Caleesis TeleshFounder & Principal Lawyer
Your first hire changes your legal position more than almost anything else your business will do. The moment someone works for you in Ontario, the Employment Standards Act, the Human Rights Code, WSIB, and the common law of employment all apply at once, and several of them punish sequencing mistakes that are easy to avoid and impossible to undo. Here is what has to happen before day one, in order.
Get the contract signed before the start date
This is the sequencing mistake that costs the most. An employment contract only binds if the employee got something for signing it, and the job offer itself is that something. Present the contract after the person has already started and the exchange is gone. Ontario courts have repeatedly held that a contract signed after the start date, without something new given in return, is unenforceable. The practical rule is simple: written offer, contract attached, signed and returned before the first shift. No signature, no start.
The clause that matters most is termination. Without an enforceable termination clause, a dismissed employee is owed reasonable notice at common law, often months of pay even for short service. With one, your exposure can be limited toward the ESA minimums. But the drafting bar is high. Since the Court of Appeal's decision in Waksdale v. Swegon North America in 2020, a defect anywhere in the termination language voids the entire termination scheme, and the usual defect is a with-cause provision drafted broader than the ESA allows. Termination clauses fail constantly on this. It is the one clause worth paying a lawyer to draft.
Know the ESA floor you cannot contract around
The Employment Standards Act sets minimums no contract can undercut. Any term that tries is void, and the ESA standard applies instead. As of October 1, 2025, the general minimum wage is $17.60 an hour. Vacation starts at two weeks (4% vacation pay), rising to three weeks at five years of service. Overtime is time and a half after 44 hours in a week. Employees get a 30-minute eating period within every five consecutive hours of work, public holidays with holiday pay, and job-protected leaves. After three months of service, termination requires written notice or pay in lieu, scaling to eight weeks at eight years.
Two newer rules catch employers off guard. Non-compete clauses in employment contracts have been banned in Ontario since October 2021, outside a sale of business and genuine executive roles. Put one in a regular contract and it is void, and it can colour how a court reads the rest of the agreement. Properly drafted non-solicitation and confidentiality clauses remain available and do most of the protective work anyway. And employers must give each new hire specified written information (employer name, work location, wage, pay period, hours) before or soon after their first day.
Interviews: what you cannot ask
Ontario's Human Rights Code applies to the hiring process, not just the workplace. Questions about age, marital or family status, where someone was born, citizenship, religion, disability, or pregnancy plans invite a discrimination complaint regardless of your intent. The compliant versions ask about the job instead: whether the candidate is legally entitled to work in Canada, not where they are from; whether they can work the required schedule, not their religion or childcare; whether anything would prevent them from performing the essential duties, not whether they have a disability. If a candidate needs accommodation to do the job, the duty to accommodate to the point of undue hardship applies, including during the interview itself.
Register before the deadlines, not after
- Register with WSIB within ten calendar days. Most Ontario businesses must register with the Workplace Safety and Insurance Board within ten days of the first hire. Late registration means retroactive premiums and penalties; an injury while unregistered is a much bigger problem.
- Open the CRA payroll account before the first remittance. You withhold income tax, CPP, and EI from the first paycheque, and remit on the CRA's schedule. Missed remittances carry some of the CRA's steepest penalties, and directors are personally liable for unremitted source deductions.
- Set up the workplace basics from day one. Ontario requires health and safety awareness training for every worker and supervisor, the mandatory ESA poster, workplace violence and harassment policies once you have workers, and an accessibility policy as you grow. None of it is hard; all of it is checked when something goes wrong.
Coming in January: pay transparency
A new round of ESA job posting rules takes effect on January 1, 2026, for employers with 25 or more employees: publicly advertised postings must state expected compensation or a range no wider than $50,000, must disclose whether artificial intelligence is used to screen applicants, cannot require Canadian experience, and interviewed candidates must be told the outcome within 45 days. A first-time employer will not meet the 25-employee threshold, but growing businesses should build the habit now. The recruitment file you keep today is the record-keeping those rules will demand.
The contractor shortcut is not one
If the plan is to sidestep all of this by hiring a contractor instead, be honest about the substance: control, tools, exclusivity, and integration decide the question, not the label on the invoice. We covered what misclassification costs in our post on the legal mistakes that sink new businesses: retroactive deductions, ESA entitlements, and termination pay for someone you thought you could simply stop calling.
Hiring well is a legal exercise exactly once. After that, the template you built does the work. Telesh Law Firm Professional Corp can set up your first-hire package so the second hire is just a signature.
- For businesses
- Step-by-step guide
- Deadlines
- Rule changes
This article is general information, not legal advice, and does not create a solicitor-client relationship. It is current as at its publication date and is not revised as the law changes. For advice on your specific situation, book a consultation or call 416-639-0887.
LL.B.B.A., York UniversityMember, Law Society of Ontario
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