cleaning employment law: what US and Canadian owners must know

Running a cleaning business involves navigating rules that determine how you classify workers, set pay, schedule hours, and end relationships. These rules differ between the US and Canada, affecting daily operations and risk exposure.

Classifying Workers: Employees or Independent Contractors

In the US, owners must apply the economic realities test under the Fair Labor Standards Act, including IRS factors such as behavioral control, financial control, and relationship type. Cleaning staff who use your equipment, follow your routes, and work set shifts are generally employees. Misclassification can lead to penalties, back taxes, and overtime claims.

In Canada, owners follow Canada Revenue Agency guidelines, considering control and integration factors, plus provincial employment standards. In provinces like Ontario and British Columbia, courts often classify regular cleaners as employees, especially when the business supplies uniforms, schedules jobs, and pays hourly. Written contracts labeling a worker as an independent contractor have limited impact if the day-to-day reality indicates dependence.

Pay Requirements: Minimum Wage and Overtime

In the US, the federal minimum wage is $7.25 per hour, but most states have higher levels ranging from $10 to $16. Overtime applies after 40 hours per week at one and one-half times the regular rate for non-exempt staff, with some states imposing daily overtime after eight or twelve hours.

In Canada, minimum wages range from approximately $13 to $16 per hour, depending on the province, with annual adjustments. Overtime rules usually begin after 40 to 44 hours weekly, or after eight hours daily in provinces like Alberta and British Columbia. Certain provinces also require overtime premiums on statutory holidays.

Exempt Status Considerations

Most cleaning positions in both countries do not meet the criteria for exempt status. In the US, owners must pay at least $684 per week on a salary basis, with primary duties involving management or administration. Field cleaners typically do not qualify.

Canadian legislation offers fewer exemptions for cleaning work. Some provinces provide different overtime rules for supervisors, but base-level cleaners are generally entitled to overtime, regardless of salary.

Ending Employment: Termination and Wrongful Dismissal

In the US, employment is predominantly at-will in 49 states, allowing termination without notice or reason unless it breaches anti-discrimination laws or a contract. Written policies and progressive discipline are advisable, though statutory severance is not mandatory.

Canadian employers must provide statutory notice or pay in lieu according to provincial employment standards, starting at one week and increasing with service length. Common law notice periods can exceed statutory minimums and may extend to several months for long-term employees. Wrongful dismissal claims center on inadequate notice.

Key US and Canada Differences

US regulations are mainly federal with significant state variations, while Canadian rules are largely provincial with minimal federal influence on most cleaning operations. At-will termination is standard in the US but not in Canada. Minimum wage floors and overtime thresholds change more frequently in Canadian provinces. Record-keeping periods differ: US employers generally retain wage records for three years, while Canadian provinces often require four to five years plus specific termination documentation.

Review your worker agreements, time-tracking systems, and termination templates in the context of the specific state or province where each employee works. Consult a local employment lawyer or payroll specialist before making classification changes or issuing final paychecks.