Supporting Employee Mental Health at Work: A Guide for Canadian Employers

Focusing on employee wellbeing is now a core part of running any successful business. Every year, 1 in 5 Canadians experiences a mental health problem or illness. These challenges don’t stay at home, they show up in the workplace through stress, disengagement, and burnout.

For SMEs, this can mean higher disability claims, lost productivity, and rising costs. Addressing workplace mental health in Canada isn’t just compassionate, it’s a business essential.

Why mental health matters for your business

• Around 500,000 Canadians are unable to work in a typical week due to mental-health concerns.
• Mental illness drives some of the highest short- and long-term disability costs for employers.
• Businesses that prioritize employee wellbeing experience stronger retention, better morale, and significantly reduced absenteeism.

Supporting mental health is one of the most effective ways to protect your workforce, and your bottom line.

Employer responsibilities: What the law says

In Canada, employers must provide a physically and psychologically safe workplace. That includes reducing known risks, preventing harm, and offering reasonable support when employees disclose a mental-health need.

A mental illness is treated as a disability (a protected ground under the human rights law), which means you must explore mental health accommodation options up to the point of undue hardship. Flexibility, modified duties, temporary scheduling changes, and access to resources are common approaches.

The National Standard of Canada for Psychological Health and Safety in the Workplace (CSA Z1003) is a voluntary but highly respected framework that helps employers build safer, healthier work environments. It’s especially useful as a roadmap for small businesses that may lack internal HR teams to manage employee wellbeing and mental health concerns.

Common workplace factors that harm mental health

Challenges inside the workplace often contribute to poor mental health. Examples include:

• Unclear roles, constant change, or lack of direction
• High workload or chronic overtime leading to workplace burnout
• Limited resources or lack of managerial support
• Conflict, isolation, or poor communication
• Job insecurity or rapid organizational shifts

Addressing these “psychosocial hazards” is a key part of improving psychological health and safety.

How employers can support employees: a checklist

1. Create a mental health policy

A clear, simple mental health policy helps managers and employees understand what to do when concerns arise. Include accommodation steps, confidentiality rules, and available support.

2. Train supervisors and frontline leaders

Managers should know how to spot early signs of stress or burnout, start supportive conversations, and guide employees toward resources—without diagnosing or prying.

3. Encourage open, stigma-free communication

Create a culture where employees feel safe speaking up when struggling with mental health. Leaders should model this openness by checking in regularly and showing empathy.

4. Offer flexible and thoughtful accommodations

Common mental health accommodation measures include:

• Flexible start/end times
• Modified job duties
• Temporary remote work options
• Reduced or adjusted workloads

Even small adjustments can help employees stay productive.

5. Provide access to mental-health resources

Direct employees to your EAP, community resources, mental-health clinics, or wellness tools. SMEs benefit greatly from structured programs that offer mental-health support for small businesses.

6. Monitor performance and follow up

Schedule check-ins after accommodations are implemented. This shows support, ensures improvements, and allows you to adjust the plan if needed.

How supporting mental health helps small businesses thrive

Investing in employee wellbeing pays off. Employers often see:

• Lower turnover and stronger loyalty
• Higher productivity and engagement
• Better workplace culture
• Fewer disability claims and reduced absenteeism
• A more resilient, future-ready workforce

Supporting mental health is no longer optional but part of smart, modern business management.

Need help creating a mental health policy for your workplace?

Our experts can help you build your mental health policy and support your obligations around physical and psychological health and safety. To learn how we can help your business, call a Peninsula advisor today at 1-833-247-3652.