An employer must retain and transfer an employee`s: Keenan factors are best understood as developing McCormick factors – they talk about employer control and economic dependence. For example, a person who provides services to multiple employers is less likely to be economically dependent on a single employer and therefore more likely to be a true independent contractor. Nevertheless, it is important to note that no factor determines or has more weight than the others. To determine the nature of the employment relationship and the rights deriving from it, a 2-step analysis is required. The first step is to determine whether it is a contractor or an employee. If it is determined that it is an employee, the analysis stops at this point. If they are not an employee, the 2. Determine if it is an independent contractor or a dependent contractor. The cost of using the tools is a much better indication of this test. According to the CRA, decisions regarding independent contractors are extremely complex and require legal support in almost all cases. If you are an independent contractor or employer and would like to learn more about your options, give us a call. An independent contractor is in business for himself.

An employee, on the other hand, would be in business for his employer. There are tests for this, which are discussed in detail in this article. “But even if I had concluded that Ms. Cormier was an independent contractor from 1994 to 2004, I think it would have been fundamentally wrong to ignore those years of her relationship when establishing the appropriate notice period. The court would have to consider all the circumstances, and in the immediate case, even if I had concluded that Ms. Cormier was an independent contractor, I would not have ignored those years of her relationship. In both cases, having regard to all the relevant factors and the particular circumstances of this case, I conclude that Ms Cormier`s reasonable period of notice at the time of her dismissal is twenty-one months. More recently, in Thurston v. Ontario (Children`s Lawyer), 2018 ONSC 2137, the Ontario Superior Court of Justice ruled that a lawyer who received an average of 40% of his or her income from a single client was economically dependent on that client. Currently, the rights of dependent entrepreneurs are limited to 1) the right to appropriate dismissal and 2) the right to unionization. It is not yet clear whether dependent contractors share other rights with employees.

Always anchor your relationship with each employer in a contract and focus on the first three points of this four-point test. This decision could have a significant impact on the future law. It is proposed that when an independent contractor becomes an employee, he or she may be entitled to appropriate dismissal under the common law based on the entire duration of his or her employment relationship. Prior to this decision, it was generally assumed that you would only be entitled to reasonable notice under the common law during your tenure as an employee. The jurisprudence of the independent contractor tends more and more in favor of the entrepreneur. Below are guidelines to help you determine if a person is an employee or an independent contractor. The following is based on an article by Robert Mot, CA published in the November 1990 issue of CMA Magazine and a February 19, 1986 op-ed provided by KMG Thorne Riddell, Chartered Accountants, for Camosun University. Work performed by employees to their employers is not subject to Harmonized Value Added Tax (HST). Contractors charge HST for their services. Entrepreneurs should consult with their tax advisors about the HST, “pre-tax credits” and what needs to be transferred to the government.

What are the differences between employees and independent contractors? There may be special status for independent contractors in various occupational health and safety and insurance systems. In Ontario, for example, individuals can apply for optional insurance for “independent operators.” Not only does this benefit the contractor (also known as the operator), but it also provides important legal protection for the business, as workers who are entitled to benefits under Ontario`s Workplace Safety and Insurance Act for work-related injuries are generally excluded from civil suits (i.e., personal injury lawsuits) to obtain compensation for work-related injuries. On the other hand, without optional coverage, an independent operator may be free to sue the company for damages related to an employment injury. Full-time employees typically work exclusively for a single employer and often have access to benefits (such as health insurance or a pension plan) offered by their employer. An employee typically uses the employer`s tools, office, or workspaces and resources to do the work they do for the employer. An employee reports to his or her employer, and the employee`s performance can be evaluated by the employer. In Ligocki v. Allianz Insurance Co. of Canada, 2010 ONSC 1166 (CanLII), 100 O.R.

3(d) 624, the Court found that the employee`s use of a registered corporation did not go beyond the finding that he was an employee at all times. Hennessey J. noted that the situation in this case had no evidence of an independent contractor relationship, except in the manner in which the plaintiff was paid and the manner in which he reported his income. One thing you need to weigh carefully is why you want to hire an independent contractor. Is that your goal, just termination money, severance pay, etc. to avoid? Are you trying to avoid job performance, the Canada Pension Plan, etc.? Most people who think they are independent contractors are employees or dependent contractors. Employees and dependent contractors are eligible for the common law notice, which is typically $10 out of thousands of dollars and often reaches six-figure amounts for long-term or older employees. An employer will often be “vicariously responsible” for the actions of its employees.

For example, if an employee works and makes a mistake and someone is injured as a result of that mistake, the employer may be responsible for the injury. As a general rule, the liability of executing agents does not apply to contractors who are independent of any action. There are a number of considerations to consider when determining whether a person is an employee or an independent contractor for income tax purposes, and the courts have developed important tests over the years to determine this. Four of the most important criteria are: The difference between an independent contractor or an employee can have a significant impact on your Canadian income tax, especially if you think you are a contractor but the Canada Revenue Agency (CRA) decides you are not after you have already filed multiple tax returns. Discuss the issue with your accountant or contact the Canada Revenue Agency if you have taken any action, but still do not know if you are really an employee or an independent contractor. .