The issue of whether an individual is an employee or an independent contractor can have far-reaching effects on a both the individual and the company for whom he or she provides services. However, companies often pay little attention to either the distinction between the two or the possible effects of an incorrectly described relationship. Without giving much thought to the request, companies often agree to treat individuals as independent contractors at the request of the individuals, who for their part, are simply seeking to minimize their income taxes. Many do not realize that they cannot create and maintain an independent contractor relationship merely by calling it such in a written independent contractor agreement, withholding taxes or ensuring that the contractor is an incorporated entity. Rather, third parties such as Canada Customs and Revenue Agency (“CCRA”), the Workplace Safety and Insurance Board (“WSIB”), the Minister of Labour or the courts have the final say as to whether an individual is an employee or an independent contractor. This paper will explain the distinctions between employees and independent contractors and why it is important that companies pay attention to the distinctions between the two.

Read more by clicking the download button.