Employee vs Subcontractor Part II

Part I is here - https://www.youtube.com/watch?v=VKiKz821vVY&t=478s

Ministry of Labour, WSIB, CRA and the courts may be requested to make the determination whether a person was the company’s employee or subcontractor. The determination is done based on the tests explained in Part I and might result in huge financial liabilities for a company to pay. In some cases, the total amount could reach 25%-30% of an annual income multiplied by the number of years that a person was employed.

In order to mitigate and avoid this liability, a business owner must act as follows:

a. Prepare a proper subcontractor agreement that will provide the response to each of the tests;
b. Make sure the reality is not absolutely disconnected from the agreement;
c. Act to receive the determination of CRA and WSIB of the status of a person at the beginning of the relations (see the links for the websites below)
d. Re-evaluate the status of the relations each time there is a material change in the circumstances.

Links:
WSIB: http://www.wsib.on.ca/WSIBPortal/faces/WSIBArticlePage?fGUID=939604048075007030&_afrLoop=1315758193260000&_afrWindowMode=0&_afrWindowId=ai2rhvl1i_1#%40%3F_afrWindowId%3Dai2rhvl1i_1%26_afrLoop%3D1315758193260000%26_afrWindowMode%3D0%26fGUID%3D939604048075007030%26_adf.ctrl-state%3Dai2rhvl1i_25

CRA:
https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/cpt1.html

Please contact us at [email protected] if you need our professional assistance with drafting your subcontractor agreements or reviewing and evaluating your relations with subcontractors.



All information provided in this video is for informational and reference purpose only. Nothing contained herein shall be considered as a legal advice or instructions to be acted upon. CBES – Canadian Business and Enterprise Services does not offer legal advice online or on its YouTube channel. Please consult a professional before you act in reliance on the information contained in our videos.

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