How do I know if I am an employee or an independent contractor in Canada?
Courts and the CRA look at the total relationship, not the label in your contract. The key factors are the degree of control the payer has over your work, whether you own your own tools, your chance of profit and risk of loss, and how integrated you are into the payer's business. The more control and integration and the less business risk you bear, the more likely you are an employee.
What is a dependent contractor?
Canadian law recognizes an intermediate category between employee and independent contractor. A dependent contractor works largely or exclusively for one payer over a significant period and, although not a full employee, is economically dependent on that payer. Dependent contractors are entitled to reasonable notice of termination, similar to employees, even though they may handle their own taxes.
What happens if I have been misclassified as a contractor?
If you are found to be a misclassified employee, you may be owed unpaid vacation pay, overtime, public holiday pay, and termination and severance pay, plus the employer's share of CPP and EI. The CRA can also reassess both parties for unremitted source deductions. Misclassification exposes employers to significant liability, so these claims are taken seriously.
Does my contract calling me a contractor settle the issue?
No. A label in the contract is only one factor and does not control. If the actual working relationship has the hallmarks of employment — close control, integration into the business, no genuine business of your own — courts and the CRA will treat you as an employee regardless of what the contract says.