TWL Employment Law Insights: Hiring Independent Contractors vs Employees. What's the difference?


Your amazing business is growing and its time for you to hire! Exciting!

In case you haven't considered the difference between Independent Contractors and Employees, it's always a good idea to refresh your memory to ensure legal compliance and a healthy working relationship. Employment status ties directly to liabilities, benefits, along with financial and tax implications.

While the terms are often used interchangeably, there are significant differences between independent contractors and employees in the eyes of the law. In particular, the Employment Standards Act does not apply to independent contractors.

An individual may be considered an employee or an independent contractor when at least some of the following points describe the business relationship:

Independent Contractors

  • An independent contractor is a person that is in business for themselves

  • Usually provides services or can provide services to more than one company

  • An independent contractor can profit but can also lose money in the business relationship

  • Do not receive employee benefits from the employer

  • Can decide how, when or where the work is to be performed

Employees

  • Usually work for one employer

  • Usually work at the employer's place of business during hours set by the employer

  • Often receives employment benefits (i.e. health benefits)

  • Work under the control of the employer and completes tasks in the manner that the employer has requested

  • Receives net salary after employer has applied all requisite deductions (i.e. income tax)

  • Has the protection of work place safety and employment anti-discrimination laws

If you've read the article, and conducted your own research but still are unsure how to proceed, feel free to reach out! Our proven Employment Legal and Litigation talent brings proven experience, helping organizations like yours operate and grow.


 

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