Presentation hiring extra hands


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Presentation hiring extra hands

  1. 1. Hiring Extra Hands: How to Protect yourself<br />RAYNA SHIENFIELD <br />BARRISTER & SOLICITOR<br />
  2. 2. Employees v. independent contractors<br />Employer basics<br />Contracts<br />Discussion & questions<br />WHAT’S IN STORE...<br />
  3. 3. Employees v. Independent Contractors<br />
  4. 4. Employer:<br />Administrative perspective – easier to hire an independent contractor<br />Liability - hiring an independent contractor limits employer’s liability <br />Payroll taxes (income tax, EI, CPP, EHT)<br />Employment Standards Act requirements  ie. payments on termination<br />Do not have as much control over the worker – this could be a good or bad thing<br />Worker<br />Benefits to worker – entitles worker to deduct business expenses from gross income<br />WHY DOES IT MATTER?<br />
  5. 5. BUT…it’s not that easy<br />The choice is not actually that of the employer<br />Can put a contract describing an individual as an independent contractor into place but that does not necessarily mean s/he is, at law, an independent contractor<br />MORE THAN JUST A NAME<br />
  6. 6. Degree of control an employer has over determining method of work, hours<br />Whether or not worker provides tools <br />Whether worker is subject to employer’s policies<br />Degree of financial risk taken by the worker / worker’s opportunity for profit<br />Economic dependence of worker on one company<br />Status is not affected by whether worker is paid directly to worker to a personal corporation<br />DETERMINING FACTORS<br />
  7. 7. CRA: <br />Employer needs to pay unremitted tax plus unpaid CPP and EI, plus penalties & interest<br />Must defend a challenge in the Tax Court of Canada<br />Workplace Safety and Insurance:<br />Investigation<br />Fines<br />Payment of outstanding premiums plus interest<br />WHAT HAPPENS IF YOU CLASSIFY INCORRECTLY?<br />
  8. 8. Wrongful dismissal claims<br />Court will disregard termination provisions in an independent contractor agreement if the worker is found to be an employee<br />liability for minimum notice under the Employment Standards Act, plus common law notice.<br />Braiden v. La-Z-Boy Canada Ltd. (OCA) - sales rep was designated as an independent contractor by the company, but court found the designation invalid. There was a 60 day notice provision in the contract, but because of wrong classification that was invalid and 20 months of notice was awarded<br />WHAT HAPPENS IF YOU CLASSIFY INCORRECTLY CONT…<br />
  9. 9. EMPLOYER BASICS<br />
  10. 10. One of the reasons people don’t want to have employees is because of the obligations under the Employment Standards Act  Only apply if worker is an employee and not an independent contractor<br />Entitles worker to certain benefits and protections:<br />Overtime pay<br />Personal and parental leave<br />Vacation pay<br />Notice or pay in lieu of notice, severance<br />EMPLOYMENT STANDARDS ACT OBLIGATIONS<br />
  11. 11. Basically anyone<br />Do not need to be a registered company<br />You do need a Business Number with a payroll deductions account before employee starts work (through CRA)<br /><br />WHO CAN HIRE AN EMPLOYEE?<br />
  12. 12. Get employee’s social insurance number<br />Have the employee fill out Form TD1 (Personal Tax Credits Return)<br />Make sure you are compliant with the Ontario Employment Standards Act* <br />There is a guide on the Ministry of Labour website for employers – print this out & read it!<br />Lots of little things are regulated – breaks, overtime, vacation time, vacation pay<br />MAIN THINGS TO REMEMBER<br />*in some cases governed by Federal Canada Labour Code<br />
  13. 13. CONTRACTS<br />
  14. 14. Should be put into place for both employees and independent contractors<br />Best to do BEFORE THE WORKER STARTS<br />Important to classify the worker – BE REALISTIC<br />If worker is an employee, can’t contract out of the Employment Standards Act minimums<br />CONTRACTS – THE BASICS<br />
  15. 15. WHAT GOES INTO A CONTRACT?<br />Employee<br />Independent Contractor<br />Position<br />Compensation <br />Confidentiality <br />Proprietary Rights<br />Termination<br />Severability<br />Non-solicit<br />Starting Date (and Ending Date if for a fixed term)<br />Services<br />Payment<br />Confidentiality<br />Proprietary rights<br />Termination<br />Severability<br />Non-solicit<br />Term<br />
  16. 16. WHAT GOES INTO A CONTRACT?<br />Employee <br />Independent Contractor<br />Vacation<br />Hours of Work<br />Non-compete <br />Policies<br />Duty of loyalty<br />Relationship<br />Expenses, taxes<br />Tools<br />Invoicing<br />Non-assignment<br />Indemnification<br />
  17. 17. Sets expectations on things such as:<br />Payment<br />What / when / how the work is to be done<br />Who is responsible for what<br />Time off entitlements<br />Protects parties in case of relationship breakdown:<br />Termination provisions<br />Solicitation of other workers<br />Proprietary rights<br />HOW DOES A CONTRACT PROTECT YOU?<br />