Independent Contractor Lawyer
Many employees come to our firm for consultation regarding their classification. Are they an independent contractor or are they an employee?
It turns out, many workers today are classified by themselves or by their employer as an “independent contractor”. However, in most cases, the classification is wrong, and the worker is actually an employee – and entitled to the same rights and benefits employees are (with the same tax consequences, unfortunately). For example, this means that if they are let go, they can demand or sue for reasonable notice (i.e. termination pay).
Workers benefit from being classified as an independent contractor by paying less pay roll taxes and being able to deduct expenses. At the same time, employers benefit from classifying their workers as independent contractors by not having to pay for employee payroll taxes, vacation pay, holiday pay, overtime, minimum wage and termination pay or severance. This is a much bigger advantage for employers, usually.
In our experience, most workers who are classified as independent contractors are wrong. If the employer exerts any real control over the worker, then the worker is likely an employee, not an independent contractor. It makes no difference if the worker signed a contract stating he or she is an independent contractor. The only thing that matters is the true substance of the relationship. A worker will be be considered an “independent contractor” only if:
- the employer exerts little control over the worker;
- the employee owns the tools of his trade;
- the worker has a risk or profit and loss (not simply the earning or not earning of wages);
- and the worker is essentially in business for himself.
Dutton Employment Law is an independent contractor law firm.
For more information in clarifying whether you are actually an independent contractor or if you have questions about the implications of being an independent contractor (i.e. taxes, rights and benefits), contact a Toronto independent contractor lawyer today.