Employment Standards

What’s the Difference between an Employee and an Independent Contractor?

By August 28, 2017 No Comments

Learn the difference between an employee and an independent contractor in Ontario and what you’re entitled to under the Employment Standards Act.

Who is an employee

You may be considered an employee, under the Employment Standards Act, when at least some of the following describes your work:

  • the business provides you with tools, equipment or materials to perform work
  • your pay is not affected by the way you do your work (e.g. if you work faster or create a better product, you will not necessarily be paid more)
  • you cannot subcontract your work to another person
  • the business has the right to suspend, dismiss or otherwise discipline you

the business decides:

  • what you do
  • how much you will be paid
  • when the work needs to completed by
  • how and where you complete your work

Who is an independent contractor

  • You may be considered an independent contractor when at least some of the following describes your work:
  • you own and are responsible for some or all of the tools or equipment you use to do your job
  • you are in business for yourself, make profit and have a risk of losing money from the work you do
  • you determine how and/or where your work is completed
  • you can subcontract some of your work
  • the business can end your contract for services, but cannot discipline you

Common misconceptions

You may still be considered an employee even if you:

  • agree (verbally or in writing) to be an independent contractor
  • charge HST
  • submit invoices
  • use your own vehicle for work purposes
  • don’t have statutory deductions (e.g. tax, CPP, EI) taken from your pay

Your rights as an employee

 

If you are considered an employee under the Employment Standards Act, you may be entitled to employment rights such as:

 

  • minimum wage
  • overtime pay
  • public holidays
  • vacation with pay

Learn more about your rights under the Act.

Please note, the Employment Standards Act provides minimum standards only.

You may have greater rights under an employment contract, collective agreement, the common law or other legislation.

If you’re unsure, please talk to a lawyer.

Help determining if you’re an employee or independent contractor

It may be difficult to determine your employment status.

For example, you may own or be responsible for some or all of your tools and equipment, but you may not have control over your work, hours or rate of pay.

In these circumstances, we recommend you talk to a lawyer to help you determine your employment status.