OCA Annual Conference
Saturday, October 25, 2014
The Ontario Chiropractic Association’s
professional development day.
OCTOBER 25, 2014
Save the Date
Gui d an c e : Employee or Independent Contractor?
dding to your clinic team affords you the opportunity to create lasting and profitable
relationships. Getting the parameters of those relationships right lays the
foundation for a fruitful business relationship. David Mills, a partner at Mills & Mills
LLP, believes that determining whether or not a new addition to your team will act as
an independent contractor or as an employee of your business is a crucial first step.
What is an Independent Contractor?
Independent contractors work for
themselves and provide contracted services
to your business. This usually means that
they are responsible for their own tax
withholdings and will pay taxes on income
from a business they have established.
Independent contractors generally enjoy
the deductibility benefits of a corporation
and are not regulated under the
Employment Standards Act. A bookkeeper
serving multiple clients using their own
facilities and determining their own work
schedule is an example of an independent
contractor you may retain.
What is an Employee?
An employee works directly for your
business. They would pay income tax
based on their employment income from
you and have limited deductibility options
at tax time. As the employer, you will be
responsible for taking the appropriate
withholdings from their pay, including
income tax, and Canada Pension Plan
and Employment Insurance premiums.
Employees’ rights are protected by the
Employment Standards Act and other
legislation, such as the Occupational
Health and Safety Act. A Chiropractic
Health Assistant who is paid an hourly
wage and is managed directly by you is an
example of an employee.
When is an Associate an Employee?
Determining whether or not an associate
chiropractor or other health care
practitioner you have brought into your
practice is an employee or an independent
contractor can be tricky.
Your Associate is likely an Independent
Contractor if he or she:
Sets their own hours,
Uses their own equipment, and,
pends most of their time seeing
“their own” patients.
Your Associate is likely an Employee
if he or she:
orks on a schedule determined
s an important and integral part
of your practice,
Uses your equipment, and,
eceives set wages as all or a portion
of their compensation.
Contractor or Employee: Who Makes
the Final Determination?
Generally, the parties involved, such as you
and an associate, will determine the most
appropriate way to formalize your working
arrangement. The Canada Revenue Agency
(CRA) and the courts do have a say in
the matter, however. Several “tests” have
been developed to help employers and
regulators make determinations about
the status of an employee or contractor.
These focus on issues such as the level of
control you have over the individual in
question, how integral they are to your
business and whether or not their role
in your business will be ongoing. CRA
and the courts are likely to take elements
from the various tests to make a final
determination should such an action become
necessary. How much control is exerted
over the individual’s time, actions and
responsibilities is often a dominant factor.
There are pros and cons to having both
independent contractors and employees
working within your practice. As there
is no definitive litmus test to determine
whether or not an individual is an
employee or a contractor, it is wise to
consult a lawyer with experience in
employment law matters. Making the
incorrect choice can have a significant
impact on your business.
The OCA would like to thank Mills & Mills LLP
for their assistance in the preparation of this
article. For more information about Mills &
Mills LLP, please visit www.chiropractic.on.ca/