This publication presents general information about how contractors and employees differ and why the differences matter. It explains how being an employee or a contractor can determine what laws and regulations apply and what types of taxes, premiums and contributions must be paid. It also explains how government organizations decide who is and who is not an employee ora contractor for the purposes of:
• taxation
• employment standards
• occupational health and safety
• workers’ compensation
Who it’s for
The information in this publication can help anyone who is working as a contractor or thinking about starting a contracting career, working with contractors, planning to hire a contractor’s services, or exploring whether someone is a contractor or an employee.
What’s included
Many government organizations administer work-related programs or enforce legislation that deals with work-related issues. Different parties in a work relationship have different roles, responsibilities, entitlements and liabilities, and different organizations define work relationships in different ways.
Employees, employers or contractors need to know what rights and responsibilities they have in work relationships.
This publication explains how different organizations define the parties of a work relationship and tells you where to find more information.
The publication includes a number of tables that make it easy to see at a glance how an employee is different from a contractor. It includes contact information for the various government organizations that deal with work-related issues.
What’s not included
The intent of this publication is not to give any legal counsel or answers. The interpretation of employment status is a complicated legal question and independent legal advice may be necessary.
Work arrangements can vary. Work relationships between those hiring and those hired can also vary. Often those paying for work or services hire a person or a firm to do the work under contract. Someone who works under contract can be either a contract employee or an independent contractor:
• Employees (or contract employees) work under an employer–employee relationship or “contract of service.”
• Contractors carry out their work under an independent business–contractor relationship or “contract for service.”Different groups, including different government
organizations, may use their own terms to describe contract-for-service workers or independent contractors.
Independent contractors are known as freelancers, consultants or simply contractors. For simplicity, this publication uses the term “contractor” to refer to all independent contractors.
Freelancing is often associated with a certain type of work—like writing, for example. Consulting may bring to mind independent professionals such as engineers or management advisers. Contracting is often associated with the construction industry. However, a contractor could supply almost any kind of work. For example, a contractor could
do janitorial work, sewing, carpentry or other trades work or provide services such as environmental monitoring, hauling or courier deliveries. A contractor could provide healthrelated services such as private-care nursing or education-related services such as teaching or tutoring—even though health care and education are usually connected with hospitals and schools. No matter what type of work or service they provide, what all contractors have in common is being independent.
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