{"id":1327,"date":"2024-11-19T06:17:32","date_gmt":"2024-11-19T11:17:32","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/?post_type=chapter&#038;p=1327"},"modified":"2024-11-19T07:08:07","modified_gmt":"2024-11-19T12:08:07","slug":"independent-contractor-or-employee","status":"publish","type":"chapter","link":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/chapter\/independent-contractor-or-employee\/","title":{"raw":"Independent Contractor or Employee","rendered":"Independent Contractor or Employee"},"content":{"raw":"It is common for workers in the trades industry to be either a self-employed independent contractor or an employee of an organization.\u00a0 It is not always clear of whether a person is in a business relationship (self-employed independent contractor) or in an employee-employer relationship.\u00a0 It is important to establish and understand what type of contractual relationship a trades worker has with the paying agency to ensure the duties that one is contractually obligated to perform and is being paid correctly.\r\n\r\nGenerally, there are four primary criteria that are looked upon in establishing the type of employer or business relationship:\r\n<ul>\r\n \t<li><strong>Control<\/strong> \u2013 more control is generally exercised by an employer over an employee concerning the manner in which the work is done and what work will be done. The self-employed worker may be given blueprints or other specifications to complete a specific contract; however, this does not indicate control over the way the work is to be done.<\/li>\r\n \t<li><strong>Financial Risk<\/strong> \u2013 self-employed individuals usually have a chance of profit or risk of loss. Employees usually will not have any financial risk as any expenses are reimbursed, and they will not incur fixed ongoing costs.<\/li>\r\n \t<li><strong>Integration<\/strong> \u2013 An employee does not normally have the ability to hire and send their own replacement. Employees must normally render the work services personally.\u00a0 An employee is not perceived as operating their own business, but rather as an integral part of the payer\u2019s business.<\/li>\r\n \t<li><strong>Tools and equipment<\/strong> \u2013 self-employed individuals usually provide their own tools and equipment and are responsible for its cost of replacement, repair, and insurance.\u00a0 The fact that a worker is required to supply their own hand tools does not indicate the worker is self-employed.<\/li>\r\n<\/ul>\r\n<span style=\"text-decoration: underline\">Workers in the Construction Industry<\/span>\r\n\r\nFor workers in the construction industry, the continuum of being an employee vs. independent contractor is not always easy to decipher.\u00a0 Canada Revenue Agency has established increased <a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/services\/tax\/canada-pension-plan-cpp-employment-insurance-ei-rulings\/cpp-ei-explained\/canada-pension-plan-employment-insurance-explained-1.html\" target=\"_blank\" rel=\"noopener\">guidance<\/a> for this industry.\r\n\r\nAlmost all [pb_glossary id=\"1333\"]trade apprentices[\/pb_glossary] are considered to be employees.\u00a0 This is due to the fact that apprentices need to be supervised under a [pb_glossary id=\"583\"]certified journeyperson[\/pb_glossary] (or equivalent) so they do not have much control how or when the work is to be performed.\u00a0 Trade apprentices usually also do not take on any financial risk.\u00a0 Therefore, the scope of this resource handbook will focus on \u2018Understanding Your Pay\u2019 as an employee.\r\n\r\n&nbsp;","rendered":"<p>It is common for workers in the trades industry to be either a self-employed independent contractor or an employee of an organization.\u00a0 It is not always clear of whether a person is in a business relationship (self-employed independent contractor) or in an employee-employer relationship.\u00a0 It is important to establish and understand what type of contractual relationship a trades worker has with the paying agency to ensure the duties that one is contractually obligated to perform and is being paid correctly.<\/p>\n<p>Generally, there are four primary criteria that are looked upon in establishing the type of employer or business relationship:<\/p>\n<ul>\n<li><strong>Control<\/strong> \u2013 more control is generally exercised by an employer over an employee concerning the manner in which the work is done and what work will be done. The self-employed worker may be given blueprints or other specifications to complete a specific contract; however, this does not indicate control over the way the work is to be done.<\/li>\n<li><strong>Financial Risk<\/strong> \u2013 self-employed individuals usually have a chance of profit or risk of loss. Employees usually will not have any financial risk as any expenses are reimbursed, and they will not incur fixed ongoing costs.<\/li>\n<li><strong>Integration<\/strong> \u2013 An employee does not normally have the ability to hire and send their own replacement. Employees must normally render the work services personally.\u00a0 An employee is not perceived as operating their own business, but rather as an integral part of the payer\u2019s business.<\/li>\n<li><strong>Tools and equipment<\/strong> \u2013 self-employed individuals usually provide their own tools and equipment and are responsible for its cost of replacement, repair, and insurance.\u00a0 The fact that a worker is required to supply their own hand tools does not indicate the worker is self-employed.<\/li>\n<\/ul>\n<p><span style=\"text-decoration: underline\">Workers in the Construction Industry<\/span><\/p>\n<p>For workers in the construction industry, the continuum of being an employee vs. independent contractor is not always easy to decipher.\u00a0 Canada Revenue Agency has established increased <a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/services\/tax\/canada-pension-plan-cpp-employment-insurance-ei-rulings\/cpp-ei-explained\/canada-pension-plan-employment-insurance-explained-1.html\" target=\"_blank\" rel=\"noopener\">guidance<\/a> for this industry.<\/p>\n<p>Almost all <a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1327_1333\">trade apprentices<\/a> are considered to be employees.\u00a0 This is due to the fact that apprentices need to be supervised under a <a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_1327_583\">certified journeyperson<\/a> (or equivalent) so they do not have much control how or when the work is to be performed.\u00a0 Trade apprentices usually also do not take on any financial risk.\u00a0 Therefore, the scope of this resource handbook will focus on \u2018Understanding Your Pay\u2019 as an employee.<\/p>\n<p>&nbsp;<\/p>\n<div class=\"glossary\"><span class=\"screen-reader-text\" id=\"definition\">definition<\/span><template id=\"term_1327_1333\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1327_1333\"><div tabindex=\"-1\"><p>an individual who is registered in a specialized trades training program acquiring skills and competencies through a combination of on-the-job training and classroom learning<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_1327_583\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_1327_583\"><div tabindex=\"-1\"><p>individual who is fully certified and can work in the full scope of the trade.\u00a0 Many trades require a Red Seal Endorsement to be fully trade certified in Canada.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><\/div>","protected":false},"author":1780,"menu_order":2,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":["anne-lee"],"pb_section_license":"cc-by-nc-nd"},"chapter-type":[48],"contributor":[61],"license":[58],"class_list":["post-1327","chapter","type-chapter","status-publish","hentry","chapter-type-standard","contributor-anne-lee","license-cc-by-nc-nd"],"part":155,"_links":{"self":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapters\/1327","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/wp\/v2\/users\/1780"}],"version-history":[{"count":4,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapters\/1327\/revisions"}],"predecessor-version":[{"id":1337,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapters\/1327\/revisions\/1337"}],"part":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/parts\/155"}],"metadata":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapters\/1327\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/wp\/v2\/media?parent=1327"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapter-type?post=1327"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/wp\/v2\/contributor?post=1327"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/wp\/v2\/license?post=1327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}