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    What is the difference between and employee and an independent contractor?
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    An employee is someone who is under the direct supervision and control of an employer whereas an independent contractor carries on business on their own account. Whether someone providing services is classified as an employee or an independent contractor can be important for a number of reasons. Employees are typically governed by employment legislation that requires employers to do certain things such as remit benefit matching payments (for example, the Canadian Pension Plan in Ontario). Employees will typically have more stringent requirements for termination as well (in other words, they will have to be given notice and/or pay in lieu of notice on termination). An “employer” typically has a great deal less responsibility for an independent contractor than an employee.

    There is no universal test to determine whether a person is an employee or an independent contractor. The central question is whether the person performing the services is doing so as a person in business on his or her own account. The following are some factors that may apply: the employer’s level of control over the worker’s activities, whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the worker’s degree of financial risk, the worker’s degree of responsibility for investment and management, and the worker’s opportunity for profit.

    It is important to keep in mind that what counts in determining whether someone is an employee or independent contractor is the parties’ actual conduct and relationship, not the contractual descriptions.

    Disclaimer: Content on this website is provided for informational purposes only and does not constitute a legal advice.

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