SEPTEMBER 2015 BCBusiness 27 ILLUSTRATIONS: VICTORIA PARK
Declaration of Independence
D - I - Y M a n a g e m e n t
Uncertain times call for flexible work arrangements. Simon Kent, principal
of Simon Kent Employment Law, and Brent Lyon, partner at recruiting
company David Aplin Group, discuss the ins and outs of working with,
and as, an independent contractor by Felicity Stone
Actions speAk
louder thAn words
There can be serious tax ramifications
and penalties to getting it wrong, says
Kent. "If you have a situation where an
employer has 10 people who are call-
ing themselves independent contrac-
tors, and
CRA comes in and goes, 'No,
they're actually employees—and you
should have been withholding
CPP
and EI for two years,' you can be look-
ing at tens of thousands of dollars that
you need to pay back."
rewArd risk
Independent contractors shoulder more risk
than staff and deserve compensation, says
Lyon. "Contractors will be paid 25 per cent to
40 per cent more on an hourly basis." They
don't get benefits and have to pay their own
CPP, but they do get tax write-offs not available
to employees. "The entire system is rigged in
your favour if you have the personality to suit.
It just comes down to your appetite for risk and
your ability to be a bit of a self-promoter."
•
test the relAtionship
There are various tests to
determine how independent
independent contractors truly
are: for example, using their
own tools, setting their own
hours, the ability to subcon-
tract work and the opportunity
for profit or loss. "In my experi-
ence with this, it's just almost
like a scale," says Kent. "The
more autonomy the person
has, the more they're going to
be thought of as an indepen-
dent contractor."
JAck, be nimble
Independent contractors can give employ-
ers more flexibility, which is especially
appealing to project-based businesses,
says Lyon. "Having contract employees
gives you a little more control over head
count. You can more closely track your
staffing levels with client needs." One
executive told him, "The big mistake
I made was hiring too many full-time
employees. I should have made sure more
of them were contractors because that's
what ended up sinking the business."
wAtch whAt you
cAll your "workers"
"The biggest misconception that
I hear from anyone involved in
this is they'll say, 'But the worker
has agreed that they're an inde-
pendent contractor,'" says Kent.
"It's really not that relevant what
the parties thought it was. Just
because the employer and the
worker want to call the relation-
ship an independent contractor
relationship, it doesn't necessarily
mean that it is."
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