Knowing your rights as an Independent Contractor in Canada is imperative in making sure you are receiving what you are entitled to by law. According to Ontario’s Worker’s Action Center (2010) an independent contractor or self-employed individual is one that, among others, controls how the work gets done, can freely negotiate pay, is responsible for the tools he or she uses, takes the profit or loss from the work and is able to choose to work for different companies simultaneously. Whatever kind of independent contractor or worker your are, whether your an entrepreneur freelancer or a moonlighter that is working on your own or a company that hires independent workers it is a good idea to familiarize yourself with your rights and obligations.
KNOW YOUR RIGHTS:
Moreover, legally, there is a series of variations between the rights of a full-time or part-time employee and that of an independent worker. Check them out below:
Human Rights Legislation
Although it varies slightly from jurisprudence to jurisprudence, any worker, independent or not, is entitled to a workplace free of discrimination and harassment based on race, colour, ethnicity, country of origin, age, sex, disability, marital and family status. Any worker can file a complaint to the Human Rights Tribunal.
Canadian Pension Plan (CPP)
When you are employed, you and your employer pay into the Canadian Pension Plan (provides a fund for when you retire or are unable to work for a valid reason like disability) . If you are an independent worker then you alone have to make payments to CPP.
Health and Safety in the workplace
Employees and independent contractors both have rights and responsibilities for healthy and safe working conditions based on each provinces’ Health and Safety Act.
Employment Standards Act
A “regular employee” has the right to earn at least minimum wage and receive overtime pay, vacation pay, public holidays, and parental leave. Among other protections, they may receive termination and severance if you are fired from their jobs. On the other hand, the law is not so kind for independent contractors; independent workers do not have these rights to basic employment standards. In fact, while employees can file complaints free to the Ministry of Labour if any of these standards is violated in any way, independent workers may have to pay the legal costs involved in the same complaint process.
Employment Insurance (EI)
If you are an employee, you and your employer make payments to EI. EI is there in case you lose your job, are unemployed or require special benefits. Nevertheless, if you are an independent worker, you are not entitled to EI when you are unemployed in Canada.
Employees of any kind have to pay income taxes. For dependent workers, the employer has to deduct income taxes from each of a worker’s paychecks, giving the government their share of your earnings. Yet, as an independent you declare your income and pay taxes to the government directly. A perk of being an independent worker in this case is being able to deduct more expenses that are related to the job such as, gas and phone bills.
When you are self employed you are the one responsible for taking care of the bookkeeping, taxes and all the record keeping. It is your responsibility to understand what your legal and tax obligations are. You should also keep in mind that since you are not “hired” for a job but rather a specific contract and will not receive benefits of vacation pay, etc and you therefore work this into your pricing.
Many times individuals may assume that their status as an independent worker excludes them from an employer’s protection and or of provincial labour laws in Canada yet, as listed above, this is definitely a generalization that cannot be made. Although different from regular employees, the rights enjoyed by independent workers are very much existent in Canada. So know your rights; remember, knowledge is power and make sure to always consult with a legal professional. The rights and obligations of Independent contractors will continue to change as the landscape of the workforce evolves and more and more companies engage in this type of contingent relationship.
Worker’s Action Centre. (2010). Are you an independent contractor or employee. Retrieved from http://www.workersactioncentre.org/wp-content/uploads/2011/12/ fs_independentcontractororemployee_eng.pdf
I am an I.T. contractor in Quebec. What rights do I have if I feel I have been unfairly treated by a client and been forced to terminate the contract because of fraudulent accusations against me? Thank you