Canada Revenue Agency (CRA)
When dealing with the CRA, you need to find out whether your worker is considered to be an employee or a self-employed contractor. This is essential because the employment status dictates which party is responsible for remitting EI, CPP and income tax.
To determine a worker's status, CRA examines the total working relationship and takes six main factors into consideration:
- Control over the worker
- Ownership of tools and equipment
- Ability of worker to subcontract or hire assistants
- Degree of financial risk taken by the worker
- Responsibility for investment and management held by the worker
- Worker's opportunity for profit or loss
WorkplaceNL (formerly WHSCC)
Keep in mind that, according to WorkplaceNL, an individual hired by you under contract may be considered to be your worker. This may also be the case for a non-incorporated company whose owner is the one performing the work for you. For matters regarding workers' compensation, WorkplaceNL has the exclusive authority to determine which individuals are independent operators and which individuals are workers.
If WorkplaceNL determines an individual to be your worker, you will be responsible for reporting and paying assessments on the labour portion of the contract.
On the other hand, if WorkplaceNL concludes that the individual is an independent operator, you will not be charged assessments on the labour portion of the contract. Independent operators do not receive mandatory coverage under the Workplace Health, Safety and Compensation Act, but may apply for optional personal coverage.
One word of caution: If individual contractors do not have optional personal coverage for the full period of your contract, you can be held responsible for costs incurred in the event of a work-related injury.
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