In Manitoba, true independent contractors are not employees and therefore not covered by the Manitoba Employment Standards Code.
If the Employment Standards Branch determines an employee has been misclassified as an independent contractor, the company can be forced to provide proper wages and all other entitlements – including vacations, general holidays and termination, etc. – plus penalties.
Sometimes, failure to understand the rules can result in cost increases that are greater than the cost of hiring contract labour in the first place.
Contract relationships can be viewed differently by the Canada Revenue Agency (CRA)and WCB of Manitoba. While the province may consider their decisions, Employment Standards’ rules are not influenced by them.
The Employee vs. Independent Contractor Chart describes factors used by Employment Standards, the Labour Board and the courts, including:
- Supervision/ Control of duties and schedules
- Who Performs the Work
- Ownership of Tools
- Chance of Profit/Risk of Loss
- Method of Payment
- Length of Employment Relationship
Simply saying someone is your independent contractor, or having a written agreement in place, may not necessarily establish that specific working relationship from the perspective of the Employment Standards Branch. A written agreement is one factor considered, along with those listed above. Each situation is unique and would be based on the specific circumstances.
Read the Employment Standards Independent Contractor fact sheet.
Still have questions?
Contact Manitoba Employment Standards at 204-945-3352 or 1-800-821-4307.