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Contractors in CaCanada.

Population

39,858,480

Languages

1.

English

2.

French

Country Capital

Ottawa

Currency

Canadian dollar ($) (CAD)

If you need to extend your current operating capabilities for a determined period of time, Canada-based independent contractors can help support your company’s goals.

Working with independent contractors in Canada

As a diverse workforce offering industry specializations, Canada-based contractors can help your company finish certain projects. It’s essential to understand the legal status of independent contractors before you retain their services.

Keep in mind that the province of Quebec has slightly different employment laws from the rest of the country, even though the general divisions between employees and independent contractors are the same. For case-specific details about retaining the services of Quebec-based independent contractors, consult local counsel.

Differences between an employee and an independent contractor

Employees are legally subject to your company’s supervision, control, and rules. In contrast, independent contractors should remain independent from your company and not subject to employee-like discipline or direction (i.e. surveillance, discipline, or time management). Independent contractors operate under a contract for services as a business relationship, and they are not entitled to the benefits of an employee.

Penalties for contractor or employee misclassification

Identifying employees versus contractors is critical in terms of protecting your company from potential risks and liabilities. If you incorrectly classify employees as contractors, your company could be subject to costly lawsuits, notably, in cases of termination of the contract. You may also need to pay for social security contributions and provide retroactive compensation for benefits that would have been owed.

How to retain the services of independent contractors for your company

As you begin using the services of independent contractors to work for your company, keep the following principles in mind.

1. Select candidates strategically

Target specific skill sets and professional experiences. Independent contractors typically have CVs of relevant projects they’ve completed in the past. Throughout screening, interviewing, and contract negotiations, remember that you are building a business-to-business relationship.

2. Create a written contract

The best way to ensure all parties agree on service terms and conditions is to create a written contract. Negotiate with contractors as needed and decide on guidelines to help you navigate your professional relationship more smoothly.

You will ’ll want to cover these terms in your contract:

  1. Pay rates and timing of payments
  2. Nondisclosure agreements (NDAs), if applicable
  3. Length of the contract
  4. Services the contractor will provide
  5. Termination and extension conditions

3. Know how to work with independent contractors

An important step in engaging the services of independent contractors is understanding how to work with them. Independent contractors should not receive the level of control or supervision that employees do – they are generally free to perform the work according to their own schedule and methods.

Paying Canadian independent contractors

Unlike employees, contractors are not on your company’s payroll. You can compensate them via a bank, digital wallet, or payment transfer service that works internationally. Each option has its own complications and advantages, so you may need to determine the most secure and reliable choice on a case-by-case basis.

Since there is no employment relationship, you should not provide independent contractors benefits, and all payments should be made in gross as it will be the contractor’s responsibility to deal with taxes and deductions.

Terminating or extending Canadian independent contractor agreements

Contracts typically end by expiry after the contractor has completed a project or service duration. However, it is wise to make provisions for terminating or extending the contract based on overall satisfaction or other unique situations.

Turn to G-P when hiring independent contractors in Canada.

As a part of our #1 suite of global employment products, G-P Meridian Contractor™ allows companies to hire and pay global contractors faster, with self-service workflows and a wide set of flexible payment options. Whether you’re hiring employees or contractors, our platform streamlines the process with a single solution for your global workforce.

Contact us to learn more.

Disclaimer

THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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