Toronto Employment and Labour Law Blog: Ten Critical Employment Issues Every Employer Must Face #3

Employees, Independent Contractors and … Dependent Contractors

Your client has an “I/T consultant” named Donald Dependent.   Five years ago, Donald came once a week for about 4 hours to your client’s premises.   He would manage the network, make sure the printers printed, conduct virus scans etc.  Donald provided similar services to ten other small businesses in the area.  He would invoice for his hours monthly.

Over the years, your client’s business has grown. And with this growth has come increased need for Donald Dependent.   Your client relies on Donald Dependent to manage its social media presence on LinkedIn, Facebook, Snap Chat, Instagram and Donald’s personal favourite: Twitter.   Additionally, Donald has developed and managed your client’s online website.  In addition to being a front page, this website facilitates for online ordering, inventory updates, delivery and payment of your client’s products.    

Donald now has his own office.   He has an iPhone, iPad and laptop issued to him by your client.  He also has a corporate credit card.

Donald devotes and invoices approximately 45 hours per week to your client; which he invoices now weekly.  His book of business has whittled down to just that of your client and one small 7-11, which he continues to invoice about 1 hour per month.     

Employers need to be cautious and review regularly the situations of any workers classified as “independent contractors” providing services regularly or frequently to it.  If such a worker relies on a particular employer for most of its work and revenues, the worker may be deemed a dependent contractor and therefore treated like an employee at common law, resulting in potentially significant legal and financial obligations.

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