Dependent Contractors: An Intermediate Category between
Employees and Independent Contractors
Many employers are familiar with the concept of a
“contractor” or a “contract worker”, but
the legal term for a contractor is an “independent
contractor”. While there are many different tests used by the
Courts to differentiate between an independent contractor and an
employee, one of the commonly applied tests asks whether that
individual is truly in business for themselves, or whether they are
simply a part of the employer's business.
There are significant implications, including tax and financial
implications, for characterizing a relationship as that of an
independent contractor rather than an employee. One marker of an
independent contractor relationship is that the worker will
typically invoice for their services, and the employer will pay the
invoices without remitting any amounts to the CRA or taking any
deductions for CPP/EI. In the event the CRA or other
