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Do you know the differences between hiring employees and contractors in your Canadian business?

What are the legal differences between hiring an employee versus hiring an independent contractor?

Are you planning to hire people to help you grow your business?  Congratulations!  This is an important step for every business.  It is important to understand the legal implications.

Liability Considerations

  • EmployeesThe business becomes “vicariously liable” for all of the actions of an employee.  The business owns the employee mistakes.  
  • Contractors - The Contractor remains liable for their own actions, including potential mistakes. They should get their own licenses and insurance to cover these.

Making Remittances to Canada Revenue Agency (CRA)

  • Employees - The business is responsible legally to make tax and other remittances on behalf of the Employee - Income Tax, EI, CPP.   These amounts become liabilities of the business and can become a liability of the owner. 
  • Contractors - The Contractor is...
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