Not quite, if it were this simple all employers could get away with evading responsibility by not paying wages or other benefits and arranging payment terms so that the tail wags the dog. It’s actually the other way around, the onus is on the business to demonstrate their labourers are truly independent contractors.
“Ontario's government, through the 2017 passage of Bill 148, significantly altered the classification of workers, establishing a "reverse onus" that placed the burden on employers to prove a worker is an independent contractor, not an employee. This meant that after its 2017 implementation, if an employee's status was challenged, the employer had to provide evidence that the individual was indeed an independent contractor, rather than the worker proving they were an employee.”
Employee or Independent Contractor? The Effect of Bill 148 | Employment & Human Rights Law in Canada
Employees are generally determined by a four fold test:
- Degree of control dictating how, when, and where the work is done. An independent contractor has significant autonomy, they don’t have shifts for example. A contractor can sub in others to complete their work and cannot be hired nor fired.
- Ownership of Tools and Equipment.
- Chance of Profit and Risk of Loss. An employee is more economically dependent to the business, whereas an independent contractor receives revenues from a variety of sources.
- Integration: The worker's role is integral to the employer's business and often involves being part of the business's core operations. Whereas a contractor merely provides a service to the business.
No single factor determines this but by weighing all the factors to get a picture of whether the worker is in overall subordinate position to the employer.
It’s very easy to see who is an independent contractor versus an employee in the construction industry. If I’m a plumber running my own business, I have dozens, maybe even hundreds of clients which I source and choose myself. I bring my own tools to the job and I am paid for a service. I can decide what my schedule is to complete my contracts and I can sub in other individuals to complete the work. Most notably, I cannot be hired nor fired, I am not trained by those who contract me, and I decide how to carry out the work. Conversely, if I am a plumber working for an employer, I go to a job site designated by my employer, work mainly under their umbrella, for clients they source and am supplied the critical tools. I may be trained, can be hired and fired, have shifts or hours etc. I am in a subordinate and dependency relationship with my employer.
There are numerous cases where the government has found misclassification, for example, drivers, gig and construction workers, and in the arts. Workers rights form an important pillar of human rights in this country. And so you can’t just get cute with how you design your business to try to evade the responsibilities of an employer. Imagine the total erosion of rights that would take place were all sectors allowed to avoid being employers by simply calling the individuals they hire independent contractors.