01 Aug What is a dependant contractor?
A dependant contractor is different from both an employee and an independent contractor. A dependent contractor is a worker or entity that is economically dependent on who they work for. This type of contractor is self-employed like an independent contractor, however they have only one client instead of many. Professionals who can be considered dependent contractors are self-employed real estate agents and taxi drivers.
How is an employer, independent contractor, and dependent contractor differentiated?
To discern between an employee and a contractor is to identify whether they have control over their work, provide their own work supplies, hire assistants or subcontractors, are responsible for the managerial role of the business, can control their expenditures, and lastly, are at risk if the worker fails to adhere to their contract.
Additionally, to establish whether the contractor is dependent or independent is reliant on whether the worker is restricted to their principal client, the length of services provided to their client, and if there is mutual dependence between the worker and client.
How does the court assess whether a worker is a dependent contractor?
The test for determining whether a worker is a dependent contractor is first establishing whether they are an employee or dependant contractor, then evaluating the degree of economic dependency and exclusivity to their principal client.
To establish the degree of exclusivity between the dependent contractor and their client, the court will assess the time and energy they provide and the pay they collect from their principal. This worker must (solely or very close to solely) work for their principal to be characterized as a dependent contractor. This client must provide a significant amount more than fifty percent of their income to be categorized as near complete to exclusivity, which is necessary to be a dependent contractor.
Further, dependent contractors are not covered by the Employment Standards Act, 2000. However, they do have a right to termination notice or pay in lieu of notice. Since their income is mostly supplied by an individual client, once that contract ends, they can experience abrupt financial losses – which is why it is reasonable to supply this contractor notice before termination.
If you are a dependent contractor mistaken for an independent contractor by your employer and did not receive notice or pay in lieu of notice upon termination, please contact KCY at LAW by filling in an online consultation request or contact us by phone at 905-639-0999 to book your consultation today.