Independent Contractor Assessment Form

While there are often many benefits to companies engaging contractors instead of hiring employees, businesses must also be careful not to characterize an employment relationship as something it is not. The following are common indicators of a “true” contractor relationship, and in ideal circumstances, most or all of these items will be present. Not all of these items are necessarily required in order to establish a contractor relationship, nor does this list represent an exhaustive summary of all possible factors suggestive of a contractor arrangement.

This list is designed to be used by organizations to assess the health of their contractor relationships. If an organization is checking more often than not in the ‘no’ column, it may be advisable to speak with an employment lawyer and consider ways to strengthen their contractor’s status.

YES NO
Control                                                                  
Company assigns jobs, but Contractor determines how the work will actually be performed.    
Contractor works independently and is not subordinate to Company.    
Company sets deadlines, but Contractor is free to determine hours of work.    
Company may stop providing further jobs to Contractor.    
Contractor may decline further jobs from the Company.    
Contractor may offer and provide services to other companies.    
Company may receive offers and obtain services from other contractors.    
Contractor does not have authority to bind or enter into contracts on behalf of the Company.    
Tools
Contractor provides all required tools, equipment and materials.    
Contractor is responsible for the cost of all purchases, repairs, maintenance and insurance associated with tools and equipment use.    
Contractor has its own office or work place which it maintains at its own expense.    
Contractor performs work out of its own work place, not just at the Company’s office.    
Contractor is not significantly integrated into the Company’s work environment.    
Contractor has branding (including logo, business cards and uniforms) distinct from the Company’s.    
Financial Risk and Opportunity for Profit
Contractor sets price for work to be performed, or price is negotiated.    
Contractor provides a quote for each individual project.    
Contractor’s work-related expenses (including wages) are built into its fees.    
Contractor guarantees quality of work and is responsible for costs of re-doing unsatisfactory work.    
Contractor is financially liable for not fulfilling obligations of the contract.    
Company pays Contractor only upon receiving an invoice for work performed.    
Company does not pay for time that Contractor is not working (such as illness, vacation, bereavement).    
Contractor charges interest on late payments from Company.    
Contractor does not provide services exclusively to the Company.    
Contractor benefits from providing efficient services and is financially responsible for inefficient services.    
Employees and Subcontracting
Contractor can hire its own employees or subcontractors to perform the work assigned by the Company.    
Company has no authority over who the Contractor may hire as an employee.    
Contractor supervises the work of itself and its own employees.    
Contractor does not supervise Company employees or their work.    
Contractor pays all wages and benefits associated with its own employees. Company does not provide group insurance coverage or other benefits for Contractor or its employees.    
Contractor pays all invoices and costs associated with its subcontractors.    
Contractor pays all training costs for itself and its employees and is accountable for ensuring that all necessary training and certifications are obtained.    
Corporate and Tax Status
Contractor is incorporated as a company and all contract services are provided through this company.    
Neither the Contractor nor the Company have capital investments in each other’s businesses.    
Contractor is registered with C.R.A. and has a business number.    
Contractor has a GST number and applies appropriate sales taxes (PST/GST/HST) on all invoices.    
Company does not provide T4 income tax forms to Contractor or its employees.    
Contractor makes its own remittances to C.R.A., E.I., C.P.P., Workers’ Compensation and any other statutory remittances.    
Other Considerations
Contractor has its own Workers’ Compensation coverage and liability insurance.    
Relationship between the Contractor and the Company is confirmed in an executed Independent Contractor Agreement.    

 

This assessment form is provided for informational and educational purposes only, and does not replace competent legal advice.

David M. Brown
Kent Employment Law
236-420-1946
david@kentemploymentlaw.com
LinkedIn: https://ca.linkedin.com/in/davidmjbrown
Twitter: @davidmjbrown

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s