Contractor vs employee

Whether a worker is an independent contractor (invoices, own tools, own insurance) or an employee (payroll, deductions).

How it works in practice

Events run on short-term workers, which is exactly why classification gets sloppy. A planner might hire a day-of assistant, book a mentalist, pay a friend to run the registration table and bring on a setup crew, all for one evening. Some of those people are independent businesses. Some are, in substance, working for you.

The CRA looks at the whole relationship, not the label on the invoice. Who controls how and when the work is done? Who supplies the tools? Can the worker hire a helper or send a substitute? Do they carry their own risk of profit or loss? A performer who sets their own act, brings their own props, invoices through a business, carries insurance and works for many clients looks like a contractor. An assistant who works only your events, on your schedule, following your instructions and using your kit, starts to look like an employee.

Getting it wrong can mean unpaid source deductions, penalties and interest, and gaps in workplace injury coverage through WSIB. For a planner whose margin on a $4,500 fee is thin, that is not a small risk.

Questions to ask

• Does this person invoice me from a registered business, with HST if they are registered?
• Do they carry their own liability insurance and can they produce a COI?
• Do they work for other planners and venues, or mostly for me?
• Do I set their hours and method, or just the outcome and the time slot?
• Who supplies the equipment?

How to handle it

1. Write a short contractor agreement for every independent worker that describes the deliverable, not their working method.
2. Collect business name, HST number if any, and insurance certificate before the event.
3. For regular assistants who look like staff, put them on payroll or use a staffing agency that employs them.
4. Ask your accountant whether you need WSIB registration for the people you employ; requirements depend on your industry classification.
5. Keep records for each worker: agreement, invoices and payment dates.

When in doubt, the CRA can issue a ruling on a worker’s status. That is slower than guessing, and much cheaper than guessing wrong.