FAQ for Employers 2017-12-05T17:55:12+00:00

FAQ for Employers

Why do I need to focus on this now? 2017-10-30T18:02:31+00:00

Legislative Changes
The most significant factors creating the sense of urgency are the legislative changes in Alberta and Ontario increasing the scrutiny being placed on employers. In Alberta as of September 1, 2017 dependent contractors can unionize. In Ontario employers will be in violation of the Employment Standards Act if they misclassify their employees as independent contractors. The burden of proof will now fall on the employer. The Ontario government’s clear emphasis on enforcement includes a plan to hire 175 more employment standards officers, by 2021. A requirement will be set to complete all employment standards cases within 90 days of filing and inspecting one in 10 Ontario workplaces.

Canada Revenue Agency
Over the past few years Canada Revenue Agency has introduced significant changes to the business criteria and classifications that directly impact independent contractors, exposing them to tremendous financial risk upon assessment. And most recently in 2016, CRA added 700 more tax auditors (making a total of 1000) to specifically target PSBs. When a contractor has a large tax bill to pay due to reclassification as a PSB they may look to the organization to pay their tax bill claiming they are dependent. The criteria used by the CRA for PSB classification is extremely close to the criteria used in Employment Court for deeming someone as dependent.

Workers’ Compensation
Worker’s Compensation eligibility decisions have also started to shift. First, we observed Worksafe BC refuse coverage to “Independent Contractors” stating they viewed them as a Personal Services Business (PSB). Shortly after Ontario, Alberta and Saskatchewan Workers’ Compensation Boards followed suit. This development matters to employers because if your contractors are declined WCB coverage for the reason of being viewed as a PSB it increases the visibility of you (the end employer) as a source of PSBs. This puts a target on your back as well as on the back of all of your other contractors.

Canadian Courts
Over the last decade, the Canadian courts have created a massive potential severance liability for companies that utilize independent contractors by deeming many of these resources to be “dependent contractors”. This means dependent contractors are entitled to many of the same benefits owed to full-time employees, including: severance upon the termination of a contract, legal fees associated with the severance process, and even legacy tax obligations incurred by your dependent contractors.

Can we still access the PCSI Solution if we hire contractors through a 3rd party recruitment agency? 2017-11-06T23:31:27+00:00

Yes, in most cases you can still access the PCSI Solution if you currently use a 3rd party recruitment agency. Please contact PCSI directly by calling 403-475-7274 or by contacting us to learn more.

Why am I not protected from the Dependent Contractor or Personal Services Business issues when I use an intermediary or 3rd party recruitment agency that does not leverage the PCSI Solution? 2017-11-03T21:36:20+00:00

The courts generally ignore the existence of a third party intermediary when examining the relationship between an Independent Contractor and the hiring company. Please contact PCSI directly by calling 403-475-7274 or by contacting us to learn more.

If I choose to use only PCSI Certified Contractors how is my organization protected from severance obligations associated with Independent Contractors? 2017-10-30T18:02:43+00:00

The unique PCSI partner model significantly reduces the risk of your contractors being deemed to be “dependent” on your organization and in turn distances your company from a host of severance, potential tax and legal obligations that would otherwise be associated with those contractors.

What is a Dependent Contractor? 2017-11-03T21:36:59+00:00

In an Ontario Court of Appeal decision called McKee v. Reid’s Heritage Homes Ltd., the Court of Appeal made reference to a category of worker known as a “dependent contractor”. The court was clear that this is not a third category along with employees and independent contractors. Workers are either employees or contractors. If a worker is a contractor, in certain circumstances the court will go on to decide if that contractor is dependent or independent. The relevance of this question basically relates to notice upon termination. Where a dependent contractor relationship exists, reasonable notice will have to be provided on termination to the extent that it is not specified in any written agreement. A contractor could be deemed as “dependent” in Employment Court based on the following criteria;

  • Control of Work
    • Exclusivity
    • Economic Vulnerability
  • Ownership of Tools
  • Risk of Loss/Profit
  • Integration
How long has PCSI been around? 2017-11-03T21:32:59+00:00

PCSI only came to market in mid 2016. We are proud to say that we are the first company with a true risk mitigation solution and still the only real solution in the marketplace. Our only competition has been addressing the depth of misperceptions people have about the issue and their actual risk exposure.

Who Pays the Fees? 2017-11-03T21:34:42+00:00

Most often it is the individual or group initiating PCSI’s involvement who pays the fees.

  • If the employer is seeking PCSI engagement – they negotiate and pay the fees on behalf of their contractor base
  • If the contractor seeks out PCSI on their own – they negotiate and pay the fee for themselves

Some of the benefits of paying the fees on behalf of your contractors:

    • Major employer differentiator will help your organization secure and retain preferred contractors
    • Positively impact your corporate and employer brand
    • Change management is less challenging if contractors are not faced with an additional ongoing cost/fee

Testimonials

Every Independent Contractor in Canada should pay attention to this solution provided by PCSI if they and their accountant are concerned with the PSB issue. Finally, there is a CRA compliant solution that gives a contractor a stable tax structure and more importantly compliance reassurance. As a former CRA Auditor specializing in this area, I can tell you PCSI has done its homework and diligence. Employers also mitigate risk when it comes to the new Dependent Contractor classification.

David Inhaber (FCPA, FCGA)
Former CRA Auditor

Past court cases have shown that traditional approaches are no longer a viable safeguard against the rapidly escalating financial exposure relating to employment issues.By working with PCSI we are able to offer the only true risk mitigation strategy for Canadian companies engaging with
independent contractors.

Kerrianne MacMullin
Airswift Sales Director – Canada

Aly Bandali, CEO of Professional Contractor Solutions, gave a very educational presentation to our Branch. Aly has excellent knowledge of the independent contractor issues. His presentation provided a clear understanding of what the considerations need to be for both contractors and the companies that hire them for their services.

Patrick Landry
CIM Calgary Branch

Aly’s [PCSI] was an excellent session. He is articulate and knowledgeable, and I recommend PCSI’s expertise for any organization whose employees or members are connected in any way to contracting and consulting services, either as a client or provider.

Eric Morin
Association of Science and Engineering Technology Professionals of Alberta (ASET)

The APEGA Calgary Branch organized the presentation “Strategies for Independent Contractors, Employers and Progressive Organizations” by Professional Contractor Solutions. Their presentation was on topic, sometimes surprising, and conducted professionally by the speakers. I recommend these experts to persons or organizations contemplating their engagement.

Tibor Kaldor
APEGA Calgary Branch

Thanks!

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