The highest courts in Canada: the provincial courts of appeal and the Supreme of Canada tell us exactly how they determine whether a worker is an employee or an independent contractor. We took what these courts said and turned it into an algorithm.
The most cited case on the test for determining whether a worker is an employee or independent contractor is the Supreme Court of Canada's decision in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc.,2001 SCC 59 (CanLII). There the Court said about determinizing independent contractor vs employee, "The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account. In making this determination, the level of control the employer has over the worker's activities will always be a factor. However, other factors to consider include whether the worker provides their equipment, whether the worker hires their own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker's opportunity for profit in the performance of their tasks."
Other cases have expanded on the now endless list of disjunctive factors used to determine whether a worker is an independent contractor or an employee in Canada. goHeather has determined that the following are the most commonly cited factors examined by the courts in determining when a workers is not an independent contractor:
Combining the above factors and scoring each factor by relative importance, we created an algorithm that calculates whether a worker is an employee or an independent contractor in Canada. While not a human lawyer, our calculator gives you an idea if someone is likely an employee or an independent contractor. This is because, like lawyers and the courts, we count each factor and then balance them together to find an answer on a balancing test (e.g. the "scales of justice").
“If you are on the fence about whether your new hire is an employee or a contractor, use this app.”