Determine whether a worker is an independent contractor or employee.
Making the right call
Determining whether a worker is an independent contractor or employee is a challenge for administrators and lawyers alike. The mutual understanding of a particular working relationship may not in fact be supported by law. And the consequences of error can be significant.
The information on this page is intended to assist in the process of distinguishing the independent contractor from the employee.
Risks of a wrong decision
The risks of an improper determination relate to third-party interests in the employment relationship; typically, government and administrative bodies.
The following outline some of the impacts of making an improper determination on worker status.
Guides and help in making the decision
Any adverse ruling from the Canada Revenue Agency that a worker being treated as a contractor is, in fact, an “employee” will be borne by the department.
If in doubt, consult with your UBC Human Resources advisor.
General distinctions: a comparison
The following is a list of general distinctions between the two categories. You'll see that independence and self-control factor largely in favour of the independent contractor.
- Employee follows instructions on how to work.
Contractor works without detailed directions on procedure.
- Employee is trained on how job should be done.
Contractor uses own experience, expertise to do job.
- Employee works within campus environment.
Contractor works alone – isn't part of campus “team effort”.
- Employee is hired to work as an individual, based on skills, talent, and potential.
Contractor is hired to provide service many times, regardless of who actually does work.
- Employee has indefinite employment status hired for a set time period only.
Contractor works under set hours or sets own hours.
- Employee works for one employer at a time
Contractor may work for several employers at a time
- Employee works mainly on-site and is employer-directed off-site.
Contractor can work either on-site or off-site, without employer direction.
- Employee works in employer-established order to allow for supervision.
Contractor works any way desired to provide required service or product.
- Employee reports on work efforts as part of supervision.
Contractor reports only as agreed upon.
Employee is compensated regularly, at specified time periods. Contractor is paid on per-job basis in a lump sum.
- Employee has work-related expenses paid by employer.
Contractor pays own expenses out of expected compensation.
- Employee has tools and supplies provided by employer.
Contractor provides own tools and supplies.
- Employee doesn't own or control work site.
Contractor may own or control work site.
- Employee generally does not work on profit/loss basis
Contractor generally works on profit/loss basis
- Employee gives employer exclusive effort.
Contractor works for many contractors at once.
- Employee can't offer efforts to general public.
Contractor markets services to anyone who wants them.
- Employee can be fired at employer’s discretion (subject to employment agreement).
Contractor can be fired only if work falls short of expectations.
- Employee can end employment at any time.
Contractor is responsible for completing job as agreed upon.