What Is the Principle Characteristic of a Dependent Contractor
To protect your relationship with independent contractors: (4) Type and degree of client control (examples: Who decides what hours of work to perform? Who is responsible for quality control? Does the employee work for another company? Who sets the wage rate?); To determine the degree of exclusivity between the dependent contractor and his client, the court evaluates the time and energy he provides, as well as the remuneration he receives from his principal. This employee must work (exclusively or very closely) to ensure that his principal is classified as a dependent contractor. This client must provide a significant amount of over fifty percent of their income to be classified as almost entirely exclusive, which must be a dependent entrepreneur. Simply marking the agreement as an agreement to which an independent contractor is a party is not decisive. Courts look for common dependency features such as: exclusivity of the parties; degree of client control; if Customer owns the tools required for the Services; whether the principal is the only party to risk losses and make a profit; whether the contractor`s services are “part of the business”; the degree of integration between the parties; and the permanence of the relationship. New industries, modern labour relations and the gig economy have blurred the line between workers and independent contractors, sometimes making it difficult to classify the relationship. In particular, peer-to-peer companies that connect service providers with consumers are changing our traditional understanding of employment. On a spectrum from independent contractor to employee, dependent contractors sit comfortably (or uncomfortably) in the middle. The classification of the dependent contractor is difficult to distinguish in practice, as it shares characteristics with independent contractors and employees. Dependent contractors, also known as intermediaries, are contract workers like independent contractors, but have an exclusive and/or economically dependent relationship with the person or company to whom they provide services. Due to the imbalance between exclusive and dependent relationships, the law has been expanded to protect dependent entrepreneurs. More recently, these protections have been comparable to workers` statutory rights.
In some cases, notice requirements have even exceeded legal requirements.2 Even though contracts have defined employees as independent contractors, where the relationship involves dependency or exclusivity, courts have classified individuals as dependent contractors – giving them the right to terminate.3 These notice periods were similar and even equivalent to the notice periods granted to employees. Were. This is particularly important for employers using independent contractor agreements, as the determination of dependent contractor status often does not warrant a right of notice. Let`s begin our analysis with an overview of the distinction between employees and independent contractors. In determining whether a particular employee is an employee or an independent contractor, the courts consider the employee`s entire relationship with the employer. In other words, if the relationship resembles an employment relationship where working conditions are controlled by the employer and the employee is economically dependent on the employer, the employee is likely to be classified as an employee. In the case of an independent contractor, there is no applicable law on termination rights. If there is a written service contract that contains termination provisions, they would be expected to apply.
If there is no written contract, the common law may provide for termination rights, but it depends on the circumstances and the extent of the termination that would be necessary to what extent the independent contractor actually resembles an employee. This is the term “dependent entrepreneur”. The recent case of Wyman v. Kadlec highlights the distinction between dependent and self-employed entrepreneurs and the markedly different rights of these workers in the event of dismissal, depending on how they are qualified. In addition, the determination of the contractor`s dependence or independence depends on whether the employee is limited to his or her primary client, the duration of the services provided to his or her client, and the existence of an interdependence between the employee and the client. A dependent contractor provides services under a service contract. British Columbia`s Employment Standards Act does not apply to dependent contractors, but the Employment Standards Tribunal often decides whether an agreement is really an employment relationship. The British Columbia Human Rights Code also governs relationships where the agent is largely exclusive to a principal.