13 August 1991 Ruling 912111 F - Professional Artists Employment Status

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Dear      19(1)

Re:  Professional Artists Employment Status

This is in reply to your  24(1)    31, 1991 concerning the employment status of professional artists who contract with art schools to teach workshops.  We understand that the District Office has determined that certain of these artists should be considered employees of the art school rather than independent contractors (i.e. self employed).

We attempted to contact you by telephone to obtain additional information concerning the specific situation involved but were unsuccessful.  Nevertheless, we believe the following general information may help to explain the law relating to the determination of whether an individual is an employee or self employed.

The determination of whether an artist is an employee or an independent contractor (i.e. proprietor of a business to provide proprietor's services) is made on the basis of the facts of each case.  Establishing and reviewing the facts of each individual's case is essential.  Consequently, the Department's audit staff has the responsibility of reviewing and making this determination based on their assessment of the specific facts.  In order to fulfil this function the Department has developed procedures which follow the four guidelines set out below.  These guidelines are based on Court decisions.

(a)        CONTROL

Is the individual limited or restricted under a master-servant relationship?  The degree of control of an employer over his employee is generally greater than that which is exercised in an independent contractor relationship.  For instance, in a master-servant relationship, the master can order or require not only what is to be done, but how and when it shall be done.  In contrast, an independent contractor is usually allowed to choose the manner in which the services are performed.

(b)     INTEGRATION

Is the work performed by an employee under an employment contract done as an integral part of the business?  Under a contract for services, the work, although done for the business, is not usually integrated into it, but is only an accessory to it.

(c)     ECONOMIC REALITY

What are the economic aspects of the relationship between the parties?  Factors to be considered in applying this guideline include the required investments to be made by the individual, the permanency of the relationship, and the skill required by the individual.

(d)        SPECIFIED RESULTS

Usually an independent contractor relationship involves the undertaking of a specific task after which the relationship ceases. Also it is usually not required that the undertaking be carried out by a particular individual.  In contrast, in an employer - employee relationship, the employee makes himself available to the employer to be used by the employer without reference to a specified result.

Not all of the foregoing tests will be relevant in all cases or have the same degree of importance.  No single test will be conclusive in all circumstances.

As you know, District Office officials often review individual cases and offer opinions on this matter.  When a written opinion is provided the individual may make application in writing to have the matter reviewed.  If necessary, the District Office can refer an issue to Head Office for a technical or legal opinion.  However, as stated before, determining employment status is more often a matter of establishing and reviewing the relevant facts and therefore a responsibility of the Source Deductions Section of the local District Taxation Office.

We trust these comments will explain the Department's position. Should you wish to discuss this matter further, the writer may be contacted at the telephone number listed above or a specific individual's case may be discussed with officials of the local District Taxation Office.

Yours truly,

for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch