Transcript

Host: Welcome to the segment called Determining if a worker is an employee or is self-employed part of the Payroll Information for a New Small Business video.

I'm your host Janice Novak.

With me is Andrea Cohen who will share with us, in this segment, information that she has obtained from the CRA about determining if a worker is an employee or is self-employed.

Host: Welcome Andrea.

Subject matter expert: Thank you Janice.

Host: As discussed in the Am I an employer? segment, not all people who work are considered employees. What are some of the factors the CRA uses to determine if someone is an employee?

Subject matter expert: The facts of the relationship as a whole determine employment status.

Even though a contract may state the worker is self-employed, other factors may show that they are an employee.

Some factors to be considered are:

• the level of control the payer has over the worker;
• whether or not the worker provides the tools and equipment;
• whether the worker can subcontract the work or hire assistants;
• the degree of financial risk taken by the worker;
• the degree of responsibility for investment and management held by the worker;
• the worker's opportunity for profit; and
• any other relevant factors, such as written contracts.

Host: And what if, after reviewing that information, you're still not sure if a worker is an employee?

Subject matter expert: If there is any question as to whether a worker is an employee, either the payer or the worker can request a ruling from the CRA.

When the review of the facts has been completed, the CRA will issue a written decision, stating whether or not the worker is an employee.

Host: You mentioned that either the payer or the worker can request the ruling. Let's start with the employer—how would an employer request this ruling?

Subject matter expert: Well, if the employer is requesting the ruling, and they already have a payroll account, they can log in to My Business Account at www.cra.gc.ca/mybusinessaccount and make the request there.

Host: And if I don't have a BN or haven't registered for My Business Account yet?

Subject matter expert: Either party, that is, the employer or the worker, can request a ruling using Form CPT1, Request for a Ruling as to the Status of a Worker under the Canada Pension Plan and/or the Employment Insurance Act. More detailed instructions are available on this form.

Information is also available on the CRA's webpage at Canada Pension Plan (CPP) and Employment Insurance (EI) Rulings.

The link is included in the Related links for this segment.

Host: There's certainly a lot to consider. What's a good resource?

Subject matter expert: A good place to start is the dedicated payroll webpages.

For more information on determining if a worker is an employee or is self-employed, go to www.cra.gc.ca/payroll.

More information is also available in the following publication: RC4110, Employee or Self-employed?

Host: Thank you Andrea.

This concludes the segment on determining if a worker is an employee or is self-employed, part of the CRA's video Payroll Information for a New Small Business.

Thank you for watching.