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Meetup #51: The Independent Contractor ShuffleJanuary 14, 2014

• 7:15 pm Welcome • 7:20 pm Announcements• 7:30 pm Keynote:

The Independent Contractor Shuffle

• 8:15 pm Mark Your Calendars• 8:20 pm Get To Know Your

Members• 8:30 pm Open Floor• 8:35 pm Networking

Agenda

Show of Hands

• 960+ members• 51 meetups• 8 peer2peer groups• Hundreds of LinkedIn

discussions

2013 Highlights!

• 51 Meetups and counting• 2 Pitch Nights• New P2P - Technology Product

Commercialization• 4 Workshops• Sponsorship - SB Partners• Silicon Halton Days @ Burlington HiVE

2013 Highlights! Burlington Post, March 21, 2013: http://bit.ly/XBaR5E

Focused on:• Silicon Halton• Enable Education• yapAgame• 3Peaks

Thx to @HughBlack

2013 Highlights! Oakville News, Building Hi-Tech Halton. May 2013: http://oakvillenews.org/silicon-halton

2013 Highlights!

Sponsorship:

Agenda

Keynote

Meetup 51: The Independent Contractor Shuffle

Presenters:• Richard Weber, CA• Grant Buchan-Terrell, JD

Playing the IC Shuffle with CRA and ESA

IC or Not IC?

• Becuz:

– It affects almost ALL SH Members – who here is an employee,an employer or an IC? Everyone?

– From our experiences, it seems there are lots of misconceptions (Dennis Rodman)

– Tax/financial and legal aspects are interwoven

Why are we doing this topic?

• A. Richard will describe tax/financial aspects

• B. I’ll talk about legal factors: contract, HR

• D. Richard and I will have chat about issues

• E. We’ll suggest some practical tips

• F. Q & A

This is the Plan:

Employee vs. Independent Contractor – Tax considerations January 14, 2014

Richard Weber, CPA, CA Weber, CA, Tax and Accounting

info@webertaxaccounting.com www.webertaxaccounting.com

Why does it matter whether employee or independent contractor (“IC”)?

1. Generally more tax deductions available to ICs than employees

2. ICs may be required to register for and charge HST

3. Employer relieved of payroll source deductions, remittances and reporting for ICs

4. ICs save employers their share of CPP and EI

5. Potential increased responsibility for ICs to remit tax instalments than employees

6. “Personal Services Business” (PSB) considerations for incorporated ICs

Why does it matter whether employee or independent contractor (“IC”)?(continued)

Therefore … the CRA cares about this!

It is common for the parties to characterize as an IC an individual who really is an employee

Distinguishing an Employee and an IC

1. Having an Independent Contractor Agreement does not necessarily make one an IC; the actual work relationship is determinative

2. Consider intention of the parties – contract of service (employee) vs. contract for service (IC)

3. Classic common law factors:

- degree of control over individual- does individual own tools, supplies or equipment?- does individual have a chance for profit or risk of loss?

Harmful factors to classification as IC

1.Occupies a permanent position

2.Does not provide services for any other entity

3.Works at times and a location directed by the organization

4.Attends “in-house” meetings with employees of the organization

5.Receives a fixed and regular amount of remuneration

6.Receives group insurance benefits

7.Is not permitted to work for any competitive entities

Tax consequences if an IC is really an employee

1.Employer liable to pay tax that should have been withheld at source plus a . 10% or 20% penalty thereon, plus arrears interest

2.If a criminal offence, possible fines and imprisonment

3.Liability of directors

4.May impact employer’s ability to claim input tax credit for GST / HST . charged by former IC

5.Employer liable to pay the individual’s and employer’s share of CPP and EI . plus penalties and interest

Legal Stuffby gbt

of gbtlawTM

@OntBizAttorney

Drugs, disability insurance, dental plan, health club &

car benefits

Work at home in jammies, while watching The View,

if you want to

Eligible for EI,WSIB, ESA

Deduct car, computers, rent to spouse, wages to kids, biz

dev exp

No liability for snafus, no credit risk, get severance, no

upside though

Employee

Employee

Employee

Independent Contractor

Independent Contractor

Let’s Play Match Game!

How do you fire an IC?

Carefully!Principal can’t just cancel the deal.

Look to termination clause.

Can you be an IC without a written agreement?

Sure, and then both parties can guess what the terms are. Fun!

Do employees have any duties to employer?

Yes, different by degree; employment agreement can

beef up beyond common law.

What if boss says you must sign IC contract?

Call your lawyer! Hedge your bets. Never quit.

What are biggest IC Agreement issues?

1. Non-compete2. Exclusivity

3. Warranties/Indemnities4. Your Services vs. Resold Software

5. Governing Law

Top Tips for ICs:

1. Talk to your CA first2. Write down key biz terms

3. Use a good precedent4. Then get legal advice

5. Don’t sign one thing & do another!6. If things change, revisit

Mark Your Calendars

Silicon Halton Day @ Burlington HiVE• Jan. 24, 2014 Open 8 am – 6pm• Free for Silicon Halton members• Lunch & Learn• Not an 8-hr business social event• Do your work• Collide, in a good way

Learn Startup Lunch & Learn• Jan. 24, 2014, 12 noon• Bring your lunch• Part of Silicon Halton Day @

Burlington HiVE• Free

Silicon Halton “Special” Day @ Burlington HiVE• March 26, 2014• 9 x 45-min workshops from 1 pm – 4 pm

1pm - 2pm Workshop 1 Workshop 2 Workshop 3

2pm - 3pm Workshop 4 Workshop 5 Workshop 6

3pm - 4pm Workshop 7 Workshop 8 Workshop 9

SoloPreneur Peer2Peer #31• Leveraging members’ content • Jan. 16, 2014, @ 8:30 am• Hampton Restaurant at the

Quality Suites Hotel, Oakville

Meetup 52: Secrets to Podcasting

Success, Donna Papacosta

• Feb. 11, 2014• New Milton Education Village

Innovation Centre

#G2KYM(Get to Know Your Member)

Aaron Lalvani

NEED NEW SLIDE

@LalvaniGroup

Dmytro Marushkevych

Search for better marketing results…

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Carlos Paz-Soldan

www.GreenRack.com

Carlos Paz-Soldancarlos@tenet.com

carlos@GreenRack.com

GreenRack is a cloud-based publishing service that lets you take advantage of the latest mobile technologies to reach and understand your audience, implement your mobility strategy, and fulfill your sustainability goals.

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