Canada Contractors
If you need to extend your current operating capabilities for a determined period of time, hiring Canada-based contractors can support your company's goals.
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If you need to extend your current operating capabilities for a determined period of time, hiring Canada-based contractors can support your company’s goals.
Hiring independent contractors in Canada
As a diverse workforce offering industry specializations, Canada-based contractors can help your company finish certain projects. It’s essential to understand the legal status of these hires before you bring them onto your organization.
Keep in mind that the province of Quebec has slightly different labor laws from the rest of the country, even though the general divisions between employees and contractors are the same. For case-specific details about hiring Quebec-based professionals, consult the Act Respecting Labor Standards.
Differences between an employee and an independent contractor
Employees are legally subordinate to your company’s supervision and rules. In contrast, independent contractors are their own business entities as defined by the Canada Revenue Agency. Contractors operate under a contract for services as a business relationship, and they are not entitled to the benefits of an employee.
Penalties for contractor or employee misclassification
Identifying employees versus contractors is critical in terms of protecting your company from the risk of fees and penalties. If you incorrectly classify employees as contractors, your company could be subject to costly lawsuits. You may also need to pay for social security contributions and benefits remunerations retroactively.
How to hire independent contractors for your company
As you begin hiring contractors to work for your company, keep these principles in mind.
1. Hire strategically
Target specific skill sets and professional experiences. Contractors typically have CVs of relevant projects they’ve completed in the past. Throughout screening, interviewing, and contract negotiations, remember that you are building a business-to-business relationship.
2. Create a contract
The best way to ensure all parties agree on service terms and conditions is to create a contract. Negotiate with workers as needed and decide on guidelines to help you navigate your professional relationship more smoothly.
You’ll want to cover these terms in your contract:
- Pay rates and agreements
- Nondisclosure agreements (NDAs), if applicable
- Length of the contract
- Services the contractor will provide
- Termination and extension conditions
3. Provide the necessary resources
Contractors have industry expertise, but they will most likely need some training regarding company-specific procedures. Appoint HR personnel to explain your operating systems, workflow, and any software or tools related to the project. It’s also wise to provide the contractor with a point of contact in case they have questions or need guidance later.
How to pay independent contractors in Canada
Unlike employees, contractors are not on your company’s payroll. You can compensate them via a bank, digital wallet, or payment transfer service that works internationally. Each option has its own complications and advantages, so you may need to determine the most secure and reliable choice on a case-by-case basis.
Since you are not legally your contractors’ employer, you are not obligated to provide benefits. Be sure to meet the terms outlined in your contracts.
Termination or extension terms for Canada independent contractors
Contracts typically end by expiry after the contractor has completed a project or service duration; however, it’s wise to make provisions for terminating or extending the contract based on performance or other unique situations.
Hire contractors in Canada with Globalization Partners
As an extension of Globalization Partners’ Global Employment Platform™, G-P Contractor allows companies to hire anyone, anywhere. Whether you’re hiring employees or contractors, we streamline the process with a single solution for your global workforce. Contact us to learn more.
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THIS INFORMATION IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Globalization Partners does not provide legal or tax advice and the information is not tailored to the specific situations of your company or your workforce. Globalization Partners makes no representations or warranties concerning the accuracy, completeness or timeliness of this information. Globalization Partners shall have no liability arising out of, or in connection with, the information, including any loss caused by use of, or reliance on, the information.