1. Are you hiring a contractor or an employee?
Barry Travers
KPMG LLP
Wendy Abel
University of Alberta
Larry Guthrie
Simon Fraser University

2. Determining Worker Status
Employee or Individual Contractor
No legislative direction provided
All direction has been provided by Courts (Common law principles)
CRA continue to actively audit on this issue
Audits arise generally due to inconsistent reporting by the parties

3. Determining Worker Status
Initial Guidance provided by the Courts:
Wiebe Door Services Ltd. v. MIVR (1986) (F.C.A.)
Ontario Ltd. v. Sagoz Industries Canada Inc. (2001) (S.C.C.)
Factors to Consider:
Control of the worker (subordinate relationship)
Ownership of the tools
Chance of profit
Risk of loss

4. Determining Worker Status
More Recent Court Decisions:
Lawrence Wolf v. Canada (2002) (F.C.A.)
Royal Winnipeg Ballet v. MNR (2006) (F.C.A.)
TBT Personnel Services Inc. v. MNR (2011) (F.C.A.)
Development of Two Step Approach
Determining the Intent of the parties
Apply the factors from Wiebe Doors

5. Determining Worker Status
Documentation of the process of evaluation is key
Factors must be consistently applied by the parties
Invoice
GST/HST reporting
Tax filings
Treatment for Employment Insurance
Contracts

6. Contracts for Service managed through HR
Pre Background
Payments in payroll system
Required CCID’s & SIN’s
Issued T4A’s
Checklist was recommended
Primarily payment process NOT a contracting process
Contracts for Service managed through HR
Prior to 2010
Audit Conducted
Inconsistent departmental decision making
Lack of evidence to support decisions
Lack of understanding the importance of the status of a worker
Created added complexity to Payroll System

7. The University… The Contractor…
The University and the Contractor were not considering the overall relationship and only focused on payment
The University…
The Contractor…
Perceived added costs of employment (CPP, EI, benefits, pension)
Did not want to lose the “Contractor”
Not confined to salary scales or employment types
Did not want source deductions
Ability to claim expenses
Unwilling to provide SIN’s and have T4A reporting
Remuneration outside pay scales
Needed to improve process, develop procedures and educate campus

8. University of Alberta Approach
Developed Procedures & Forms
HR Determination of a Worker’s Status Procedure & Checklist
SMS Contracting for Services with Individuals Procedure & Services Requisition
Supply Management Services manages all Contracts for Services
Completed Services Requisition & Checklist required for CFS with Individuals
Checklist must support CFS
Current employees and exceptions require CRA ruling
Documentation managed centrally to support assessment
Consistency across the institution

10. WCB self assessed and remitted annually
Currently not automated outside of Payroll system
Contractors must provide invoices for payments
No longer issue T4A’s
Higher effort compared to registered businesses
Vendor maintenance, incomplete forms, high payment sensitivity
Reduced complexity of Payroll system
Compliance with CRA and Audit requirements!
University of Alberta Policy / Procedures

11. The challenges we all share
Law  Vague
CRA  Inconsistent
Universities  Large Scale
 Multiple Lines of Business
 Decentralized Authority
Departments  Avoid ‘Central’
 Set Own Rates
‘Contractor’  No Statutory Deductions and Claim Expenses
 Later, Claim Employee Status

12. Our approach Current employee ‘contractors’
Board Policy Implemented
Employees are paid only as employees
Add Pay Process Established
To authorize payments for non-standard work
Pre-authorization Required
From Human Resources/Academic Relations
Collective Agreement Compliance
Rate Determination

13. Contractor status assessment
Relationship Checklist Required

14. Procurement processes
Checklist always required; with review by Procurement if >$5,000
Independent Contractor Agreement (ICA) or Agreement For Services (AFS) or Bid Custom Contract based on value

15. Payment Services processes
Vendor Master File
Include Tax and WCB Registration Data
Data Analytics
Transaction Types
Define ICA as a transaction type
ALL
Training & Communication
Web Site Links