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Were You Actually an Independent Contractor? Or Were You an Employee Who is Owed Severance? 

Employment Law

The line between independent contractors and employees is blurry. In this day and age, where independent contracting is on the rise, it is important for employers and “contractors” alike to understand the nuances.


Misclassification of employees as independent contractors may be an intentional or unintentional mistake made by the employer. Hiring contractors can allow for employers to avoid certain costs and responsibilities that would otherwise be owed to employees under the Employment Standards Act (“ESA”). So hiring employees under the guise of “contractor” can result in the tenets of the ESA being unmet.


Is this Classification Important?

Yes! This classification is extremely important, since, as mentioned, persons classified as employees enjoy the protections afforded under the ESA, such as severance, overtime pay, paid vacation and other items, while independent contractors get none.


However, there is a middle ground too – Dependent Contractors. These are people whose roles do not fall cleanly into either that of an employee or an independent contractor, and consequently get some benefits of both.
For example, this classification is important when determining if a “contractor” should be given notice of termination or severance. Since this line between employee and contractor is more muddled than ever, if you find your work as a contractor and you are terminated without severance it is your best bet to get the help of well-versed employment lawyer.


Even if you have signed a contract that states you are an “independent contractor”, if the employment relationship demonstrates otherwise, you may have a right to certain benefits under the ESA, including but not limited to severance.


What does an Employee Vs. Contractor Look Like?

A few examples of factors that would indicate that you were working for the company as an employer rather than an independent contractor are:


-Exclusivity: this is the single most important factor. If the majority of your income comes from a single source, it is highly likely that you are an employee or dependant contractor. In both cases you are entitled to severance and many other legal protections.


-Control: the employer set the hours, supervised you, and the working relationship was exclusive such that you weren’t able to work elsewhere.


-Tools: the employer provided the tools.


-Profits/losses: you were paid a set fee, and you did not get a profit for getting the job done quickly, nor did you take a loss if you took too long.


Again, even if your contract stated “independent contractor”, if the relationship proves to be an employer-employee situation or you would be classified as an independent contractor, you are entitled to severance.


Call Us Today!


If you are an independent contractor who has been terminated without notice, give us a call or send us an email to set up a time to speak with one of our dedicated employment lawyers. We can help you navigate this complex area of the law and ensure that you are provided with the compensation you are owed!

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