5 Steps For Effective Independent Contractor Management In Canada

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Is Your Corporate Independent Contractor Program Protecting Your Company From Government Penalties?

Independent Contractor Misclassification Is A Canadian Corporate Issue Too!

The issue of contractor misclassification has seen a great deal of coverage in the US particularly in light of some of the large penalties that have been imposed on companies such as UPS, Microsoft and others, but most Canadian companies don't see themselves as being at risk. Perhaps it's our inherent Canadian sense of 'fair play' and 'doing the right thing' that leads to this perspective, more likely however is the lack of information we receive on those companies that have found themselves audited and having to pay dearly for the mistakes they've made. The reality is that just like our American counterparts, companies who are found to be non-compliant around the issue of contractor misclassification face fines and penalties that are steep...potentially VERY steep. Is there a course to remedy your potential exposure to workforce misclassification? Thankfully yes.

In this short post we offer you some insight on what your company should be doing in order to ensure you've implemented an independent contractor management program that will mitigate your risk of government fines and penalties. Whether your company has engaged 2, 5, 15 or 50 (more?) independent contractors is not at issue, the associated fines and penalties of contractor misclassification in Canada apply equally. Small and mid-size companies often think they're immune to these risks, thinking that the large or enterprise sized companies are really the ones with the most to lose. Or even worse, they're oblivious to what the realities of federal and provincial legislation are as related to independent contractors. Although the penalty amounts may be significantly more for large enterprise it's all relative. If you're found to be in violation...it will cost your company!  As the Canadian and provincial governments work to get their budgets under control, you can expect that increased attention will be paid to the issue of contractor misclassification because it may represent billions in revenue for cash strapped governments...be prepared.

5 Steps to Implement Effective Independent Contractor Management In Canada

1. Standardize the processing of all legal documents- Is all of your company’s documentation in order and meeting all the current requirements? Make certain that your process ensures your company is not at legal risk (very costly) for incomplete agreements, intellectual property exclusivity, non solicitation etc.
2. Strict on boarding and engagement processes for every contractor- How is your company’s new hire process? Is it ironclad? Or are there shortcomings?
3. Process automation- Depending on the number of independent contractors automating the process may be in order. Additionally, through an automated system with built in safeguards that control approvals, rates etc. you streamline your operations saving time and money.
4. Expense processing automation- How does your company manage this? Is it failsafe? How much valuable time is being taken up with this task? How much are errors costing?
5. Record and payroll management- There are many questions and concerns that your contractor workforce may have, make sure you're well prepared to answer them and manage this process. Additionally, you may have to deal with the matter of co-employment issues so investigate your options with due diligence.

Depending on the human resource management team within your company it may ultimately make sense to investigate the services that PEO providers can offer you in order to ensure nothing is overlooked, allowing you to save time and money and stay focused on your core business activity. Whatever route you choose, due diligence is a key to your effort, anything less can be very costly!

This FREE calculator tool will give you an instant result of what your companies potential financial exposure is.