Independent Contractor or Employee?

If it walks like a duck, quacks like a duck and looks like a duck, chances are it’s a duck. While not the law, these words do set out a fundamental legal concept. An employer cannot simply call an employee an independent contractor and possibly hope to be able to avoid their legal obligations towards that individual. Transformation Companies may try to persuade an obvious “employee” to sign an agreement that describes that person as a contractor. The apparent motivation to the individual is that payments of what would normally be salary less tax and other source deductions are made as gross income payments. The “employee” may be encouraged to incorporate a separate company to receive the “salary” sum. He may believe that he will be allowed tax deductions that employees are not allowed to declare. The company may mistakenly believe that it can escape statutory obligations owed such as vacation pay, overtime and minimum termination…

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