The Gig Economy. The Fourth Industrial Revolution. Artificial Intelligence. Machine Learning. There’s no doubt that the world of work is changing. And big change inspires important questions. At Ian Martin, we believe every question is valid in the search for meaningful work. This blog post series answers the questions we’re hearing from candidates as they chart their courses in the new world of work.
If I would rather not be a contract employee; do I have the option of offering my skills through my own company on a freelance basis through Ian Martin?
The Directional Assistance:
In most cases, candidates who go through the interview process and are ultimately chosen for an Ian Martin contract position are given the choice of taking on the assignment as an Ian Martin contract employee or as an independent contractor.
Thanks in part to the rise of the “gig” economy, a growing number of technical freelancers are choosing to offer their services to Ian Martin as independent contractors.
Making the choice between having a business–to–business relationship or an employee–to–business relationship with Ian Martin requires some careful consideration. Here are some of the things you should consider if you are thinking about offering your services as an independent contractor:
- You will be operating as your own registered business if you choose to provide your services as an independent contractor to Ian Martin.
- Rather than receiving a standard paycheque from Ian Martin as our contract employees do,you will invoice Ian Martin and payments to your company will be processed through our Accounts Payable department.
- It will be your responsibility to register for, collect, and remit taxes in accordance with provincial/state and federal government guidelines.
- If your work takes place in multiple provinces and/or states, it will be your responsibility to be aware of and ensure compliance with different regulations.
- Standard employment practices do not apply in a business-to-business relationship, which means:
- You will not receive a Record of Employment at the end of the contract period.
- You will not be entitled to maternity/paternity leave, or other benefit coverage through Employment Insurance.
- You will not be entitled to vacation pay or overtime or receive payment for statutory holidays.
Another important consideration for technical professionals who chose to offer their services as an independent contractor is the prevention of employment misclassification. You will need to have documented proof that the relationship you have with both Ian Martin and the end client is a business-to-business arrangement and not a business-to-employee relationship. Should your working relationship ever come into question by government authorities, not being able to prove that you are operating as a true, independent business can have serious tax and financial implications. Repercussions can include the cancellation of tax credits you were entitled to, business expenses being deemed as null and void, and being required to pay unpaid taxes, penalties, interest, and CPP and EI premiums.
Should questions arise, having easy access to the items in the list below will help you prove your independent contractor status:
Business Process and Documentation
- Certificate of incorporation
- Business Information Number
- Canada Revenue Agency Business Number (If you have registered your business for GST/HST, you’ll have been assigned this 9-digit number by the CRA)
- Federal Tax ID Number
- Proof of your GST/HST account
- Copies of any licences or certificates required for carrying out your business
- Workplace Safety and Insurance Board (Ontario) Clearance Certificate (if you have registered)
- Proof of coverage and amount of business insurance
- Proof of your own benefits coverage (e.g. disability, health and dental, life, critical injury orsimilar benefits)
- If you have employees, proof of any benefits coverage purchased for them
- Proof of how you market your business to the public (e.g. business cards, website, social media accounts, paid advertising, sponsorships, industry group memberships, trade fair participation, etc.)
- Sample business invoices
- Evidence of corporate banking and bookkeeping
- Written contracts that clearly identify you/your business as an independent contractor and ideally:
- Are for a fixed term or based on completing a specific project vs being open-ended
- Outline the services to be performed or the project or product to be delivered
- Have an indemnification provision that requires you as the contractor to compensate the client for any losses related to any negligence or other factors
- Permits you as the contractor to provide services to other organizations
Proof of Control Over Services
To help prove your status as an independent contractor, authorities will want to see evidence that you exercise a significant degree of control over the work you perform for your clients. Asyou complete projects for clients, gather examples that help illustrate:
- Discretion you’ve had in determining how your services are provided and the order in which they were performed
- Latitude you’ve had in setting your own hours and schedule
- Instances when you’ve contracted other people to provide services to your client
Tools and Equipment
- List of all equipment you supply to perform your services (including computer hardware and software, cellphone, specialty equipment)
- Details around any fee-for-service arrangements for tools you use to perform your work
- Details on office space you own or lease
Choosing between working as an Ian Martin contract employee or offering your services as an independent freelancer is an important and very personal decision. It’s wise to discuss your options with an accountant if you’re unsure. Ian Martin’s Contractor Success Team can offer suggestions for a reputable accountant in your area if you’re in need of a recommendation.Learn more about other ways Ian Martin’s Contractor Success Team can support you here.