Employee vs. subcontractor
Also called: Worker classification, Independent contractor status
Whether someone who works for you counts in law as your employee or as an independent business you hired. The line is drawn by law rather than by what the paperwork calls the arrangement, and the test differs by country, province and state — so the same working relationship can be classified one way at home and the other way across the border. Getting it wrong is expensive in back taxes, premiums and penalties, and it is decided after the fact by an authority looking at how the work actually ran. This is a question for your accountant or a lawyer where you operate, not for a glossary.
This one depends on where you work
The rule behind employee vs. subcontractor is set by the province or state the work is in, and the versions do not agree with one another. We have described the shape of it and deliberately not named a deadline, a cap or a percentage — check the rule where you work, or ask someone who practises there.
Related terms
- SubcontractorAnother business you hire to do part of a job you are responsible for — the electrician on your renovation, the crane on your tree removal.
- Labour burdenThe true cost of an hour of somebody's time, which is their wage plus everything you pay because they are on your payroll.
- Workers' compensationNo-fault cover that pays a worker who is injured on the job, funded by premiums on your payroll.
More in contracts and the law
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