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Author Topic: False Self-Employment
Lindar
recent-rabble-rouser
Babbler # 982

posted 24 March 2006 07:07 PM      Profile for Lindar     Send New Private Message      Edit/Delete Post  Reply With Quote 
I'm interested in knowing if there are others out there who are experiencing or have thoughts on the issue of false self-employment.

I'm just learning about it myself--the hard way by being a victim! And I really have been finding it hard to get good information.

While this is not only a women's issue, I know that in 2004, the National Status of Women Committee identified false self-employment as a growing problem for women. The report that I read stated that the increase in self-employment among women was a mixed story. Women who were truly self-employed found it often fit their life styles and increased their earnings. A truly self-employed person has a great deal of control over their own work. They work from their own premises (home or their own workplace). They have a great deal of control over their hours of work and who they work with--who to accept as customers or clients.

False self-employment is a totally different kettle of fish. You apply for a job that sounds like a regular salaried job and then are told that in order to get this job, you'll have to represent it as self-employment because the employer is not willing to pay CPP or EI. In addition, your Income Tax deductions are not made or forwarded. However you are expected to be at their workplace for their work hours, are subject to workplace rules, evaluations, have to buy work wardrobe in some cases, etc.

Why would someone agree to this? Well some are probably desperate. And probably a lot of people get sucked in as I did. I was told that the situation was just really temporary and that if a government grant came in (expected in three months) then I'd be on a regular salaried basis. The grant came in but my contract didn't get adjusted. I kept getting put off. Twice I've had to chase my pay for periods of more than two months owing.

By the way, Rabble's fearless leader, Judy Rebick, recently donated her services as a reader to benefit the non-profit I work for. I am far from the first worker victimized by this workplace in this fashion. Here they were, celebrating feminism publicly yet employing a succession of women workers in a manner that robs them of contributions to CPP and the protection of EI if they are unable to immediately find another job at the end of their "contract".


From: timbuctu | Registered: Jul 2001  |  IP: Logged
'lance
rabble-rouser
Babbler # 1064

posted 24 March 2006 07:18 PM      Profile for 'lance     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
False self-employment is a totally different kettle of fish. You apply for a job that sounds like a regular salaried job and then are told that in order to get this job, you'll have to represent it as self-employment because the employer is not willing to pay CPP or EI. In addition, your Income Tax deductions are not made or forwarded. However you are expected to be at their workplace for their work hours, are subject to workplace rules, evaluations, have to buy work wardrobe in some cases, etc.

My wife was in this position for awhile a few years ago. When she was finally able to leave, she learned that the Canada Revenue Agency regards this sort of thing as a tax dodge on the part of the employer -- which of course it is -- and was "interested" in investigating this particular company.

So reporting a company that does this, or threatening to, might be one way to go. Of course, there's an obvious danger -- it could just get you fired, or rather your "contract" might not be renewed.

Another problem is enforcement. CRA is supposedly years behind in actually cracking down on non-complying employers (or individuals).


From: that enchanted place on the top of the Forest | Registered: Jul 2001  |  IP: Logged
Lindar
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posted 24 March 2006 07:30 PM      Profile for Lindar     Send New Private Message      Edit/Delete Post  Reply With Quote 
Actually there is a form that one can file with CRA to ask them to rule on the employment relationship. But you are right, a "self-employed" person--so far as I've been able to determine--has no protection from being fired when they make this complaint. And that's one place where I think protections should be made.

When an employee makes a complaint under the labour code, there are protections in place. May not always work 100% but at least it gives an employer pause before firing.


From: timbuctu | Registered: Jul 2001  |  IP: Logged
lagatta
rabble-rouser
Babbler # 2534

posted 24 March 2006 08:18 PM      Profile for lagatta     Send New Private Message      Edit/Delete Post  Reply With Quote 
I experienced that as an ESL/FSL instructor. Ironically, one of the main clients was the federal public service - after they had downsized and hence contracted out second-language-teaching positions.

It is VERY, VERY common among women workers, and other vulnerable groups.


From: Se non ora, quando? | Registered: Apr 2002  |  IP: Logged
kropotkin1951
rabble-rouser
Babbler # 2732

posted 24 March 2006 08:25 PM      Profile for kropotkin1951   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
It is even worse in jobs that have occupational risks becaue those kinds of employers also don't like paying WCB premiums.

WCB will pay compensation to the worker but only after they prove the facts of their employment. If your really hurting that is not something that anyone would want to deal with.

If is fraud and a breach of most employment standards acts in the country.


From: North of Manifest Destiny | Registered: Jun 2002  |  IP: Logged
radiorahim
rabble-rouser
Babbler # 2777

posted 24 March 2006 08:28 PM      Profile for radiorahim     Send New Private Message      Edit/Delete Post  Reply With Quote 
My memory is fairly foggy on this but I vaguely recall there being some employment standards cases on this issue.

IIRC if the individual in fact has only one "customer" who sets all the terms and conditions of the so-called "contract" then that individual is in fact an employee.

Of course I could have this confused with CRA rulings.

Aha...here's a leaflet from the Toronto Workers Action Centre which might shed a little bit of light on things:

link -it's a pdf file

[ 24 March 2006: Message edited by: radiorahim ]


From: a Micro$oft-free computer | Registered: Jun 2002  |  IP: Logged
maestro
rabble-rouser
Babbler # 7842

posted 24 March 2006 08:29 PM      Profile for maestro     Send New Private Message      Edit/Delete Post  Reply With Quote 
I'm not sure of the exact law in BC, but I think there is a ruling that if you get all your income from one establishment, you are considered to be an employee.

At the same time, I think this is a problem across the board, which should be addressed by both provincial and federal governments.


From: Vancouver | Registered: Jan 2005  |  IP: Logged
Lindar
recent-rabble-rouser
Babbler # 982

posted 24 March 2006 08:39 PM      Profile for Lindar     Send New Private Message      Edit/Delete Post  Reply With Quote 
The usual test for whether you are an employee as I understand it is this:

Are you required to be in the "employer's" workplace more than 50% of the time that you are engaged in work for them?

Self-employed people may well be required to meet with someone who is contracting them to do independent work so they are going to be there sometime but more than 50% crosses the line.

Are you primarily using the "employer's" tools?

A self-employed person will typically bring their own trade tools to the job or their own computer.

Are you free to accept work from other clients on your own schedule?

My understanding is that none of these tests are points of law, or hard and fast, but are the court-tested guidelines on which most decisions have been made, so it is more a situation of precedents rather than law.

Kropotkin, I am even more horrified to hear that this practice exists in workplaces with high risks. I have worked in not-for-profits and the arts. I've always known that there were some jobs that were "out there" that were masquerading as self-employment that really should be salaried positions with benefits but I believed that they were mostly entry-level, shortterm contracts.

Last year I was interviewed by two organizations offering LEADERSHIP roles under a false self-employment contract. The first was as General Manager of Mixed Company, a theatre company in Toronto that bills itself as offering socially-responsible theatre. They do forum theatre in the noble tradition of Friere in South America. Yet they want to stiff their manager for CPP and EI contributions!

The next employer who suggested I had to accept the arrangement or not be considered for the job was the (name of organization removed) in their Executive Director search.

[ 24 March 2006: Message edited by: Lindar ]

[ 24 March 2006: Message edited by: Michelle ]


From: timbuctu | Registered: Jul 2001  |  IP: Logged
kropotkin1951
rabble-rouser
Babbler # 2732

posted 24 March 2006 08:50 PM      Profile for kropotkin1951   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
From the BC Employment Standards website
quote:


Employee or Independent Contractor Factsheet
Who is considered an employee?

Section 1 of the Employment Standards Act (the Act) defines an employee as follows:

Employee includes:

a person, including a deceased person, receiving or entitled to wages for work performed for another,

a person an employer allows, directly or indirectly, to perform work normally performed by an employee,

a person being trained by an employer for the employer’s business,

a person on leave from an employer, and

a person who has a right of recall.

The Act applies to those persons who are employees, but it does not apply to persons who are independent contractors. A person who is an independent contractor is considered to be self-employed.

Just because someone is called an independent contractor does not mean that he or she is one.

Persons working in an employment relationship are employees for the purposes of the Act, regardless of whether they are employed on a part-time, full-time, temporary, or permanent basis.

Determining who is an employee within the meaning of the Act is based on various tests that have been developed by the courts, the Employment Standards Branch and the Employment Standards Tribunal.

These tests include:

Control — Is the person under the direction and control of another regarding the time, place, and way in which the work is done? Is the person hired, given instruction, supervised, controlled or subject to discipline? Did the person answer a help wanted ad, was told what to do, how to do it, and when to do it? Did the person have to do the work him or herself, or could that person give the work to another to do? Does the person perform work normally or previously performed by an employee?

The greater the degree of control, the greater the likelihood of the person being found to be an employee.

Ownership of tools — Does the person use tools, space, supplies and equipment owned by someone else? If so, this would indicate an employment relationship. However, it is recognized that some employers require employees to provide their own tools or vehicles.

Chance of profit — Does the person have a chance of profit? If their income is always the difference between the cost of providing the service, and the price charged for the service, the worker may be someone other than an employee.

Risk of loss — Is the person at risk of losing money if the cost of doing a job is more than the price charged for it? If not, this would indicate an employment relationship.

Payment — Does the person receive payments of regular amounts at set intervals? Does the person receive payments regardless of customer satisfaction or customer payment? If so, this would indicate an employment relationship.

In general, the degree to which the party who pays for the service provided controls the supply of material and tools, and retains direction and control of the activities, increases the likelihood that the Director will find the relationship to be one of employer/employee.

Common Misunderstandings

A common misunderstanding is that one or a combination of the following factors establish an independent contractor relationship:

Agreement: A person who signs an independent contractor agreement is not necessarily an independent contractor. It is not what you say you are, but the reality of the work relationship that determines if you are an employee or not. In addition, any agreement to waive employment standards entitlements is prohibited by the Act.

Charges GST: GST filing numbers are provided upon request, and the requester may or may not be in a lawful position to charge GST.

No Deduction for Income Tax, EI or CPP: It may be that the employer is simply breaking two laws by not complying with the Income Tax Act and the Employment Standards Act.

Person sets own hours and is not actively supervised: The business may simply be informally run with an emphasis on getting results rather than operating under strict rules of attendance and control.

Works for several businesses: A person may be “moonlighting.”

Submits a bill for labour provided: It may be nothing more than a record of hours worked; in effect, a time card.

Drives his or her own vehicle/provides own tools: It may be a condition of employment that a person provides a vehicle so as to perform the work. In some sectors employees are expected to provide a set of tools for their use at work.

Payment by commission or other forms of pay incentive do not necessarily indicate a chance of profit or risk of loss; these are simply ways of tying pay to productivity.

Volunteers

Volunteers are persons who choose to provide services for non-profit organizations or charities for which they do not expect compensation. In a profit-based organization, any person allowed, directly or indirectly, to perform work normally done by employees is considered to be an employee, not a volunteer.

Examples:

A drywall business hired a worker as a painter. The company had the worker sign a written agreement in which the worker declared himself to be an independent contractor. The company bought the paint, and supplied the brushes, the ladders and other equipment. The company paid the worker an hourly rate. The company told the worker what to do, when to do it and decided if it was done satisfactorily. The worker did not have a business license.

It was decided that the worker was an employee because:
He performed work normally done by an employee.
The work was integrated into the company’s business.
The company had direction and control over the worker.
The worker had no chance of profit.
The written agreement had been signed as a way to collect unpaid earnings.

A sales person who sold products on behalf of one business, operated with limited supervision in the territory assigned to him. He was paid on a commission basis and did not have statutory deductions taken from his earnings. He used his own vehicle, and from time to time his own computer for business purposes.

The occasional use of personally owned computer programs and the failure to take statutory deductions from earnings indicate the person is an independent contractor. However, the degree of control, the lack of chance of profit, and the integration of the person into the business resulted in a finding that the person was an employee.

Ministry of Labour and Citizens' Services
Employment Standards Branch
Province of British Columbia

This factsheet has been prepared for general information purposes. It is not a legal document. Please refer to the Employment Standards Act and Regulation for purposes of interpretation and application of the law. July 2002

For more information, please contact the Employment Standards Branch.


[ 24 March 2006: Message edited by: kropotkin1951 ]


From: North of Manifest Destiny | Registered: Jun 2002  |  IP: Logged
Lindar
recent-rabble-rouser
Babbler # 982

posted 24 March 2006 08:55 PM      Profile for Lindar     Send New Private Message      Edit/Delete Post  Reply With Quote 
I am very clear that my job meets the standards to be considered an employee.

My boss is very clear that my job meets the standard of an employer-employee relationship. She has told me so.

There is no confusion on this topic.

She has chosen to ignore the definition and told me to like it or lump it. I once broached the issue with a member of the Board of Directors, when I was disappointed that the status continued. It went back to her immediately. I was told, "Talk to a Board Member again and I will be told immediately and you will be fired."


From: timbuctu | Registered: Jul 2001  |  IP: Logged
HeywoodFloyd
token right-wing mascot
Babbler # 4226

posted 24 March 2006 09:16 PM      Profile for HeywoodFloyd     Send New Private Message      Edit/Delete Post  Reply With Quote 
Lindar,so far you've managed to expose Rabble to Libel issues three times in this thread.

Could you please edit your posts to remove the names of the employers you are making the allegations against or, in good faith, change your handle to your real name.

I am sending this on to the moderators not to be a jerk but to protect the site.


From: Edmonton: This place sucks | Registered: Jun 2003  |  IP: Logged
Michelle
Moderator
Babbler # 560

posted 24 March 2006 09:29 PM      Profile for Michelle   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Heywood is right (although I only counted once - she didn't name her current employer, unless she's edited it since then). I edited the one name out of your post since we can understand your point fine without naming names.

By the way, I know it happens all the time, Lindar. I once worked as an admin assistant on those terms a while back. It ticked me off, and I pushed to get on payroll as soon as possible. They finally ended up putting all their admin assistants on payroll - I suspect they might have been either caught, or worried that such dodgy practices WOULD be caught.

[ 24 March 2006: Message edited by: Michelle ]


From: I've got a fever, and the only prescription is more cowbell. | Registered: May 2001  |  IP: Logged
HeywoodFloyd
token right-wing mascot
Babbler # 4226

posted 24 March 2006 09:40 PM      Profile for HeywoodFloyd     Send New Private Message      Edit/Delete Post  Reply With Quote 
Lindar, I do have a tip to help you with this.

File only the employee portion of the EI & CPP premiums. When the gov't comes a calling, and they will, tell them that you are an employee and not a contractor.

When the investigation starts, the employer will most likely will be found accountable for the premiums given the facts you've outlined.

You may lose your job but you will screw them over.


From: Edmonton: This place sucks | Registered: Jun 2003  |  IP: Logged
Lindar
recent-rabble-rouser
Babbler # 982

posted 24 March 2006 09:55 PM      Profile for Lindar     Send New Private Message      Edit/Delete Post  Reply With Quote 
Since I'm being truthful and I am owning my own words, there is no risk of libel. However I am so offended by being edited that I am resigning forthwith.
From: timbuctu | Registered: Jul 2001  |  IP: Logged
Crippled_Newsie
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Babbler # 7024

posted 24 March 2006 10:04 PM      Profile for Crippled_Newsie     Send New Private Message      Edit/Delete Post  Reply With Quote 
A flounce after 12 posts. Wow. Is that a record?

[ 24 March 2006: Message edited by: Crippled_Newsie ]


From: It's all about the thumpa thumpa. | Registered: Oct 2004  |  IP: Logged
beaver
rabble-rouser
Babbler # 10226

posted 24 March 2006 10:16 PM      Profile for beaver     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Why would someone agree to this? Well some are probably desperate. And probably a lot of people get sucked in as I did.

Lindar, I've agreed to the same thing two times for two reasons.

Once because I was the friend of a small business owner who claimed she couldn't afford to pay me for working holidays, or for taxes and CPP. She convinced me it was in my best interest, since I wouldn't be paying taxes. In this case it definitely wasn't in my best interest. I worked EVERY holdiay, pay cheques were irregular, bookkeeping was irregular, purchasing was irregular, everything was irregular. I was a very young person and this place wasn't exactly J.A.

I opted for a similar situation again a few years later because by becoming an independent contractor I could save the taxes through the year myself, and then claim a variety of expenses when I filed my taxes, like vehicles, clothing, lunches, etc. It was lucrative. I also had a great deal of freedom.

quote:
She has chosen to ignore the definition and told me to like it or lump it. I once broached the issue with a member of the Board of Directors, when I was disappointed that the status continued. It went back to her immediately. I was told, "Talk to a Board Member again and I will be told immediately and you will be fired."


Radiorahim's leaflet (above) guides people in your position to write everything down. Make records of when you work, what you do, who you have spoken to and what they have said. This is very sound advice, and it will make your life easier no matter what you decide to do about it.

From: here and there | Registered: Aug 2005  |  IP: Logged
robbie_dee
rabble-rouser
Babbler # 195

posted 24 March 2006 10:47 PM      Profile for robbie_dee     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Since I'm being truthful and I am owning my own words, there is no risk of libel. However I am so offended by being edited that I am resigning forthwith.

You may be telling the truth but you can't be "owning your words" because you are posting under a pseudonym.

Readers can choose to believe your story or not, but if you were lying you could subject the owners of this site to liability for libel, while taking no risk yourself. How is that fair?


From: Iron City | Registered: Apr 2001  |  IP: Logged
HeywoodFloyd
token right-wing mascot
Babbler # 4226

posted 24 March 2006 10:57 PM      Profile for HeywoodFloyd     Send New Private Message      Edit/Delete Post  Reply With Quote 
Exactly the point I was trying to make. Making allegations about someone and naming them is not fair when done behind a pseudonym.
From: Edmonton: This place sucks | Registered: Jun 2003  |  IP: Logged
Michelle
Moderator
Babbler # 560

posted 24 March 2006 11:02 PM      Profile for Michelle   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Lindar:
Since I'm being truthful and I am owning my own words, there is no risk of libel. However I am so offended by being edited that I am resigning forthwith.

I'm sorry, Lindar, but owning your own words in this case means printing them on your own web site and hosting your words yourself, under your full name. If you do it on this site, WE are the ones who have to back up your story.

I'm sure you can imagine that given our registration system (completely open to anyone, and anyone can post anonymously), anyone can come here and post something about a private citizen or an organization that might not be true. We have no way of verifying the story. We have no problem with personal anecdotes, but you can't claim that x person or x organization is doing something illegal with nothing backing it up.

I wish it could be different, but the fact is, we've had it happen before that people HAVE posted things that AREN'T true about individuals or organizations. It does happen. And it does happen that, when it gets back to the person or organization, that we've been contacted by them, very unhappy about it, and sometimes threatening legal action if we don't have the claim removed.

Sorry that's upsetting for you, but that's just how it is when you're writing something on someone else's web site. If you want to take on your employer by name in a public medium and claim that they're engaging in illegal activities, then I suggest you use your own web site or blog to do so, and you can be responsible for whatever happens.


From: I've got a fever, and the only prescription is more cowbell. | Registered: May 2001  |  IP: Logged
skdadl
rabble-rouser
Babbler # 478

posted 25 March 2006 10:57 AM      Profile for skdadl     Send New Private Message      Edit/Delete Post  Reply With Quote 
I'm another who has been in something very like Lindar's situation.

Sadly enough, practices like these are common among some of the small businesses and non-profits that progressive people would most like to be supporting. Some of us go along for a while, to our own cost, because we believe in the cause or the work being done.

In the early seventies, eg, I worked for a couple of small publishers who were playing more-or-less legal but complicated games with grants and employment conditions, and I played along for a time, although I finally got fed up with having neither the financial security of a real job nor the freedom of freelancing.

I remember the self-righteous scorn I encountered from one boss when I explained to him my reasoning. My thinking about my own survival he was definitely casting as a betrayal of a nobler cause ... And, y'know, there might still be causes I could feel that for - but his company, finally, wasn't one of them.

In contexts like that, though, it's a shame. Trying to do creative work in a culture of scarcity is just hell. It twists a lot of people.

[ 25 March 2006: Message edited by: skdadl ]


From: gone | Registered: May 2001  |  IP: Logged
DrConway
rabble-rouser
Babbler # 490

posted 25 March 2006 03:38 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
I can only wince at how screwed the "worker" gets when the company puts him or her as a self-employed contractor, and tells him or her to take the usual deductions (vehicle insurance, gas, that sort of thing) available to the self-employed, only to have Revenue Canada disallow all the deductions because they decided the employer was falsely trying to avoid obeying labor laws as well as evading payment of CPP and EI.

I wonder if there's grounds for a lawsuit to force the company to pay damages equivalent to the extra tax that had to be paid by the employee as a result.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Contrarian
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posted 25 March 2006 05:07 PM      Profile for Contrarian     Send New Private Message      Edit/Delete Post  Reply With Quote 
I've been in a similar situation, considered an independent contractor while using the employer's work space and tools; however, it paid well by my standards so I didn't feel that exploited. The worst financial result was that I could not claim home office expenses. Still, it was nice to have regular, well-paid work and security for a while, though I stayed with it too long and got kind of burned out.

I think to begin with I was an independent contractor, free to work on other stuff, but gradually there was so much to do that it became full time. I gradually came to be treated more as an employee, with less control over the work, though I still had some control over my time. I think they eventually became anxious about the developing government definition of contractor vs. employee, so they decided to have inhouse staff to do the work.


From: pretty far west | Registered: Jul 2004  |  IP: Logged
Contrarian
rabble-rouser
Babbler # 6477

posted 11 April 2006 12:30 AM      Profile for Contrarian     Send New Private Message      Edit/Delete Post  Reply With Quote 
I'm going to bump this thread because some people were commenting on audra's precarious position as a contract worker, a situation which quite a few of us share. Also for comments about working for non-profit groups, etc.
From: pretty far west | Registered: Jul 2004  |  IP: Logged
Wilf Day
rabble-rouser
Babbler # 3276

posted 11 April 2006 02:55 PM      Profile for Wilf Day     Send New Private Message      Edit/Delete Post  Reply With Quote 
This is a very relevant discussion, and as far as I know, entirely accurate.

One point has not been made: some people want to be "contractors" so that they can claim home office expenses, travel expenses, depreciation, and the other expenses open to the self-employed. A freelance legal secretary who does overload work from her home is a fair example. However, when such a freelancer takes a temporary contract position in someone's office (for example, during a maternity leave) she will try to maintain her non-employee status and be paid without deductions, while her nervous employer will say "I could be in jeopardy, I'm sorry, you're an employee, I'm deducting tax and CPP and EI from your salary." So it can cut both ways.


From: Port Hope, Ontario | Registered: Oct 2002  |  IP: Logged
HalfAnHourLater
rabble-rouser
Babbler # 4641

posted 11 April 2006 03:47 PM      Profile for HalfAnHourLater     Send New Private Message      Edit/Delete Post  Reply With Quote 
Please, comrades,

take the discussion over HERE!


Solidarity!


From: So-so-so-solidarité! | Registered: Nov 2003  |  IP: Logged
lindaro
recent-rabble-rouser
Babbler # 12981

posted 29 July 2006 12:12 PM      Profile for lindaro   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
I started this thread some time ago and was upset at the response. I just thought I would come back to let people know that I won the CRA decision and my former employer will have to pay all the back CPP and EI that they dodged. The CRA people were very helpful, supportive and worked quickly to help me. I would urge any employee forced to report their earnings as self-employment when in fact they are employees to pursue this course of action without fear that it is going to be difficult or lengthy. There are links to all the necessary information and forms on my blog

I am now happily employed somewhere else.

Far from libelous, my original posts (that were deleted or edited) are now completely vindicated.

I continue to be puzzled about why a supposedly activist site like Rabble would put a very slim concern about libel over the activist job of exposing an exploitive employer. In this instance CRA was more progressive than Rabble. Their decision will be publically available with the employer name. Taking risks on principalled stands is part of the activist job description, I thought.


From: Toronto | Registered: Jul 2006  |  IP: Logged
jester
rabble-rouser
Babbler # 11798

posted 29 July 2006 12:36 PM      Profile for jester        Edit/Delete Post  Reply With Quote 
Any responsible employer will protect themselves from this all too common situation by not contracting with individuals.

If one does not have a limited company,complete with CRA Business number and WCB coverage,one is not a legitimate contractor.

Most WCBs will not issue coverage to individuals because it is a scam for unscrupulous employers to dodge responsibility.

While one can be a legitimate contractor as an individual rather than a corporation,the reponsibility for an individual's tax deductions,UI,CPP,WCB etc.is entirely the employer's.

Anyone who is victimised by this scam can merely contact CRA after Feb 28 and report they have not received a T-4.The onus is then on the employer to prove a legitimate contract existed.

As others have posted above,if the employer cannot meet the criteria for contract status,they are liable for the costs.Employer will take this risk because they can cheat the "contractor" out of 15-20% of their pay.

That is the average cost for employer's share of CPP,UI,hol pay,stats etc.If substantial overtime is involved,it can be much more.

As far as job loss is concerned,with the present skills shortage in Canada,why would anyone want to keep a crappy job with a predatory employer?


From: Against stupidity, the Gods themselves contend in vain | Registered: Jan 2006  |  IP: Logged
lindaro
recent-rabble-rouser
Babbler # 12981

posted 29 July 2006 01:01 PM      Profile for lindaro   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Jester, your points are well-taken. In my case I valued the projects I was working on and I continued in good faith belief that my employer was simply ill-informed on the definition of self-employed versus employed status.

When I first accepted the job--with a well-respected charitable organization--I was told it was a shortterm contract with the possibility of additional work. I didn't understand that "shortterm contract" meant "self-employed" contract. In fact my contract had language in it that stated that all relevant labour laws would be followed . So it never entered my head that I would not be considered an employee until I received my paycheque. Then I thought it was a mistake. When I asked my employer about it I didn't get straight answers, instead I heard, "oh, I'll have to speak to so and so on the Board about that and if I'm wrong we'll fix it", and then I heard, "well if you'll just be patient until we hear about X funding, we'll do a new contract".

I believed in the organization, the mission and the work and I was played for a sucker for a year. I kept being presented with new job descriptions and was asked to also provide some idea of a role that I could take on so that we could finalize this "new contract". In the process I took on more and more work to try to convince this employer to give me the promised contract and status. I spoke to the Board which prompted a huge explosion and threats of firing. By this time so much time had passed that I had no EI protection whatsoever. And I was totally burned out from the excessive workload.

Finally I took the unilateral action of refusing to turn up for work at a critical time until I had the proper contractual status. The result was being offered a shortterm contract with reduced status to finish up pressing work with the clear implication that would be the end of my time with the organization.

There needs to be "whistle-blower" protection built into the CRA process for seeking employed or self-employed status.

By the way it is not necessary to wait until Feb. The forms for asking CRA for a determination of employed or self-employed status are downloadable on their website and may be used by anyone anytime during their employment and up to six months after the end of the tax year in which they finished employment.


From: Toronto | Registered: Jul 2006  |  IP: Logged
jester
rabble-rouser
Babbler # 11798

posted 29 July 2006 04:00 PM      Profile for jester        Edit/Delete Post  Reply With Quote 
quote:
By this time so much time had passed that I had no EI protection whatsoever.

Sure you did.Just because an unscrupulous employer says you don't means nothing.It is EI,not the employer who determines who is covered.

Because the employer did not remit your contributions does not mean you are not covered,it means the employer is in arrears with EI.


quote:
There needs to be "whistle-blower" protection built into the CRA process for seeking employed or self-employed status.


Not necessary.There needs to be an improvement in awareness of the present CRA regulations.


quote:
By the way it is not necessary to wait until Feb. The forms for asking CRA for a determination of employed or self-employed status are downloadable on their website and may be used by anyone anytime during their employment and up to six months after the end of the tax year in which they finished employment.


I am aware of that. My reasoning for the T-4 request after Feb 28 is that for the less resolute worker who may not be up to the challenge of scrapping with their employer, the T-4 request puts the employer squarely in the sights of CRA and the complainant is out of the fray.

Any remuneration paid to the "contractor" would be considered net pay by CRA with the employer on the hook for the unpaid remittances.

Yes,payback is a bitch but as far as I,m concerned,decent employers don't pull this contract scam and the more that the unscrupulous employers get burned by CRA,the less likely they will be to try again.


From: Against stupidity, the Gods themselves contend in vain | Registered: Jan 2006  |  IP: Logged
otter
rabble-rouser
Babbler # 12062

posted 29 July 2006 07:05 PM      Profile for otter        Edit/Delete Post  Reply With Quote 
What all this tells me is just how cheaply some folks will sell themselves. If people didn't take the jobs the situation would not exist. Of course there can be dramatic economic consequences to turning the job down. But that is why some decisions in life are hard.
From: agent provocateur inc. | Registered: Feb 2006  |  IP: Logged
lindaro
recent-rabble-rouser
Babbler # 12981

posted 29 July 2006 07:28 PM      Profile for lindaro   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Otter, your post is a little hurtful. Did you mean to tell me that I was a fool for selling myself so cheaply? Is that the level of dialogue you feel is appropriate? A person is sharing a bad experience so let's kick her?

Once again, I joined the organization because I believed in their work. And I had no idea that they would not be treating me as a regular employee.

Jester, you got it. That was my hope absolutely and my reason for carrying the issue forward. I did sincerely hope that because it was a non-profit that people of good conscience were supporting that it was an innocent mistake that would be corrected. I trusted in good will.

I have worked in the non-profit world since 1974 (taking time off here and there '75 to '85 to be a stay-at-home mom) and I have never run across such a blatant case of this type of behaviour--with the attendant lying, manipulation and abuse. I was truly shocked.

You may be right about EI entitlement. I didn't have to try that as I found another position. Certainly I felt afraid that I wouldn't have any cushion if I just left--any EI appeal might take months-- and that made me try to negotiate a mutually agreeable arrangement with my existing employer, who kept stringing me along. This insecurity worked out very well for them because I felt unable to say "no" to whatever preposterous assortment of duties, or requests to perform tasks with no resources that came at me.

Being over 50, I wasn't sure how long it would take me to find another position, despite a good track record.

[ 29 July 2006: Message edited by: lindaro ]


From: Toronto | Registered: Jul 2006  |  IP: Logged
Polly Brandybuck
rabble-rouser
Babbler # 7732

posted 29 July 2006 08:51 PM      Profile for Polly Brandybuck     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by otter:
What all this tells me is just how cheaply some folks will sell themselves. If people didn't take the jobs the situation would not exist.

I dunno, I often had to take work because that was what was available to me and no matter what, the family still needed food and shelter. Does that add up to selling myself too cheap? Hello?


From: To Infinity...and beyond! | Registered: Dec 2004  |  IP: Logged
jester
rabble-rouser
Babbler # 11798

posted 29 July 2006 11:34 PM      Profile for jester        Edit/Delete Post  Reply With Quote 
quote:
Originally posted by otter:
What all this tells me is just how cheaply some folks will sell themselves. If people didn't take the jobs the situation would not exist. Of course there can be dramatic economic consequences to turning the job down. But that is why some decisions in life are hard.

Some decisions in life are hard and the rest are harder.Blaming the victim is not appropriate.

It is a case of the powerful victimising the powerless.


From: Against stupidity, the Gods themselves contend in vain | Registered: Jan 2006  |  IP: Logged
lindaro
recent-rabble-rouser
Babbler # 12981

posted 30 July 2006 04:35 PM      Profile for lindaro   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
The lack of information out there is what has really motivated me to speak out.

1) My employer and the Board of Directors of the non-profit I worked for--which I would gladly name except that was deleted here previously--were largely ignorant that their actions were illegal and could have economic consequences for the organizations. The manager was aware that she was proposing an arrangement that was technically wrong but persisted in the belief that this was a victimless arrangement that was in some "gray area".

2)When I wanted to get information for myself I contacted the Employment Standards office in Ontario, asked family members working in the legal profession and did online searches. It was really hard to find the information.

3) When I did have the forms in hand, it was not clear on the forms what additional information was required to prove employed status and I had to phone CRA and go through a few people to get that help.

4. When I asked how long the decision might take from a labour lawyer. I was told "up to two years". In fact it only took less than two months.

5. Some young workers in my organization really believed that it was okay for the organization to make this kind of arrangement with me and kept telling me to lie on my taxes and claim self-employed deductions--a potentially disasterous course of action. They believed that because I had signed a contract I had signed away my legal rights--at least for the duration of that contract. The principle that you can't sign away your rights was revolutionary to them. These were all college grads, some with advanced degrees.


From: Toronto | Registered: Jul 2006  |  IP: Logged

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