Independent Contractor or Employee
Determining a worker’s status - Employee or Independent Contractor - is a complex issue and absolute rules are difficult to establish. Faculties/departments and an individual can not make the determination on an employment relationship simply by engaging in a contract that stipulates that the individual is not an employee.
It is important to get the status correct. Failure to classify an employment relationship correctly can result in interest and penalties in the assessment of taxes, CPP, and EI by the Canada Revenue Agency (CRA) for both the university and the individual.
The decision of whether an employee/employer relationship or contract for services relationship exists should be made before the work has begun.
If the faculty/department is unsure whether to classify the individual as an employee or an independent contractor the relationship should be set up as one of employer/employee.
Generally, someone is an employee when:
- The University directs and controls how the work will be done.
- The University provides the facilities and other resources.
- The University runs the risk of loss.
- The work is related to the University’s core business of teaching and research.
Generally, someone is an Independent Contractor when:
- The individual determines the work process to meet the University’s established outcome.
- The individual provides the facilities, equipment and other resources.
- The individual runs the risk of loss.
- The work is not related to the University’s core business of teaching and research.
University of Alberta Policies and Procedures Online (UAPPOL)
Determination of a Worker’s Status Procedure – this UAPPOL policy and procedure provides more details on the determination of a worker’s status.
Determination of a Worker's Status Checklist - The intent of this questionnaire is to assist Faculties and units in gathering the facts and appropriate documentation to make a judgment on how to apply the correct classification for income tax purposes. It is to be used as a tool in conjunction with the Determination of the Worker’s Status Procedure. This is a guide only; CRA is ultimately the deciding authority in all situations.
Employment relationships are processed and paid with all required deductions through the payroll system in Human Resource Services.
Contract for Services
Contract for Services and related payments are processed through Supply Management Services.