What is it?
An Independent Contractor is a status identifying the nature of the relationship between an individual providing a service and Carleton, as outlined and applied by the Canada Revenue Agency (CRA). CRA has prepared a guide to help entities determine the nature of their working arrangement as either employer/employee or one of an independent contractor providing a service to a third party.
Tip: You can also search for ‘Employee or Self-Employed’ on the CRA’s website.
Why is this important?
This determination dictates whether the individual will be paid through Payroll and have taxes deducted at source or paid through Accounts Payable and be responsible for reporting and remitting to CRA directly.
It is important for the University to properly classify independent contractors. Unlike employees, independent contractors do not have employment taxes withheld and are not eligible for University benefits. If an individual is incorrectly classified as an independent contractor and should have been hired as an employee, the University/department could be assessed fines by the CRA and/or be required to pay damages to individuals.
Independent contractors are not covered by the university’s insurance so anyone classified as an independent contractor must obtain sufficient liability insurance.
Where do I find more information?
At Carleton, we capture this assessment in the ‘Establishing eShop Contracts for Independent Contractors’ how to sheet. The independent contractor questionnaire (found in eshop) must be completed and the Procurement Policy adhered to before engaging the services of an individual. Please contact Accounts Payable should you require assistance in completing this form.