Quote:
Originally Posted by mpahlca
As John said look into the legalities of it in your area. Its not illegal to do it in Canada as long as the individuals have their own companies and they are hired as sub contracts for a specific job with an end date.
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Here's the skinny -
Some people try to commit fraud by lying and saying that employees are outside contractors. That's obviously illegal pretty much anywhere. It's perfectly legal to use actual independent contractors. It's just that if you want to treat them like independent contractors for tax purposes, you have to treat them as independent contractors on a day to day basis.
In general, with employees you pay for their time. With contractors, you pay for a result. Some differences between employes and independent contractors can include:
Employees are expected to arrive at a certain time and work a certain number of hours per day.
Contractors are expected to finish a project by a certain date, but work any hours they want.
Employees use tools provided by the employer, such as company computers.
Independent contractors use thrir own tools and equipment.
Employees personally do the work.
Contractors can hire assistants or sub-contract part of the work.
We have an employee here who was a contractor for us for a while. During his time as a contractor Ali started to say something about him being late and I had to stop her. Since we were treating him as a contractor, not an employee, we had no right comment on what time he came to work. He was his own boss. We were his customer, not his employer. Now, we want him here at a certain time each day, so he's now an employee.