Oh boy…where does one begin?
While either you or your “employer” can summarily decide that your position, which is currently an employment position, has become a contracted one, that decision may or may not stand the tests set out in various acts.
Let’s start with employment law: most provinces have employment law designed to protect employees from abuse by employers, and set out “employment standards” which specify such things as mandatory holidays, vacations, pay standards etc. As a “contractor” you have none of those protections.
CRA, for its part (and its collateral pals) have a separate set of laws in determining what is pensionable (for CPP) and insurable (for EI) income. As well, the Courts have set out various determinants of what constitutes an “employment” vs a “contractual” relationship. (This used to be called “master-servant”…and the term, while odious, carries the correct implications.) Where the “employer” controls much of how the “employee” works, when, where, supplies tools etc…the relationship is an “employment” one and is subject to mandatory deductions and T4s etc.
Where there is a “risk of loss”…something there is not for an employee…the relationship may, if the “contractor” controls much of the timing, nature, tools etc. of the work…be a “contractual” one.
But you don’t just get to choose. (Well, you do…but someone will pay a price for doing so eventually. Either you by not being properly paid, or the “employer” by paying both the employees’ and employer’s portions of both CPP and EI. And you having expenses denied and being reclassed as a T4 earner.)
This is an area in which abuse abounds and I’ve fought numerous cases over the years in ensuring that employees (who were not, and never should have been treated as contractors) get the full protections of the provincial and federal laws, entitlement to proper pay and EI etc.
