Contract Employees – Independent Contractors Policy

HR-07
Contract Employees – Independent Contractors Policy
DepartmentHuman Resources
Creation DateApril 1, 2004
Approval DateAugust 1, 2008
Effective DateAugust 1, 2008

Organizational Scope

Contract Employees/Independent Contractors

Purpose

Michener is committed to providing the best education for its students, and looks to recruit and/or contract qualified employees to support that goal. This policy defines how individuals or companies that provide service to Michener enter into a contract with Michener and are paid for those services by Michener.

Definitions

Contract full time or part time employees

Employees contracted to work for a defined period of time that are hired through Human Resources and paid by Payroll. Services that constitute a total of less than $500 per calendar year will be paid through Accounts Payable.

 

Fee Contract for Existing Employees

 

Existing Michener employees who wish to provide services outside of their defined conditions of employment.

Independent Contractors

Independent contractors, (as defined in Appendix A), will be paid through Accounts Payable. This arrangement would require completion of an Independent Contractor Agreement. Registered companies would be required to submit a GST business number.

Secondments

Employees normally hired for a defined period of time from another organization. Conditions of employment are usually outlined in an agreement between Michener and the other organization.

Policy

Contract full time or part time employees

Hiring a new employee on an employment contract:

  • A Request to Hire or Recruit Staff form must be filled out by the manager initiating the recruitment or hire and submitted to the relevant Vice-President for approval. The request may be subject to further approval by the Executive Leadership Team if it is outside approved fiscal budgets.
  • The approved Request to Hire or Recruit Staff form is then submitted to the Manager, Human Resources & Employee Relations who will, along with the requesting manager, start the recruitment/hire process.

Renewing an employment contract:

  • A Request to Hire or Recruit Staff form must be filled out by the manager and submitted to the relevant Vice-President for approval. The request may be subject to further approval by the Executive Leadership Team if it is outside approved fiscal budgets.
  • The approved Request to Hire or Recruit Staff form is then submitted to the Manager, Human Resources & Employee Relations who will be responsibly for creating a letter outlining the extension.

Services that are provided that constitute a total of less than $500 per calendar year will be paid through Accounts Payable. The form Agreement for Services Less than $500 per Calendar Year must be completed, appropriately signed and submitted to Finance.

Fee Contract for Existing Employees

  • Current full-time and part-time faculty and staff who wish to engage in teaching for part-time, continuing, distance or international education programs, or to perform other services outside of their regular working hours, and outside of normal working hours, may do so.
  • An agreement for employee services other than the defined conditions of employment (Agreement for Employee Services) form must be completed with approvals obtained from the hiring manager and employee’s Chair/Director. Further approval is also required by the relevant Vice President and the Manager, Human Resources & Employee Relations.
  • All fees received will be considered as earned income and subject to all statutory deductions. Fees will be processed through regular Payroll process.
  • Michener prohibits all employees from using company names, other individual’s names or declaring independent contractor status in performing the services.

Independent Contractor

  • Managers who wish to hire external contractors (refer to Appendix A for definition of independent contractor) e.g. to engage in teaching part-time, continuing, distance and international education programs must complete an Independent Contractor Agreement form and submit to the relevant Vice President for approval.  The request may be subject to further approval by the Executive Leadership Team if it is outside approved fiscal budgets.
  • The approved Independent Contractor Agreement is then submitted to the Director, Finance.

Secondments

  • Those hired through Human Resources on secondment from another organization may be exempted from this policy at the discretion of the Manager, Human Resources & Employee Relations.
  • Secondment agreements must be signed prior to the individual starting to work at Michener and must be signed by the relevant Vice President.

 

APPENDIX A

 

Independent Contractors (business relationship)

 

To determine if a business relationship exists, Revenue Canada has provided the following guidelines.  These guidelines fall into four (4) categories and are identified and summarized below.  For more details contact the Director, Finance or the Manager, Human Resources & Employee Relations.

Business relationship or employer-employee relationship?

In a business relationship the payer does not usually exercise control over the worker’s activities.  The worker can decide how the work will be performed.

In an employer-employee relationship the payer exercises control of the right to hire or fire, determine the wage or salary to be paid and decides on the time, place and manner in which the work is to be done.

Ownership of tools?

In a business relationship workers generally supply their own equipment and tools and cover costs related to their use.

Chance of profit/Risk of loss

In a business relationship the self-employed individual may make a profit or incur a loss.  He/she also covers operating costs.  There is no guarantee of a steady income because the self-employed individual’s income depends on the results achieved by the end of the contract.

Integration

A business relationship probably exists where the worker integrates the payer’s activities to his own commercial activities.  The worker is acting on his own behalf, he is not dependent on the payer’s business and he is in business for himself.

Associated Documentation

Forms