If a payer considers a worker as a self-employed individual while the worker is in fact an employee, the payer will have to pay both parts of EI premiums and CPP/QPP contributions for the complete duration of the employment. Penalties and interest can also be charged. It is therefore very important to correctly determine the type of employment relationship.
The consequences of improperly classified workers can be expensive, especially in a long-term working relationship. Workers may be considered employees if the employer:
· Provides the premises where work is done; or
· Provides tools or equipment for the work; or
· Exercises management, direction or control over the individual.