So you want to be a contractor?

by Rachel Corbett.

Most working relationships in sport organizations are relationships of employment, governed by employment standards legislation. In some cases, however, individuals such as coaches may perform services for a sport organization under an independent contract, and these relationships are governed by contract law.

There are critical distinctions between being an employee and being a contractor, and there is also a legal test to distinguish them, all of which are discussed in detail in our publication ‘A Guide to Employment Contracts for Coaches’.

For the individual who wants to be a contractor, here is a useful checklist to reinforce that relationship in the eyes of the law:

  • Ensure the employer makes no statutory deductions and provides no benefits whatsoever such as health, dental, overtime, lieu days or paid vacations, etc.
  • Hours of work should not be monitored.
  • Be careful how the reporting/supervisory structure is designed. True contractors receive little direct supervision as they go about performing tasks.
  • Structure the pay arrangement so there is some chance of profit (a commission or bonus scheme) and conversely some risk of a loss (penalty for poor results or failure to finish a task on time).
  • Have all termination rights the same for both parties with no additional notice payable to the contractor if the contract is terminated.
  • Where possible and sensible work away from the employer’s business. Alternatively, structure some ‘rental’ of the employer’s premises or equipment.
  • Avoid stating general duties the contractor should perform. Instead, list specific tasks the contractor is responsible to get done and the time frame in which he or she is to do them. Call this document “contractor's deliverables”, or "services to be provided" rather than “job description”.
  • Avoid job titles within the organization. Avoid having business cards indicating an association with the employing organization – all these factors can be considered evidence of an employment relationship.
  • Avoid language that contains employment-related terms, such as job, duties, wages, holidays, supervisor, etc.
  • Keep the term of the contract as short as possible to perform the required tasks. The longer the term the more it begins to look like an employment relationship.
  • There should be no reimbursement for the contractor’s normal business expenses: these should be built into the fee paid to the contractor.
  • Submit an invoice each month for payment. The payment of wages without an invoice is a clear indication of an employee relationship.
  • Contractors should arrange all their own insurance at their own expense.
  • Consider charging GST/HST.

Originally published: Centre for Sport and Law Newsletter (2007) Vol. 3(1)

Recent Posts

Lightening our Load

Understanding the psychology of loss...why we must do better.

Sport Law and NOVA Global Inc Strike a Partnership to Support Sport Leaders

Generative Tension

Leaders as Catalysts for Meaningful Change

Categories

Sign up to our newsletter.
Let's resolve your challenges and realize your vision
together.
crosschevron-right