At Red Leaf Wellness, we prioritize hiring employees over contractors for several key reasons that align with both our organizational goals and government regulations. According to the Canadian Revenue Agency’s guide RC4110, the employment status of an individual has implications not just for income tax but also for contributions to Employment Insurance and the Canadian or Quebec pension plan.
- Stability and Ongoing Relationship: Employees usually have a continuous relationship with their employer, which is beneficial for both the clinic and the practitioner in terms of stability and long-term planning.
- Control and Quality: As an employer, Red Leaf Wellness maintains a level of control that ensures the quality of care provided meets our high standards. This is harder to guarantee with contractors who operate more independently.
- Tools and Equipment: Employees are provided with the necessary tools and equipment, which are also maintained by the clinic. Contractors, on the other hand, would need to invest in their own tools and be responsible for maintenance.
- Financial Risk and Benefits: Employees are generally not at financial risk and are entitled to benefits such as our Employee Education Assistance Program., which are not usually available to contractors.
- Regulatory Compliance: To be considered a contractor, an individual must meet several criteria such as doing their own source deductions, being incorporated, bringing their own supplies, and being at financial risk. These criteria are often difficult to meet in the context of our clinic’s operations.
- Lucrative Compensation Model: Our compensation model is particularly beneficial for staff who work exclusively for us. According to CRA guidelines, working exclusively for one organization is usually indicative of an employee-employer relationship, meaning that whether or not both parties agreed to a contractor relationship, CRA may determine it is actually an employer-employee relationship. Even if a contract states that a worker is a contractor, the CRA will look at the actual nature of the work relationship. This is crucial because it means that merely labeling someone as a contractor doesn’t make them one in the eyes of the law.
- Risks of Incorrect Classification: The risks of not treating this situation correctly include assessments from the CRA where interest and penalties could be levied after an audit. This underscores the importance of being diligent in classifying workers correctly.
- Financial Dependence: Our lucrative compensation model is designed to be most beneficial for those who work exclusively for us, aligning with the criterion of financial dependence on a single organization as a strong indicator of an employee relationship.
- Intention of the Parties: We make it clear from the outset that we are establishing an employee-employer relationship, complete with benefits like educational assistance, which is usually indicative of an employee status.
- Chance of Profit/Risk: Our employees are not at financial risk, further solidifying their status as employees.
By incorporating these points, we offer a more nuanced and comprehensive explanation for our preference for hiring employees. This not only aligns with our organizational goals but also ensures that we are in compliance with CRA guidelines.