Canadian HR Reporter

CANADIAN HR REPORTER August 8, 2016 INSIGHT 19 Transitioning from employee to contractor A look at steps an employer can take to ensure a proper working relationship Question: If an employer wants to termi- nate a full-time employee and off er him a position as an independent contrac- tor (IC), what must be done to ensure the relationship is that of a contractor and no longer that of an employee? Answer: While there is no way to guarantee that an individual will be viewed at law as an indepen- dent contractor, there are steps the employer can take to increase the likelihood that such a relation- ship would be found. 1.Formally sever the employ- ment relationship. For the em- ployment relationship to properly end, it must be terminated with proper notice (or pay in lieu) and severance (if applicable). Alternately, the employee can resign by providing proper writ- ten notice. e employee should be provided with a record of em- ployment that clearly indicates the employment relationship has ended. 2.Prepare the independent contractor agreement. e in- dividual and the employer should create an independent contractor agreement. is should indicate, in the recitals, that the individual was formerly an employee but chose to become an indepen- dent contractor and the employ- ment relationship was properly severed. Any "employee" benefits to which the individual was previ- ously entitled should cease; the fact that there are no entitlements to benefi ts (such as health and dental) should be clearly stated in the agreement. e new remuneration model should be based on invoices provided by the IC for work per- formed (as opposed to a regular "salary"). Other terms of the agreement will vary, but they should in- clude the key indicators of an IC relationship. One of the central considerations in determining whether the relationship is one of IC is how much control is exerted over the individual by the com- pany (the less control over the IC the better), with regard to the fol- lowing factors: •the IC's ability to control hours and place of work •whether the IC brings her own tools to the work (the more the IC brings to the workplace, the better) •the amount of oversight the com- pany has over the IC — the more oversight (such as daily direction or ability to discipline), the less likely the individual will be found to be an IC •the degree to which the IC stands to profi t or lose and how much risk is involved for the IC (the greater the chance of profi t and loss and the more risk, the great- er the arrangement looks like an IC arrangement) •whether the IC can hire assis- tants for completing the work (such assistants to be employees of the IC, not the company) •whether the IC can perform work for more than one entity (an IC should be able to provide services to a variety of entities). is list is not exhaustive but provides a sense of the various indicators of an IC relationship. If any terms need to be changed during negotiations, keep the above factors in mind. Finalize the agreement and clearly indicate that the IC was given an opportunity to seek in- dependent legal advice (a best practice for any contract) prior to agreeing to the terms. 3.Act like the individual is an IC. e contract is very impor- tant, but so is the behaviour of the company and the individual. If the individual, in practice, is heavily controlled by the company, it is possible that the relationship will be found to be that of employee/ employer. Therefore, the above factors must be considered not only with regard to the preparation, but also with regard to the execution of the contract. Brian Johnston is a partner at Stew- art McKelvey in Halifax. He can be reached at (902) 420-3374 or bjohn- ston@stewartmckelvey.com. Brian Johnston ToUghest HR QUestion For the employment relationship to properly end, it must be terminated with proper notice (or pay in lieu) and severance (if applicable). Does new Pokémon GO game reveal future of graduate recruitment? App may point towards additional strategy for talent acquisition, engagement By Kate Smedley If recent events have demonstrated one thing, it's the ability of augmented reality to attract and hold the attention of mil- lions of people around the world. Poké- mon GO has become the world's most downloaded app, prompting concern about its ability to distract users in the workplace. Boeing quickly became the fi rst company to ban its use during working hours. Daily time spent in Pokémon GO by the aver- age IOS user outstrips the most popular apps such as Facebook, Snapchat, Twitter and Instagram. Social media, artifi cial intelli- gence (AI), wearables and virtual reality are already driving digital recruitment. Virtual reality allows employers to reach a wider talent pool by off ering online assess- ments and video interviews that reduce both the time and cost of hire. A recent article from Jessica Stillman in Inc magazine also promoted the idea of virtual real- ity having the potential to reduce bias in hiring in the future. Is aug- mented reality the next step? Since traditional hiring pro- cesses aren't always eff ective in attracting top graduate talent, digital technologies have emerged as an alternative recruitment mar- keting and engagement tool. For example: Gamification: Gamification is used by several companies, in- cluding Lloyds Banking Group, KPMG and Deloitte, to attract high-achieving graduates and is eff ective in identifying skilled candidates as well as enabling employers to speed up the hiring process in a competitive market. Fifty-seven per cent of the United Kingdom is involved in gaming on a regular basis, with companies such as PwC using dedicated online games such as Multipoly across all of its hiring process. Virtual offi ce tours: e real- ity of working in most offi ces is generally mundane and routine. Innovative exceptions come from global brands such as Google or Lego, which recently unveiled its new London offi ces, designed to mimic an environment construct- ed entirely from Lego blocks. Virtual tours can, however, be used to introduce candidates to their potential future employer to provide insight into company culture. Wearables: Wearables used in graduate recruitment off er a num- ber of advantages. For instance, they provide insight into the hir- ing process, when combined with HR analytics. ey also help HR to understand the behavioural patterns of candidates, including their response to stress during interviews. These come with caveats, of course, requiring candidate per- mission and careful analysis to ensure objective assessments dur- ing hiring. Augmented reality: As digi- tal technology rapidly advances, Pokémon GO may point to- wards an additional strategy for future talent acquisition and engagement. It allows users to work in teams via their mobile devices, which may have the potential for com- panies assessing the collaboration skills of graduates, for example. For some, this can prove prob- lematic when making the transi- tion from an educational environ- ment that discourages teamwork into their fi rst job. Augmented reality is in the future but should not be ruled out. Google is reportedly moving ahead with a headset that mixes virtual and augmented reality and doesn't require the use of a mobile device or computer. Social media: Away from the potential of augmented reality, employers must also consider so- cial media's role in attracting and retaining graduate talent. Access to social media was ranked "im- portant" by over two-thirds of students when making a career choice, according to Expectations of Work by job search app Debut, which surveyed 12,000 students. Only an annual pay rise was considered more important. e freedom to use social me- dia is a major attraction for a gen- eration brought up on 24-7 con- nectivity. at said, pay rises and health care are also assumed to be a given. How this sits alongside the dis- tracting use of Pokémon GO is yet another factor to be considered. Obstacles to digital growth e principal obstacle to growth lies in the shortage of basic digital skills in the U.K. workforce. Em- powerment: e Barclays Digital Development Index ranks the U.K. seventh out of 10 countries in content creation and coding skills. Just over one-third (38 per cent) of employers train staff in essen- tial digital skills, leaving the U.K. outranked by countries such as Estonia and South Korea. To add to the concern, the CBI found that nearly one-third of U.K. businesses are concerned about the lack of basic numeracy and literacy skills among young people. is will be exacerbated by the shortage of jobseekers entering the workforce. e government's 2016 Working Future Report pre- dicted a rise in the total number of jobs of 1.8 million between 2014 to 2024. ese numbers will not be matched by the graduates and school leavers. The potential of augmented reality epitomized by Pokémon GO in recruitment is not easy to predict. As concern continues over the impact of Brexit, human resourc- es must continue to navigate its way through a hazardous jobs market while embracing digital technologies in all aspects of tal- ent management processes. A recruitment and HR expert, Not- tingham, U.K.-based Kate Smedley writes on behalf of Advorto, provider of recruitment software. It allows users to work in teams via their mobile devices, which may have the potential for companies assessing the collaboration skills of graduates. Kate Smedley GUest CoMMentary If recent events have demonstrated one thing, it's the ability of augmented reality to attract and hold the attention of mil- lions of people around the world. Poké- mon GO has become the world's most downloaded app, prompting concern about its ability to distract users in the

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