Canadian HR Reporter

CANADIAN HR REPORTER August 7, 2017 NEWS 7 With so many changes facing organizations today, it is important to stay current. Many human resources professionals become certified by the Canadian Payroll Association (CPA) to increase their career opportunities and keep up-to-date with changing organizational roles. Past graduates of the CPA's certification programs report an increased sense of confidence in understanding and applying payroll requirements. They also benefit from having the support of an organization with a dedicated InfoLine to answer any payroll questions and issues that arise. Payroll certification enhances career development for HR professionals, enabling you to garner respect as an experienced professional and providing you with education to add value to your employer. Graduates who complete the Payroll Compliance Practitioner (PCP) certification recognize that payroll is not just about the numbers but, just like HR, is about helping people achieve their goals. HERE'S WHAT SOME GRADUATES HAD TO SAY: "Our learning never ends. There is always changing legislation to keep abreast of. Employers love that we continue to learn and grow. Organizations know certified payroll practitioners will keep their costs down by being compliant." – Cathy T., Milton, Ontario "Becoming a Payroll Compliance Practitioner (PCP) was empowering. What I ended up receiving from certification far exceeded my expectations. The investment you make in yourself is one that will have continual rewards through your career." – Michael P., Toronto, Ontario "Know you are not only in the business of paying people; you are helping others save for their retirement, go on a dream vacation, put a down payment on a home and send their kids to college." – Sandra B., Burnaby, British Columbia Becoming a PCP or a Certified Payroll Manager (CPM) requires only four-courses, available at many colleges and universities or online and one year of demonstrated on-the-job experience. Register today or try our learning platform demo at payroll.ca. Courses are available online and through colleges and universities across Canada. The Value of Being Informed ADVERTISING FEATURE THE CANADIAN PAYROLL ASSOCIATION There is recognition that a number of relationships that used to be employment relationships are now being characterized as contractor relationships, for vari- ous reasons, "not least of which may be some tax savings on the part of the contractor," said Chris Lane, a partner at the Edmonton office of McLennan Ross. at may have led government to say: "Perhaps we should extend some benefits that ordinarily would go to employees to these folks," he said. "I think there was a feeling these people have some vulnerability because they have these very long relationships and, therefore, that vulnerability de- serves some protection." But when it comes to indepen- dent contractors, they're often treated as a large, homogeneous set, with no appreciation for the nuances or diversity of those with- in, said Graham Smith, an inde- pendent contractor and member of the Association of Professional Canadian Consultants in Calgary. "e topic du jour has definitely been along the lines of precarious work, which is a term that's been broadly applied, ranging from ev- eryone to Uber drivers and those engaged in the gig economy to those (who) are high-skilled, high-trained, in-demand profes- sionals," he said. "It's a little bit of a big-tent effort in trying to wrap arms and minds around some- thing that is more than one issue. It's a complex thing." Potential impacts The concern is that the gov- ernment is maybe not being as forward-looking or as helpful as it could be, said Smith. "ere's a need to protect those who are in vulnerable positions and those who do need support and need to have some additional oversight or assistance in terms of making sure their rights are protected and that they're not being taken advantage of. We've seen that in the past — misclassi- fications, concerns around where employers have used the indepen- dent contractor label to maybe (avoid) some of their responsibili- ties," he said. "ere's also a concern that by trying to enforce protections or cling to old ways of working or po- tentially 1960s-style approaches to labour, that's not going to po- sition the Canadian economy for success in the future." For independent contractors, that means unpredictability on both sides of the equation, as em- ployers may not have complete visibility into how to engage with a contractor, and contractors may not have complete visibility or certainty in terms of how they may be treated by the Canada Revenue Agency (CRA) or a third party, said Smith. "ose risks are the things that ultimately introduce friction to that relationship," he said. "ere are also disincentives for corporations or for potential clients to look for contractors and, in particular, Canadian con- tractors to meet their needs. So, unfortunately, it ends up having the unintended impact of having the opposite impact of what it's in- tended to do, which is rather than create and protect jobs, it actually drives them away." In Ontario, enforcement of em- ployment standards puts the onus solely on an employer to prove the independent contractor is not de- pendent, said Bandali. "That's a significant switch for employers because now they face the risk, the financial risks, and then you start coupling that with reputation and publicity, legal costs — it starts to become significant." ere are four major criteria used to assess if someone is an in- dependent contractor: control of the work, the risk of loss of profit, ownership of tools, and the indi- vidual's integration into the orga- nization, he said. "Based on those four major cri- teria, most contractors fall into a dependent category." e introduction of "dependent contractor" adds another layer of complexity, said Smith. "e reality is that there isn't probably a way that it can be clarified in terms of who is a true independent contractor versus someone who has another form of relationship… what's missing is a clear, consistent application of those standards, as opposed to adding more complexity." e provision relating to who is a dependent contractor has been entrenched in the Canada Labour Code legislation for a long time, but there has been significant liti- gation around the issue, according to Lane. "e factors to be looked at are quite voluminous in terms of re- ally how dependent that person is on the other party they're con- tracting with. So I expect there to be a fair amount of litigation over that." Employers used to be able to say they hired an independent contractor and any tax risk was up to these individuals, said Ban- dali. But common law cases have seen employers successfully sued for severance and pay in lieu of notice — so now the risk falls to the employer. And with the introduction of dependent contractors in Alberta, it's not naive to think some groups in construction, oil and gas, agri- culture or the public sector won't unionize, because those indus- tries have unions already, he said. If dependent contractors can now be unionized, the contracts they have with their work sup- pliers will end once a collective agreement comes into effect, said Lane. "Of course, unions want to add value to their members, and so you would expect that certain of the terms and conditions the (de- pendent contractors) were work- ing under before unionization will become more favourable to the (dependent contractors) — including financial things such as pay and benefits and non-finan- cial rights, which nevertheless may impose extra overhead on their 'employers.'" Going forward, employers need to take care when it comes to us- ing contractors, said Bandali. For example, using a third-party staff- ing agency to manage the contrac- tors is not a safe harbour. "ey're facing increasing scru- tiny as well," he said. HR needs to take more re- sponsibility when it comes to the management or forecasting of the risk associated with independent contractors, said Bandali. ere are safe ways to do it, he said. If a contractor pays the right amount of taxes but maintains the benefit of being a privately held corporation — so is still entitled to the business deductions and tax benefits of being an incorpo- rated entity — that's what makes him safe from the CRA and less likely to be seen as dependent contractor. "e evolution of independent contracting is changing, and or- ganizations need to see that," said Bandali. Employers face more risks CONTRACTORS < pg. 1

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