From 43bcd6e90aa421ee0794ab2339a46481e3ed0f25 Mon Sep 17 00:00:00 2001 From: Alexandre Bobkov Date: Fri, 18 Jul 2025 06:05:13 -0400 Subject: [PATCH] compliance --- docs/source/compliance.rst | 48 ++++++++++++++++++++++++++++++++++++++ 1 file changed, 48 insertions(+) diff --git a/docs/source/compliance.rst b/docs/source/compliance.rst index fd4e0fd..0dfb30b 100644 --- a/docs/source/compliance.rst +++ b/docs/source/compliance.rst @@ -399,6 +399,54 @@ accomplishment of a clearly defined task but does not normally require that the party do anything him/herself. A person who carries out a contract for service may be considered a contract worker, a self-employed person or an independent contractor. +A business relationship is a verbal or written agreement in which a self-employed individual +agrees to perform specific work for a payer in return for payment. There is no employer or +employee. The self-employed individual generally does not have to carry out all or even part +of the work himself. In this type of business relationship, a contract for services exists. + +The self-employed individual is required to produce a given result within a period of time in +the manner he deems most appropriate. While performing the work, he is not under the +orders or control of the person for whom he is doing the work and he can use his own +initiative in matters that are not specified or determined at the outset. The payer is not +normally involved in the performance of the work and, therefore, has no control over it. + +Under a contract for service, a self-employed individual assumes the chance of profit and risk +of loss. By agreeing, before he is engaged, to establish the overall cost of the work to be +done, owning his tools and instruments and being solely responsible for the manner in which +the work is done, the self-employed individual assumes all risk of loss resulting from events +that occur during the course of the work which were not, or could not, be foreseen when the +contract was negotiated. If, on the other hand, the work is completed sooner or more easily +than expected, the contractor's profit will be greater. + +A contract for service is often used when an organization wishes to have work done which +does not fall within its usual scope of operations. The relationship between a payer and a +self-employed individual and that between an employer and their employees are sometimes +quite similar. The main difference between the two relationships is that, in a contract for +service, the party paying for the service is entitled to dictate what is to be done or what result +is to be achieved; whereas, in a contract of service, the employer is also entitled to stipulate +the manner in which the work is to be done. + +Under a contract for service, the person for whom the work is being done exercises general +supervision. He can and should see that the work is completed in accordance with the +agreement, but it is not up to him to give orders to the self-employed individual regarding the +manner in which the work is to be done. The mere fact that a self-employed individual +receives general instructions from the project manager concerning the work to be done does +not mean that he can be considered an employee. + +An employee-employer relationship is deemed to exist where the organization exercises, or +has the right to exercise, direct control over the individual. If the organization is unsure as to +whether or not a relationship exists, the Canada Revenue Agency (CRA) form Request for a +CPP/EI Ruling – Employee or Self-Employed? – CPT1 should be submitted to the CRA. A +sample of the CPT1 form is provided at the end of this section. + +Independent contractors or self-employed individuals are not considered employees of the +organization provided no employee-employer relationship exists. Persons who are truly selfemployed individuals will submit invoices and be paid through accounts payable. However, +the submission of an invoice to accounts payable is not sufficient to determine if the +individual is self-employed. + +Factors Determining the Type of Contract +~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ + Review Summary --------------