compliance

docs/build/html/_sources/compliance.rst.txt

@@ -530,6 +530,108 @@ equipment.
 The relevance of the ownership of tools and equipment is in the size of the investment along
 with the cost of repair, replacement and insurance. 
 
+The worker is an employee when:
+
+  - The payer supplies most of the tools and equipment. 
+  - The payer retains the right of use over the tools and equipment provided to the worker.
+  - The worker supplies the tools and equipment and the payer reimburses the worker for their use
+
+The worker is a self-employed individual when:
+
+  - The worker provides the tools and equipment required and is responsible for the cost of repairs, insurance and maintenance and retains the right over the use of these assets.
+  - The worker supplies his or her own workspace, is responsible for the costs to maintain it, and does substantial work from that site.
+
+Subcontracting Work or Hiring Assistants
+~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
+
+As subcontracting work or hiring assistants can affect a worker's chance of profit or risk of loss, this can help determine the type of business relationship. 
+
+The worker is an employee when:
+
+  - The worker cannot hire helpers or assistants.
+  - The worker must perform the services personally.
+
+The worker is a self-employed individual when:
+
+  - The worker does not have to perform the service personally.
+  - They can hire another party to complete the work, without consulting with the payer.
+
+Financial Risk
+~~~~~~~~~~~~~~
+
+The CRA will examine if there are any fixed ongoing costs incurred by the worker or any
+expenses that are not reimbursed. Employers will usually reimburse employees for any
+expenses incurred in the performance of their job. Self-employed individuals can have
+financial risk and incur losses as they usually have ongoing monthly expenses whether or not
+work is being performed. Both employees and self-employed individuals may be reimbursed
+for business or travel expenses, however it is the expenses that are not reimbursed that are
+examined.
+
+The worker is an employee when:
+
+ - The worker is not usually responsible for any operating expenses.
+ - The worker is not financially liable if he or she does not fulfill the obligations of the contract.
+ - The payer determines and controls the method and amount of pay.
+
+The worker is a self-employed individual when:
+
+  - The worker is financially liable if he or she does not fulfill the obligations of the contract.
+  - The worker does not receive any protection or benefits from the payer.
+  - The worker hires helpers to assist and pays them.
+  - The worker advertises the services offered.
+
+Responsibility for Investment and Management
+~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
+
+If the worker is required to make an investment in order to provide the services, this is
+evidence that a business relationship may exist. Another factor indicating the existence of a
+contract for service is if the worker is responsible for making the business decisions that
+affect their profits or losses.
+
+The worker is an employee when:
+
+  - The worker has no capital investment in the business.
+  - The worker does not have a business presence.
+
+The worker is a self-employed individual when:
+
+  - The worker has capital investment, manages his or her staff, hires and pays individuals to help perform the work, and has established a business presence.
+
+Opportunity for Profit
+~~~~~~~~~~~~~~~~~~~~~~~~~
+
+A business relationship likely exists where the worker can realize a profit or incur a loss as
+this indicates the worker controls the business aspects of the services rendered. Selfemployed individuals have the ability to accept contracts as they wish. They can negotiate
+the rate for their work and can accept more than one contract at the same time. In order to
+carry out the terms and conditions of their contract, they often incur expenses which they
+must manage to increase their profit.
+
+Employees normally do not have a chance of profit or a risk of loss. While some employees
+who are paid by commission have an opportunity to increase their earnings based on their
+sales, this is not a profit as it is not an excess of income over expenses. As well, employees
+generally do not share in profits or suffer losses incurred by the business they work for.
+
+The CRA will look at the degree to which the worker can control their revenues and
+expenses. They will also look at the method of payment. Employees are typically guaranteed
+their earnings according to an established rate (hourly, daily, weekly, annual) and pay
+frequency. While self-employed individuals may be paid on an hourly basis, if they are paid
+a flat rate for the work performed, it generally indicates a business relationship, especially if
+they incur expenses while performing the services.
+
+The worker is an employee when:
+
+  - The worker is not in a position to realize a business profit or loss.
+  - The worker is entitled to benefit plans that are normally only offered to employees.
+
+The worker is a self-employed individual when:
+
+  - The worker is compensated by a flat fee.
+  - The worker can hire and pay a substitute.
+
+The worker is an employee when:
+
+The worker is a self-employed individual when:
+
 Review Summary
 --------------
 
@@ -585,7 +687,11 @@ Finally, the CRA assesses the extent to which the worker can control their reven
 Review Questions
 ----------------
 
-What is the primary objective of the payroll department? 
+What is the primary objective of the payroll department?
+
+    The primary objective of the payroll department is to pay employees accurately and
+    on time, in compliance with the legislative requirements for a full annual payroll
+    cycle.
 
 List four definitions of payroll. 
 
@@ -604,4 +710,21 @@ Indicate the jurisdiction the following employees fall under:
   - A uranium mining company
   - Canadian Broadcasting Corporation
   - A retail department store with locations in every province
-  - A chartered bank. 
+  - A chartered bank. 
+
+What is the difference between a contract of service and a contract for service? 
+
+What are the factors that the Canada Revenue Agency (CRA) considers when
+determining if a contract of service or a contract for service exists? 
+
+Please consider the following scenario.
+
+    You are a payroll professional working for a large manufacturing company. Your
+    organization has had many change initiatives over the last number of years including
+    three mergers and two large group terminations. Your company endorses the use of
+    consultants rather than growing the number of permanent employees.
+
+    Write a memo to your supervisor, who is the Chief Financial Officer of the company, to
+    explain why your role must coordinate with the Accounts Payable Department to ensure
+    that these payments are being handled correctly. Please prepare your answer in a separate
+    document. 

docs/build/html/compliance.html

@@ -520,6 +520,120 @@ require a major investment and costly maintenance, it usually indicates that the
 equipment.</p>
 <p>The relevance of the ownership of tools and equipment is in the size of the investment along
 with the cost of repair, replacement and insurance.</p>
+<p>The worker is an employee when:</p>
+<blockquote>
+<div><ul class="simple">
+<li><p>The payer supplies most of the tools and equipment.</p></li>
+<li><p>The payer retains the right of use over the tools and equipment provided to the worker.</p></li>
+<li><p>The worker supplies the tools and equipment and the payer reimburses the worker for their use</p></li>
+</ul>
+</div></blockquote>
+<p>The worker is a self-employed individual when:</p>
+<blockquote>
+<div><ul class="simple">
+<li><p>The worker provides the tools and equipment required and is responsible for the cost of repairs, insurance and maintenance and retains the right over the use of these assets.</p></li>
+<li><p>The worker supplies his or her own workspace, is responsible for the costs to maintain it, and does substantial work from that site.</p></li>
+</ul>
+</div></blockquote>
+</section>
+<section id="subcontracting-work-or-hiring-assistants">
+<h3><span class="section-number">4.6.6. </span>Subcontracting Work or Hiring Assistants<a class="headerlink" href="#subcontracting-work-or-hiring-assistants" title="Link to this heading">¶</a></h3>
+<p>As subcontracting work or hiring assistants can affect a worker’s chance of profit or risk of loss, this can help determine the type of business relationship.</p>
+<p>The worker is an employee when:</p>
+<blockquote>
+<div><ul class="simple">
+<li><p>The worker cannot hire helpers or assistants.</p></li>
+<li><p>The worker must perform the services personally.</p></li>
+</ul>
+</div></blockquote>
+<p>The worker is a self-employed individual when:</p>
+<blockquote>
+<div><ul class="simple">
+<li><p>The worker does not have to perform the service personally.</p></li>
+<li><p>They can hire another party to complete the work, without consulting with the payer.</p></li>
+</ul>
+</div></blockquote>
+</section>
+<section id="financial-risk">
+<h3><span class="section-number">4.6.7. </span>Financial Risk<a class="headerlink" href="#financial-risk" title="Link to this heading">¶</a></h3>
+<p>The CRA will examine if there are any fixed ongoing costs incurred by the worker or any
+expenses that are not reimbursed. Employers will usually reimburse employees for any
+expenses incurred in the performance of their job. Self-employed individuals can have
+financial risk and incur losses as they usually have ongoing monthly expenses whether or not
+work is being performed. Both employees and self-employed individuals may be reimbursed
+for business or travel expenses, however it is the expenses that are not reimbursed that are
+examined.</p>
+<p>The worker is an employee when:</p>
+<blockquote>
+<div><ul class="simple">
+<li><p>The worker is not usually responsible for any operating expenses.</p></li>
+<li><p>The worker is not financially liable if he or she does not fulfill the obligations of the contract.</p></li>
+<li><p>The payer determines and controls the method and amount of pay.</p></li>
+</ul>
+</div></blockquote>
+<p>The worker is a self-employed individual when:</p>
+<blockquote>
+<div><ul class="simple">
+<li><p>The worker is financially liable if he or she does not fulfill the obligations of the contract.</p></li>
+<li><p>The worker does not receive any protection or benefits from the payer.</p></li>
+<li><p>The worker hires helpers to assist and pays them.</p></li>
+<li><p>The worker advertises the services offered.</p></li>
+</ul>
+</div></blockquote>
+</section>
+<section id="responsibility-for-investment-and-management">
+<h3><span class="section-number">4.6.8. </span>Responsibility for Investment and Management<a class="headerlink" href="#responsibility-for-investment-and-management" title="Link to this heading">¶</a></h3>
+<p>If the worker is required to make an investment in order to provide the services, this is
+evidence that a business relationship may exist. Another factor indicating the existence of a
+contract for service is if the worker is responsible for making the business decisions that
+affect their profits or losses.</p>
+<p>The worker is an employee when:</p>
+<blockquote>
+<div><ul class="simple">
+<li><p>The worker has no capital investment in the business.</p></li>
+<li><p>The worker does not have a business presence.</p></li>
+</ul>
+</div></blockquote>
+<p>The worker is a self-employed individual when:</p>
+<blockquote>
+<div><ul class="simple">
+<li><p>The worker has capital investment, manages his or her staff, hires and pays individuals to help perform the work, and has established a business presence.</p></li>
+</ul>
+</div></blockquote>
+</section>
+<section id="opportunity-for-profit">
+<h3><span class="section-number">4.6.9. </span>Opportunity for Profit<a class="headerlink" href="#opportunity-for-profit" title="Link to this heading">¶</a></h3>
+<p>A business relationship likely exists where the worker can realize a profit or incur a loss as
+this indicates the worker controls the business aspects of the services rendered. Selfemployed individuals have the ability to accept contracts as they wish. They can negotiate
+the rate for their work and can accept more than one contract at the same time. In order to
+carry out the terms and conditions of their contract, they often incur expenses which they
+must manage to increase their profit.</p>
+<p>Employees normally do not have a chance of profit or a risk of loss. While some employees
+who are paid by commission have an opportunity to increase their earnings based on their
+sales, this is not a profit as it is not an excess of income over expenses. As well, employees
+generally do not share in profits or suffer losses incurred by the business they work for.</p>
+<p>The CRA will look at the degree to which the worker can control their revenues and
+expenses. They will also look at the method of payment. Employees are typically guaranteed
+their earnings according to an established rate (hourly, daily, weekly, annual) and pay
+frequency. While self-employed individuals may be paid on an hourly basis, if they are paid
+a flat rate for the work performed, it generally indicates a business relationship, especially if
+they incur expenses while performing the services.</p>
+<p>The worker is an employee when:</p>
+<blockquote>
+<div><ul class="simple">
+<li><p>The worker is not in a position to realize a business profit or loss.</p></li>
+<li><p>The worker is entitled to benefit plans that are normally only offered to employees.</p></li>
+</ul>
+</div></blockquote>
+<p>The worker is a self-employed individual when:</p>
+<blockquote>
+<div><ul class="simple">
+<li><p>The worker is compensated by a flat fee.</p></li>
+<li><p>The worker can hire and pay a substitute.</p></li>
+</ul>
+</div></blockquote>
+<p>The worker is an employee when:</p>
+<p>The worker is a self-employed individual when:</p>
 </section>
 </section>
 <section id="review-summary">
@@ -564,6 +678,11 @@ financial penalties or legal action may be imposed to enforce adherence and prom
 <section id="review-questions">
 <h2><span class="section-number">4.8. </span>Review Questions<a class="headerlink" href="#review-questions" title="Link to this heading">¶</a></h2>
 <p>What is the primary objective of the payroll department?</p>
+<blockquote>
+<div><p>The primary objective of the payroll department is to pay employees accurately and
+on time, in compliance with the legislative requirements for a full annual payroll
+cycle.</p>
+</div></blockquote>
 <p>List four definitions of payroll.</p>
 <p>List the three types of payroll management stakeholders and provide an example of each.</p>
 <p>Explain the difference between legislation and regulation.</p>
@@ -580,6 +699,20 @@ financial penalties or legal action may be imposed to enforce adherence and prom
 <li><p>A chartered bank.</p></li>
 </ul>
 </div></blockquote>
+<p>What is the difference between a contract of service and a contract for service?</p>
+<p>What are the factors that the Canada Revenue Agency (CRA) considers when
+determining if a contract of service or a contract for service exists?</p>
+<p>Please consider the following scenario.</p>
+<blockquote>
+<div><p>You are a payroll professional working for a large manufacturing company. Your
+organization has had many change initiatives over the last number of years including
+three mergers and two large group terminations. Your company endorses the use of
+consultants rather than growing the number of permanent employees.</p>
+<p>Write a memo to your supervisor, who is the Chief Financial Officer of the company, to
+explain why your role must coordinate with the Accounts Payable Department to ensure
+that these payments are being handled correctly. Please prepare your answer in a separate
+document.</p>
+</div></blockquote>
 </section>
 </section>
 
@@ -612,6 +745,10 @@ financial penalties or legal action may be imposed to enforce adherence and prom
 <li><a class="reference internal" href="#factors-determining-the-type-of-contract">4.6.3. Factors Determining the Type of Contract</a></li>
 <li><a class="reference internal" href="#control">4.6.4. Control</a></li>
 <li><a class="reference internal" href="#tools-and-equipment">4.6.5. Tools and Equipment</a></li>
+<li><a class="reference internal" href="#subcontracting-work-or-hiring-assistants">4.6.6. Subcontracting Work or Hiring Assistants</a></li>
+<li><a class="reference internal" href="#financial-risk">4.6.7. Financial Risk</a></li>
+<li><a class="reference internal" href="#responsibility-for-investment-and-management">4.6.8. Responsibility for Investment and Management</a></li>
+<li><a class="reference internal" href="#opportunity-for-profit">4.6.9. Opportunity for Profit</a></li>
 </ul>
 </li>
 <li><a class="reference internal" href="#review-summary">4.7. Review Summary</a></li>