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ACTG 2P40 Study Guide - Independent Contractor, Vicarious Liability, Unemployment Benefits

6 Pages
115 Views
Fall 2012

Department
Accounting
Course Code
ACTG 2P40
Professor
P.Maloney

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Chapter 20
Employment Law
1. Employee vs. Independent Contractor
Employee
An employee is someone who works for a boss
Independent Contractor
An independent contractor does not have a boss, they do their own thing and do not take
orders from anybody
An independent contractor may be hired but do not take orders from the person that hires
them
An independent can funnel income tax like a corporation which has better tax breaks
The courts have certain test to figure out if employee or independent contractor
a) Where does the person work from?
if the person works at the same place everyday then they are most likely an employee, if
place varies everyday then an independent contractor.
b) Who pays the income tax withholding, CPP, EAI?
If the employer is paying it than it is a employee and employer relationship, if employer
paying it on their own than an independent contractor.
c) Do they have more than one own Client?
if they have many of their OWN clients than they are an independent contractor but if they
have same client or work with many of their employers clients (service) than they are an
employee.
d) Who pays the Expenses
An independent contractor pays for their own expenses but an employee does not pay an
expenses ( employer does )
e) Is there supervision of the work to how it is done?
Independent contractor does not get supervised but an employee does get supervised
f) Who supplies the tools to do the work?
Independent contractor supplies their own tools and employers are supplied by their
employer
The distinction between an independent contractor and an employee is also important
for the purposes to liability and responsibility of the employee.
2. Vicarious Liability: Employers Responsibility for
Employees Actions
The doctrine of „Vicarious Liability‟ provides that employers are liable for all the acts
committed by an employee which are committed during the course of an employee‟s
employment.
an independent contractor is liable for himself employer liable for employee‟s
“if committed during the course of employment”
break time, lunch time etc cause grey areas and have lead to different cases
the further away from the course of employment the less likely the employer may be held
liable for the employers actions
3. Protection of Employees
a) Workplace Safety and Insurance Benefits (WSIB)
For jobs that are considered dangerous and have high risk of safety such as high window
cleaning, construction etc
The government set up „WSIB‟ that requires employers to pay into as a fund higher
risk jobs require higher payments
For instance when an employee gets injured during the course of employment for these
dangerous jobs then the employee urns to the WSIB funds and can ask for
compensation
WSIB paid into by the employer
b) Employee Standards Act
The employee‟s standards act provides the standards for employees in ontario
Such as maximum hours to work, minimum wage, working conditions etc.
c) Human Rights Code
The human rights code protects employees from discrimination
Most problem feared by the employer
d) Employment Insurance (EI)
Employees pay into EI during employment and can apply for EI during times of
unemployment
e) Pay Equity

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Description
Chapter 20 Employment Law 1. Employee vs. Independent Contractor Employee  An employee is someone who works for a boss Independent Contractor  An independent contractor does not have a boss, they do their own thing and do not take orders from anybody  An independent contractor may be hired but do not take orders from the person that hires them  An independent can funnel income tax like a corporation – which has better tax breaks The courts have certain test to figure out if employee or independent contractor a) Where does the person work from?  if the person works at the same place everyday then they are most likely an employee, if place varies everyday then an independent contractor. b) Who pays the income tax withholding, CPP, EAI?  If the employer is paying it than it is a employee and employer relationship, if employer paying it on their own than an independent contractor. c) Do they have more than one own Client?  if they have many of their OWN clients than they are an independent contractor but if they have same client or work with many of their employers clients (service) than they are an employee. d) Who pays the Expenses  An independent contractor pays for their own expenses but an employee does not pay an expenses ( employer does ) e) Is there supervision of the work to how it is done?  Independent contractor does not get supervised but an employee does get supervised f) Who supplies the tools to do the work?  Independent contractor supplies their own tools and employers are supplied by their employer The distinction between an independent contractor and an employee is also important for the purposes to liability and responsibility of the employee. 2. Vicarious Liability: Employers Responsibility for Employees Actions  The doctrine of „Vicarious Liability‟ provides that employers are liable for all the acts committed by an employee which are committed during the course of an employee‟s employment.  an independent contractor is liable for himself – employer liable for employee‟s “if committed during the course of employment”  break time, lunch time etc cause grey areas and have lead to different cases  the further away from the course of employment the less likely the employer may be held liable for the employers actions 3. Protection of Employees a) Workplace Safety and Insurance Benefits (WSIB)  For jobs that are considered dangerous and have high risk of safety such as high window cleaning, construction etc  The government set up „WSIB‟ that requires employers to pay into as a fund – higher risk jobs require higher payments  For instance when an employee gets injured during the course of employment for these dangerous jobs – then the employee urns to the WSIB funds and can ask for compensation  WSIB paid into by the employer b) Employee Standards Act  The employee‟s standards act provides the standards for employees in ontario  Such as maximum hours to work, minimum wage, working conditions etc. c) Human Rights Code  The human rights code protects employees from discrimination  Most problem feared by the employer d) Employment Insurance (EI)  Employees pay into EI during employment and can apply for EI during times of unemployment e) Pay Equity  Pay equity just means that there is equal pay for equal jobs for all employees despite race, religion, sex, gender etc. 4. Rules Governing Termination of Employment a) Notice of Termination (ways you can fire someone) i) Termination for Cause  Termination for cause means that you are terminating an employee for a valid good legal reason There are 4 legal grounds you can terminate someone for cause 1) Incompetence – they just suck at job 2) Open or willful Disobedience  when the employee is not doing the job required to do 3) Chronic Illness, Disability, Lateness or Absents 4) Misconduct  The employee is dishonest or commits immoral misconduct  Such as a judge acting immoral outside of work These only reasons „For Cause‟ – cause does not mean adverse or economic situation – not cause  In cases of termination for cause – it is best to build up a file or case to make the reason for cause termination stronger – if not much of a case then the termination will not look strong ( 3-5 warnings is strong )  S
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