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How to Ensure Worker Classification Compliance

Posted by Ray Gonder


Mar 11, 2016 9:00:00 AM

How_to_Ensure_Worker_Classification_Compliance.jpgWe all want to ensure our businesses are compliant, following the letter and spirit of the law as best we can. That said, worker classification compliance comes with it's own set of problems—the Canadian Revenue Agency is continuously adding new policies and regulations, new systems for identification and has begun cracking down on businesses that aren't following those procedures. With so much change and so little time, how can businesses keep up?

Worker classification compliance was already a great challenge before a wave of new changes began to occur—finite differences between two classes of worker, often with overlap, made it challenging to tell the differences to begin with for some. Many companies simply made mistakes in their classification, only to find themselves in heaps of legal trouble later because of it. We know that classification is a critical issue, but in many cases it’s often easier said than done. Luckily, there are some ways to remain compliant, though some prove more difficult than others.

Research, Research, Research

The place to start is reading the Canadian Revenue Agency's strict guidelines about the differences between employees and contractors. If you're ever unsure which direction to head in, the guidelines are a great primer and offer a lot of broad advice. Of course, that brings about another problem. For those who have already grasped the broad advice and are now searching for more specific definitions to ensure worker classification compliance, the task can be a bit trickier.

Some businesses have had success perusing legal blogs that discuss business laws. These blogs tend to offer their own opinions and advice, as well as help translating some of the denser material more plainly. By the same token, there are legal libraries and resources available not just through the government's website, but across the web as well. However, as with much of the information we read online, it's best to take it with a grain of salt and seek out alternative perspectives.

Many large businesses are able to hire full legal teams to help them sort issues out, or can afford expensive training for their human resources and payroll departments to ensure that everyone is up to speed. It's not a bad option—just one that isn't always viable for everyone. Small businesses and startups often have worker classification compliance to consider as well, but lack the resources to tackle the problem head on. That's where a professional employer organization can come in handy.

Consult a PEO

Especially in an era where independent contractors are used more frequently, it's no surprise that many companies are running into classification issues. This is one of the reasons professional employer organizations (PEOs) are becoming so prominent. As experts in not just worker classification compliance, but labour laws, payroll regulations, and more, they're constantly staying up-to-date on any changes or adjustments, no matter how minute. This means they're a step ahead of almost all other industries. Regardless of the province, territory, or region you're working within, they know what you need in order to remain complaint and can provide it easily, helping you and your team understand it along the way.

When you partner with a PEO, you get a legal mind with a specific expertise in employee and employer relations—one who understands your budget and your needs, but will never sacrifice compliance to meet them. While companies maintain full oversight, PEOs take care of the most frustrating compliance issues on their behalf. That means more time focusing on operations and less time focusing on legality.

What Are You Leaving to Chance by Handling Payroll on Your Own


Topics: Worker classification compliance

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