We’ve shared posts over the years about the importance of employment contracts, with written being better than verbal agreements.  These have gone through a number of legal challenges and the result is that they need to be written well (by lawyers is best), or they are tossed out in whole. 

Why does that matter?  Imagine having a sales rep with a non-compete clause, or something contrary to the ESA, the rest of the agreement could be ruled invalid.  This could lead to you paying up to 24 months severance + bonus ++ etc. rather than what was agreed to.

Although a written employment contract is not necessary in order for there to be an employment relationship, a written employment contract provides many benefits to employers. This article focuses on two types of clauses that typically benefit employers: Termination and layoff clauses…

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Very few Mainstay clients have employees being paid at the minimum wage, but those that do need to know that rate is increasing to $15.50 next week.  The Ministry of Labour sent a reminder today.  I’ve clipped it below for your reference.

Minimum wage is the lowest wage rate an employer can pay an employee. Minimum wage rates in Ontario will increase on October 1, 2022. The increase to the general minimum wage will be 50 cents, which will bring the new rate to $15.50 per hour.

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IF YOU USE, OR INTEND TO USE, INDEPENDENT CONTRACTORS – READ THIS

Many employers use “Independent Contractors”(IC) to perform services for the business.  This is not necessarily a problem if they are kept clearly at arms length (such as your once a week office cleaners).  The problem arises when they work; primarily for you, with tools you supply, when and how you instruct, then these IC’s can be deemed employees by CRA.  This can mean the “employee” loses all their deductions and the “employer” would be required to pay back taxes, withholdings etc.

Many insurance brokers have suggested that these people incorporate to protect the employer they work for, but that in itself does not help.  In fact, an incorporated business with up to 5 staff can be deemed a Personal Service Business (PSB) resulting in the highest tax rates and reducing the ability to write off most business expense.  As a result, this advice is not just potentially damaging, but it can be a difficult spot to “get out of”.

The article below alerts employers to the fact that CRA will be running a campaign in this area…

The Canada Revenue Agency is escalating their scrutiny of personal services businesses, and the consequences for breaching these tax rules can be severe. Find out what you need to know about the CRA’s campaign.

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