What Are They?
Independent contractor agreements under Ontario law are commercial contracts between your company and your service providers. Unlike employees, independent contractors are self employed, and contractor agreements in Ontario allow for a lot more flexibility in their terms than employment agreements. Independent contractors should be treated like other service providers, with the terms of their engagement negotiated between the parties. Since these contractors operate independently from your business, they should always maintain a level of control over the way in which they provide you with services, including when, how and where they will provide their services. Most independent contractors will also use their own equipment and tools (including their own computers).
For example, you might retain a graphic designer to provide some design work for your business. While you may provide specifications for the project (including a delivery deadline), as an independent contractor they will generally choose the hours they will work on the project, where they will work and use their own computer and other design tools.
Employees vs. Contractors
Unfortunately there’s no black and white distinction between employees and contractors, and simply calling somebody a contractor is not always enough. A contractor can be deemed by law to be an employee under certain circumstances regardless of what your contract says. Be sure to consult with an employment lawyer to be sure your contractors are properly classified.
In addition, your independent contractors may legally own the intellectual property in any work product that they create (including graphic design, web development, source code, etc.), and so depending on the type of work being provided, it may be critically important that your contractors agree that your business will own their work product, which can only be done with a proper independent contractor agreement under Ontario law.
Terms to Consider
Here are some terms to consider including in your contractor agreements:
- Fee structure.
- Expense reimbursement.
- Subcontracting to others.
- Type of services to be provided.
- Length of the agreement.
- Development of intellectual property.
We can prepare individual contractor agreements or provide you with a template to use for multiple contractors.