Working for free is illegal

[YYZSaabGuy]

I am quite astonished I need to spell this out in such excruciating detail. Let's go back to the wrong point that Timei claimed:

Technicaly you cannot be a contractor for a single client or you have to be employed.

The Court of Appeal disagrees with that. It accepts that there exists a class of contractor who works for a single client, and who is not employed.

The court's creation of the class of dependent contractor - someone who is a contractor but who works for a single client - contradicts Timei's point entirely.

And I'm equally astonished that you are somehow still missing the point. Yes, the Court of Appeal established the concept of a dependent contractor, so timel (not timei) is "wrong" on that narrow point. However: the Court of Appeal also pointed out, in the link you provided, that before an individual is ruled to be a dependent contractor, the two-step test is applied to determine whether the individual is an employee or a contractor, and that "most people are (and will remain) employees rather than contractors", again per your link.

Not that it matters, but since you're keeping score: timel is "wrong" on the narrower point, but certainly 100% correct on the broader and more important point. The one that will matter to the majority of the people reading this thread.

[photofly]

I worked 3 y. as a flight instructor (contractor erfff employed) and two years working as an independant flight instructor for private pilots. So I know what I'm talking about. If you know better let us know!

I take my flying advice from flight instructors, but I get my tax advice from my CPA, who takes the time to find out my individual and exact circumstances before answering the question. I suggest everyone else does likewise.

[timel]

Not that it matters, but since you're keeping score: timel is "wrong" on the narrower point, but certainly 100% correct on the broader and more important point. The one that will matter to the majority of the people reading this thread.

Yes I persist and sign since it's a pilot forum, and an instructor cannot be a contractor for a single client for multiple reason. Read the text from CRA published page 1.
But I can admit that some other work professions might have different situations for dependant worker.

[goldeneagle]

You are most correct my friend the Canadian Revenue Agency says that as a contractor you MUST show income from multiple sources to qualify,

I never had a problem, single source contractor, audited twice during the period I was working that way years ago. At the time, I filed as a sole proprieter. Business began with multiple small clients, then one of them (large foreign corporation) started sending more and more work my way, which was far more lucrative that that from other sources. I stopped looking for other clients, and focussed for a number of years completing the tasks from a single client. The sniff tests that we went thru to verify this relationship were pretty strait forward and went something like this:-

a) Worked out of my own office, using my own equipment, which I had purchased.
b) I worked on my own schedule, the only schedule input from the client, was delivery date
c) Revenue was 'per each' deliverables.
d) Client had no input as to when / where / who accomplished the work (other than delivery dates)
e) I was free to solicit jobs from other clients, it was my choice to focus on a single client over that period.

I had no problems with this relationship during audit (more than a decade past). GST filings were up to date, and my paperwork was in order with CPP and WCB etc. I do imagine this would be a tough sell tho for a flying instructor, working on a school provided schedule, using school provided aircraft.

But, if you are going to start quibbling about this as a flying instructor, there is a much bigger issue one needs to consider. As an employee, you benefit from the liability coverage of the employer. As a contractor, you are personally exposed to liability while doing the job you are contracted to do. Aside from all the extra paperwork for GST/HST filings etc, one best take a very good look at liability, and the cost of getting the type of coverage one should carry in that role. It only takes one little ooops to wipe out a lifetime of asset accumulation when working as an independant, without appropriate liability insurance.

Personally, I would never step into the front seat of an airplane, without an employer / employee relationship in place, so that liability falls under the employer policy.

[stopbar]

Sorry Goldeneagle I should have been more specific in my response that it was from the standpoint of an flight instructor working for an FTU.

I would assume from your post that you were incorporated as a business and you were smart enough to educate your self on what was required. So many of today's instructors can`t be bothered to look into this kind of required information (they blindly accept the info ``that all the instructors are contractors`` given by the ftu as that's the way its done).

Your liability comments ring so true with the simple use of the title contractor in your agreement with the ftu there is a lot of legal weight to that word that could be brought to bear if ``things went south``(ie bad accident).

[SeptRepair]

... there is a much bigger issue one needs to consider. As an employee, you benefit from the liability coverage of the employer. As a contractor, you are personally exposed to liability while doing the job you are contracted to do. Aside from all the extra paperwork for GST/HST filings etc, one best take a very good look at liability, and the cost of getting the type of coverage one should carry in that role. It only takes one little ooops to wipe out a lifetime of asset accumulation when working as an independant, without appropriate liability insurance.

A bit of a thread drift, but important to share anyways. I was recently turned down by my house insurance company for coverage renewal because I operated a home based business in the aviation industry as a contractor. I dont have liability insurance yet as it is quite expensive, (ya I know have an accident and see how expensive that is yada yada yada.) I explained that my house is just an office and phone, and all work is conducted away from home. My business is incorporated but still not good enough, they fear that if i were to ever be found liable and not have coverage, the next entity in line ( house insurer) would be sued and they dont want to be exposed to that risk. Of course if I purchase liability insurance they would then cover my house. Im like WTF? Long story short, I moved my business to a post office box and carry a cell phone now. I will not have business use of home deductions anymore. It is no longer a home based business. Of course I found a house insurance company ok with this arrangement and now have coverage again. Just a heads up to fellow contractors out there.

[Colonel Sanders]

You guys are funny about liability.

My software is running on 60 (last count) off-shore
drilling rigs. A single boo-boo with one rig could
run to $5B.

Anyone know where I could get $300B worth of
liability insurance?

[photofly]

To paraphrase an old joke: to incur liability to a plaintiff of $150k is very much your problem. To incur liability to a plaintiff of $150m is very much the plaintiff's problem.

[NeverBlue]

Yes I persist and sign since it's a pilot forum

??????????

Oh, I see, General = Pilot

....hmmm...

[Colonel Sanders]

[FenderManDan]

This funny and sad at the same time. I know many musos that fall for this trick. Kind of reminds me of pilots and that Toronto skydive ops.

The people will wake up when the money runs out. That guy that runs the skydive biz will start paying when nobody shows up to fly.

[efestian]

I'm curious to have a link about that. Maybe provinces have different legislations about it.
I did researches about beeing independant contractor never heard of that.

I have personally been a contractor for a single, federally regulated marine transportation company and had that challenged by the CRA and HRDC. They lost...and they would loose if it was a FTU as well (provided the FTU understood law as well and organised themselves properly). They would try to scare a person not educated on law ( and it is complicated), but provided you contract it properly it can be done. It boils down to who sets hours, who supplies equipment amongst other things.

To be clear, CRA and HRDC tries to make people capitulate by fear...even when they don't have the Regulation to back it up. As with CARs, always demand the code reference when challenged and be sure you have read the Act section before relying on forum posts to base your decisions in life.

[efestian]

I also love the irony. If FTUs are forced to pay FIs more money... that cost WILL be passed on to the students...who are the very pilots that are struggling due to the financing of an expensive road of licenses which leads them to low paying jobs.

Basically, how about PPLs and CPLs costing 50% more or even just 25%? Airlines will not raise wages. It will simply result in training becoming more expensive. CRA does not care about you. They care about the higher taxes from employees and more paid hours. Period.

[timel]

I also love the irony. If FTUs are forced to pay FIs more money... that cost WILL be passed on to the students...who are the very pilots that are struggling due to the financing of an expensive road of licenses which leads them to low paying jobs.

Basically, how about PPLs and CPLs costing 50% more or even just 25%? Airlines will not raise wages. It will simply result in training becoming more expensive. CRA does not care about you. They care about the higher taxes from employees and more paid hours. Period.

Most licences done by instructors are privates = peoples with money who want to learn flying.

People doing commercials, yes more expensive, and guess what after that they will have to pay back their debts with a 13000$ - 23000$ shitty pay that come with their instructor job, with many 0$/hours wondering around and waiting for jobs to come because they are contractor and good little devoted pilots.

Life expenses keep growing in Canada, fuel is more expensive, house prices grow, food prices grow.

FTUs have the means and can pay a base salaries for instructors to come by, wait, spend some fuel, do paperwork, take care of the airplanes..

You will be never paying enough for your instructors.

[CID]

When you talk labour laws, "aviation" is not automatically federal. There are plenty of aviation jobs that fall under provincial labour laws.

"Transportation" on the other hand is federal. I don't think anyone classifies an FTU as "transportation".

As far as working for free, it's stupid and disruptive IMHO. Unpaid internships and the like are aborrhant.

[efestian]

CRA is the animal with the teeth and who will be the ones that come after the FTU's and "contractors". Besides, the definitions that Provincial Labour Ministries use is the same as CRA. It matters not that they are transportation or not. CRA is a federal agency that nobody can run from. If you can have CRA rule you are a contractor, that is a precedent that every Provincial Labour Ministry could not overcome. This is why the "challenge" usually originates or is spearheaded by CRA. They have rules when it comes to contractors and they do not distinguish between industries although farminh does seem yo have very specific procedures. Having gone through the process of being singled out, I would not be scared of them if I were setting myslef up properly given what I understand about FIs and FTUs. Most people don't delve into the regs though and would cave.

[timel]

Efestian... I don't get what you want to say?

IMO instructors are better with salary conditions than contractors.
Base salary to be there and do tasks $$/hr
When you fly min : 27-32$/ hr (classe IV)
Ground teaching :20$/hr minimum
If the instructor cannot be given full time work than it should be allowed to get an other work and his flights should be accomodate with it.

I've known some instructor to be doing 35-40$/hr with international studients.
Indepedant instructor should charge between 50-75$/hr and if they are asking for less its because they are retards.



And like discussed in previous threads good luck with CRA justifiying your status of contractor with a ftu.
Why would you want to do that?

[efestian]

I was just responding to the comments on page 1. As someone that has personally gone through it.

I can say that there is no job on the planet that I would rather be an employee than a contractor in the eyes of CRA even if it had pensions and oter benefits. I would be ahead every time.

In the interest of trying not to threadjack, I'll bow out as there isnt much more for me to add.