Employee or Independent Contractor? A Medical Clinic Case
A July 22, 2026 Tax Court of Canada case examined whether an office administrator working for several chiropractic professional corporations was an employee or an independent contractor. CRA had assessed the payers for unremitted CPP and EI, arguing that the work was pensionable and insurable employment.
What Did the Parties Agree To?
The worker and clinics had a verbal independent-contractor arrangement. The administrator separately invoiced each corporation, and the clinics did not make source deductions, issue T4 slips or provide employee benefits. Both sides understood the distinction between employment and independent contracting and deliberately selected the latter.
How Did the Court Assess the Relationship?
The court emphasized that the parties' intentions matter, but labels alone cannot override the actual working relationship. It reviewed the usual factors:
- Control: The experienced administrator had limited supervision, discretion over how tasks were completed and considerable scheduling flexibility.
- Financial risk: She had little investment or financial exposure, which favoured employee status.
- Tools: The clinics provided premises, computers and phones, but confidentiality and security requirements explained that arrangement.
- Subcontracting: The administrator found replacements when necessary, but the clinics paid them directly, making this factor neutral.
Payers Win
The objective factors were mixed and inconclusive, but did not contradict the parties' informed and consistently implemented intention. The court found an independent-contractor relationship, and the payers were not liable for the assessed CPP and EI.
Action: Before work begins, clarify the intended relationship and ensure contracts, invoicing practices and day-to-day conduct are consistent with that status.