Contract Job Experience confusion

[stevejk]

Hello Guys,

I worked at HP through a company called OTSI, who hired me and provided me with an offer letter where it mentioned I was an Independent Contractor. However, I worked at the HP location and used their equipment for work. When doing my taxes my accountant said I was self employed, I did not receive any T4 and was paid gross salary without any CPP or EI deductions. I worked 10 months and did not receive any points for that because I checked the self employed box in the EE profile.

My question is if I use the "Request for a ruling as to the status of a worker under Canada pension plan and/or the employment insurance act" how long does it take for them to get back to me. Also should I uncheck the self employed box, as on my reference letter(I switched jobs), they mention I was a full time employee of the agency working for an annual salary. However, I was paid gross salary without any CPP or EI deductions.

In regards to your questions all I would say is get a ruling from the CRA and proceed from there, rather than editing what you currently have. I'm hoping for a swift response, but am highly doubtful. Everything government related seems to take weeks. I have applied online through the My Business portal, which is documented on the PDF form.

 

[confused1988]

In regards to your questions all I would say is get a ruling from the CRA and proceed from there, rather than editing what you currently have. I'm hoping for a swift response, but am highly doubtful. Everything government related seems to take weeks. I have applied online through the My Business portal, which is documented on the PDF form.

I talked with my accountant, but she is saying I am self employed as my employer did not deduct any CPP or EI contribution and did not provide me with a T4. I just have 7 weeks left on my Work Permit, and at 440 Points. This is indeed turning into a nightmare.

 

[stevejk]

I talked with my accountant, but she is saying I am self employed as my employer did not deduct any CPP or EI contribution and did not provide me with a T4. I just have 7 weeks left on my Work Permit, and at 440 Points. This is indeed turning into a nightmare.

I ended up leaving Canada at the end of my second year IEC visa, in June, because of it. I knew I wouldn't gain enough points to get picked out so ran out of options, so I feel your pain completely. If it's any help I have copied an excerpt below from my original question to my accountant, and their response. It may be worth questioning what your accountant has told you?


Original question:
"....you mentioned that my corporation was essentially an employee of *******. Currently I am facing a potential obstacle with applying to return to Canada, as the immigration department would likely judge my Canadian work experience (which is a factor I would require to gain points for a visa) to be of a self-employed nature. I may well need to apply for a ruling from the CRA on whether I was deemed to be “Self-employed” or not. Considering the nature of my services to *******, and that they were my sole employer for the duration of my time in Canada, do you feel I would be deemed to be self-employed by the CRA? "


Accountants' Response:
"The position of the immigration department seems unfair and possibly incorrect. In the eyes of the tax department, you were an employee of ******* through your corporation. You and your corporation were deprived of all of the tax benefits usually available to self-employed contractors. Your personal and corporate tax returns would support this argument. I'm not sure you would even need a ruling from CRA as the income tax act is pretty clear regarding this type of relationship."

 

[Dilbert]

I ended up leaving Canada at the end of my second year IEC visa, in June, because of it. I knew I wouldn't gain enough points to get picked out so ran out of options, so I feel your pain completely. If it's any help I have copied an excerpt below from my original question to my accountant, and their response. It may be worth questioning what your accountant has told you?


Original question:
"....you mentioned that my corporation was essentially an employee of *******. Currently I am facing a potential obstacle with applying to return to Canada, as the immigration department would likely judge my Canadian work experience (which is a factor I would require to gain points for a visa) to be of a self-employed nature. I may well need to apply for a ruling from the CRA on whether I was deemed to be “Self-employed” or not. Considering the nature of my services to *******, and that they were my sole employer for the duration of my time in Canada, do you feel I would be deemed to be self-employed by the CRA? "


Accountants' Response:
"The position of the immigration department seems unfair and possibly incorrect. In the eyes of the tax department, you were an employee of ******* through your corporation. You and your corporation were deprived of all of the tax benefits usually available to self-employed contractors. Your personal and corporate tax returns would support this argument. I'm not sure you would even need a ruling from CRA as the income tax act is pretty clear regarding this type of relationship."

Thanks for the info Steve. Yes, I am well aware that the CIC agents might rule out my exp, I am willing to take that risk at the moment. Even if they rule out the exp i still have 1 yr exp on payroll which qualifies me for CEC. I did look up some time ago regarding the CRA ruling but never followed up. I'll check with one of the immigration consultants who i know work for PWC regarding CRA ruling and how long it takes and how efficient is the whole process. Will post info when i have it.

 

[stevejk]

@ Dilbert

Thanks, that would be hugely appreciated! It's comforting to hear that there are others in this situation too - I was starting to believe I was the only one. I have applied online for the CRA ruling, but am going to follow this up via post too, as I've had no confirmation this was received.

 

[Dilbert]

@ Dilbert

Thanks, that would be hugely appreciated! It's comforting to hear that there are others in this situation too - I was starting to believe I was the only one. I have applied online for the CRA ruling, but am going to follow this up via post too, as I've had no confirmation this was received.

Anytime bud, always happy to share experiences if it helps others. Anyhow, take a look at this link http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-e.html#time_limit

According to this the CPP/EI ruling to the CRA needs to be done before June 30 for the year before. I am not sure when you applied for ruling, but look into it. Also I called up CRA this morning and CRA ruling is charged around 100~150$/hr ., again this is a grey area as the ruling would only deduce if the employee is CPP/EI insurable which is not what we are looking for in our case. What we basically want is an official written documentation to conclude that even though we have a registered business and pay our own taxes we come under the "employer-Employee relationship" and it concluded as "contract-of-Service".. The CRA ruling does not give us such a document as they ask us to refer to document RC4110 which is basically the link above. So, we are in Limbo here.

I did read this document before filing up EE profile and to the best of my knowledge I maintain my status as "employer-employee" and hence decided not to choose the "self-Employed" option. The CRA call centre is clueless about our situation, all they do is refer us to forms and links online. there is no direct contact info I can call/email the rulings department.

It's a mix between CRA, CIC and HRSDC and each one of them is clueless about the other let alone an expertise in their own dept/org. It's a mess. If your lawyer/accountant gets back to you regarding the ruling in time, lemme know.

 

[$unn¥123]

NOC-2281 for my work experience...i Need to know how can u differentiate roles and responsibilities in ur own wording from given wording in NOC??? Could anyone help??

 

[Dilbert]

Anytime bud, always happy to share experiences if it helps others. Anyhow, take a look at this link http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-e.html#time_limit

According to this the CPP/EI ruling to the CRA needs to be done before June 30 for the year before. I am not sure when you applied for ruling, but look into it. Also I called up CRA this morning and CRA ruling is charged around 100~150$/hr ., again this is a grey area as the ruling would only deduce if the employee is CPP/EI insurable which is not what we are looking for in our case. What we basically want is an official written documentation to conclude that even though we have a registered business and pay our own taxes we come under the "employer-Employee relationship" and it concluded as "contract-of-Service".. The CRA ruling does not give us such a document as they ask us to refer to document RC4110 which is basically the link above. So, we are in Limbo here.

I did read this document before filing up EE profile and to the best of my knowledge I maintain my status as "employer-employee" and hence decided not to choose the "self-Employed" option. The CRA call centre is clueless about our situation, all they do is refer us to forms and links online. there is no direct contact info I can call/email the rulings department.

It's a mix between CRA, CIC and HRSDC and each one of them is clueless about the other let alone an expertise in their own dept/org. It's a mess. If your lawyer/accountant gets back to you regarding the ruling in time, lemme know.

Check this link out aswell if you are an IT consultant: http://www.cra-arc.gc.ca/tx/hm/xplnd/itc-eng.html

 

[Dilbert]

NOC-2281 for my work experience...i Need to know how can u differentiate roles and responsibilities in ur own wording from given wording in NOC??? Could anyone help??

Wrong thread. This forum thread is regarding contract job experience, your question does not fall under this category. Please either post in a different relevant thread or open a new thread altogether.
thnx

 

[pziegler1986]

@ stevejk

I wasn't actually incorporated - I had registered with the CRA for HST/GST purposes as a sole proprietor.

Originally my CRS was 514 points, I received an ITA mid-March on that basis but then after more research I realised (to my dismay) that my work experience in Canada would be considered 'self-employed' so I declined my original ITA and checked 'Self-Employed' all all my various experiences listed out in the Employment History section of my EE profile which deducted the 40 points I previously received and disqualified me from the CEC stream.

As I am an Accountant myself, I knew that, technically speaking, I could have pushed to have my experience classified as a deemed 'employee' - the CRA has two definitions named 'contract for services' or 'contract of service' of which the latter a lot of people would find themselves classified as.

I'm assuming most people are assigned their roles through temp/recruitment agencies? The CRA has a special ruling for this arrangement ('temporary help services') whereby they are required to deduct CPP/EI from our pay but are NOT required to deduct income tax for which we are responsible. In my case as I worked for the client for > 1 year I'm 99% certain I would have been a deemed employee of my recruitment agency due to the common law tests applied by the CRA despite my written contract stipulating the services performed were to be in the relationship as an 'independent contractor'.

As an aside, my recruitment agency was quite helpful and despite the contract stipulating otherwise, were willing to support my application for PR by claiming that I was a deemed employee, however as my CRS score was high enough to get an ITA - it didn't need to come to that. I also received a 'Record of Employment' which would have given me access to EI.

 

[stevejk]

Anytime bud, always happy to share experiences if it helps others. Anyhow, take a look at this link http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-e.html#time_limit

According to this the CPP/EI ruling to the CRA needs to be done before June 30 for the year before. I am not sure when you applied for ruling, but look into it. Also I called up CRA this morning and CRA ruling is charged around 100~150$/hr ., again this is a grey area as the ruling would only deduce if the employee is CPP/EI insurable which is not what we are looking for in our case. What we basically want is an official written documentation to conclude that even though we have a registered business and pay our own taxes we come under the "employer-Employee relationship" and it concluded as "contract-of-Service".. The CRA ruling does not give us such a document as they ask us to refer to document RC4110 which is basically the link above. So, we are in Limbo here.

I did read this document before filing up EE profile and to the best of my knowledge I maintain my status as "employer-employee" and hence decided not to choose the "self-Employed" option. The CRA call centre is clueless about our situation, all they do is refer us to forms and links online. there is no direct contact info I can call/email the rulings department.

It's a mix between CRA, CIC and HRSDC and each one of them is clueless about the other let alone an expertise in their own dept/org. It's a mess. If your lawyer/accountant gets back to you regarding the ruling in time, lemme know.

@Dilbert

Thanks for all the info, massively appreciated. I was a IT contractor yes; a web developer. Having read that link, my situation was exactly as described under "Example of an employee".

So the issue now is that there is basically not a clear ruling that the CRA will issue, which states our status as a worker?

The form I have submitted is the "REQUEST FOR A RULING AS TO THE STATUS OF A WORKER UNDER THE CANADA PENSION PLAN AND/OR THE EMPLOYMENT INSURANCE ACT". I'm hoping that if I get anything back from this, then this alone will be enough to prove my status to any immigration official. But even with a positive CRA ruling, it is yet to be seen if this would definitely have the desired effect of proving the Canadian experience counts.

Again, issue I'm having is that I fall just short of the seemingly 450-ish point threshold, if I don't have my Canadian experience counted. And considering the costs associated with submitting an EE profile (£45 UK Police Check + £150 IELTS English test + £140 icas canada education assessment, so a total = £335 / $685), I’m not prepared to spend all that money when it looks very certain I won’t ever obtain enough points to ever get picked out of the pool. Having used the online points calculators I fall into the 430 point region without these experience points (the ITA draws have obviously never gone this low), and into the 470-480 points region with them (very like to get picked). So I’m currently in a corner, until I can hopefully obtain some way to prove that my Canadian experience was not self-employed, and I can therefore gain the necessary points.

I have just today filled out the same form and printed it, as I plan to post this with copies of my employment contracts, in addition to already having submitted the CRA form online.

 

[stevejk]

@ stevejk

I wasn't actually incorporated - I had registered with the CRA for HST/GST purposes as a sole proprietor.

Originally my CRS was 514 points, I received an ITA mid-March on that basis but then after more research I realised (to my dismay) that my work experience in Canada would be considered 'self-employed' so I declined my original ITA and checked 'Self-Employed' all all my various experiences listed out in the Employment History section of my EE profile which deducted the 40 points I previously received and disqualified me from the CEC stream.

As I am an Accountant myself, I knew that, technically speaking, I could have pushed to have my experience classified as a deemed 'employee' - the CRA has two definitions named 'contract for services' or 'contract of service' of which the latter a lot of people would find themselves classified as.

I'm assuming most people are assigned their roles through temp/recruitment agencies? The CRA has a special ruling for this arrangement ('temporary help services') whereby they are required to deduct CPP/EI from our pay but are NOT required to deduct income tax for which we are responsible. In my case as I worked for the client for > 1 year I'm 99% certain I would have been a deemed employee of my recruitment agency due to the common law tests applied by the CRA despite my written contract stipulating the services performed were to be in the relationship as an 'independent contractor'.

As an aside, my recruitment agency was quite helpful and despite the contract stipulating otherwise, were willing to support my application for PR by claiming that I was a deemed employee, however as my CRS score was high enough to get an ITA - it didn't need to come to that. I also received a 'Record of Employment' which would have given me access to EI.

@pziegler1986

Thanks for the clarification, and happy to hear you managed to get an ITA anyway, regardless of this issue.

As I outlined before, I didn't have any deductions at all, but I worked solely full time for one employer (via a recruitment agency) working at their premises and using their equipment. I have my own business number, and GST/HST numbers - paying my own monthly GST, yearly tax, etc. However because of this setup my accountant has advised I was actually a Personal Service Business, and technically an employee of the corporation I worked at. And the links (http://www.cra-arc.gc.ca/tx/hm/xplnd/itc-eng.html) seem to agree with this too. The issue now, as outlined in the previous post, is getting some kind of document from the CRA that actually proves this…

 

[pziegler1986]

@ stevejk

I could be wrong but I would argue you were the deemed 'employee' of your recruitment agency, not the client you were working for.

Your temp help agency is effectively sub-contracting you out to their clients. Follow the money trail I always say - the client pays your agency who in turn pays you -> I'm assuming the agency was withholding CPP/EI from your pay?

 

[stevejk]

@ stevejk

I could be wrong but I would argue you were the deemed 'employee' of your recruitment agency, not the client you were working for.

Your temp help agency is effectively sub-contracting you out to their clients. Follow the money trail I always say - the client pays your agency who in turn pays you -> I'm assuming the agency was withholding CPP/EI from your pay?

@pziegler1986

My accountant actually deemed me to be an employee of the client I worked for, not the agency. The agency didn't withhold any pay, as I was paid everything and had to pay my own taxes, GST, etc. I never paid any CPP or EI. But the argument on me being an employee of the client is that I was a Personal Service Business - working at their location, on their equipment, etc.

The following excerpt from http://www.cra-arc.gc.ca/tx/hm/xplnd/itc-eng.html sums up my position exactly:


Example of an employee

The payer requires the IT consultant to provide their services at the payer’s place of business (or other location where their mandatory presence is required) using some of the payer’s equipment. The payer may also require that the IT consultant work as part of a team, follow a certain work schedule, be available at certain times, ask permission to be absent or to take vacation, and have their hours monitored through the use of time sheets or a punch clock. The payer may require that the IT consultant work at the same time and in the same location as the payer’s employees. These facts would support the conclusion that the worker is an employee. When looking at the total relationship of the parties, it is reasonable to conclude that the payer monitors, directs, or controls or has the right to monitor, direct, or control how the worker does the work (whether the payer exercises this right or not).



Thanks

 

[Dilbert]

@ pziegler1986

My accountant actually deemed me to be an employee of the client I worked for, not the agency. The agency didn't withhold any pay, as I was paid everything and had to pay my own taxes, GST, etc. I never paid any CPP or EI. But the argument on me being an employee of the client is that I was a Personal Service Business - working at their location, on their equipment, etc.

The following excerpt from http://www.cra-arc.gc.ca/tx/hm/xplnd/itc-eng.html sums up my position exactly:


Example of an employee

The payer requires the IT consultant to provide their services at the payer's place of business (or other location where their mandatory presence is required) using some of the payer's equipment. The payer may also require that the IT consultant work as part of a team, follow a certain work schedule, be available at certain times, ask permission to be absent or to take vacation, and have their hours monitored through the use of time sheets or a punch clock. The payer may require that the IT consultant work at the same time and in the same location as the payer's employees. These facts would support the conclusion that the worker is an employee. When looking at the total relationship of the parties, it is reasonable to conclude that the payer monitors, directs, or controls or has the right to monitor, direct, or control how the worker does the work (whether the payer exercises this right or not).



Thanks

One is deemed to be the Employee even for the agency as long as it satisfies the "contract-of-service" criteria. The link http://www.cra-arc.gc.ca/tx/hm/xplnd/itc-eng.html and http://www.cra-arc.gc.ca/tx/hm/xplnd/plcmnt-eng.html (placement agency) both share the same info.

I just wanted to point out another thing that when we digitally sign off on the information that we are providing, it clearly stats that "it is to the best of our knowledge" and to the best of my knowledge "I deem myself to be an employee and not self-employed"