Save yourself some pain: collect Tslip data and secure consent for e-distribution upon contract

One of the most painful parts of Tslip season is tracking down any missing information for recipients (e.g. SIN, address, email address) so that you can submit their tslip to the CRA and distribute their copy by the February 28 deadline. 

This can be particularly difficult with T4A recipients who are engaged on a short-term basis,  or who are living elsewhere and not in regular communication with your organization. Sometimes contract workers don’t file their income taxes on an annual basis, and therefore do not feel the same sense of urgency in regards to receiving their T4A on time… but when they’re ready to catch up, they don’t want to be delayed! 

The best way to avoid the pain is to collect all the necessary data upon engagement of the individual. Consider making full name, SIN, phone number, address, and email address standard fields on a contract, letter of agreement, or other initiating document so that you are ready for T-slip season before you pay the individual. 

And, since e-distribution of T4As, T4ANRs, and T5s (as well as certain T4s - click here for more info) requires consent from the recipient, add another standard field on your contracts to allow each individual to confirm their email address and opt in to receiving their tslip via e-distribution. 

Taking a bit of extra care at the contracting phase will save you a lot of frustration when February rolls around.  
 

Employee or Self-Employed? HR story highlights hazards

Staff Post
By Heather Young

From time to time I will share stories from the field – names and details obscured!

One company went through a nerve-wracking time when a former worker – who had been hired on a fee-for-service contract as a freelance consultant – tried to claim EI and insisted to the folks at HRSDC that s/he had been an employee.

The government responded by notifying the company that they were responsible for remitting both the employer and the employee portions of EI and CPP for the duration of the contract. It was up to the company to appeal this decision, and prove that the worker had been properly treated as a freelancer.

To help the organization prepare its appeal, the government provided a lengthy questionnaire, much of it based on concepts you can read about in the CRA publication Employee or Self-employed?, published online.

The company also did some research, including checking the former worker’s social networking activities, where the individual clearly self-identified as a consultant for hire. It’s unclear whether that influenced the happy ending – but I can tell you that in at least one comparable case the defendant’s Facebook page did him in.

After many hours of work and months of waiting, the company finally received the happy news that their appeal was successful.

The CRA ruling made a strong effort to be balanced, stating that “the parties did not share a common intention as to the worker’s employment status” – although the company feels the status was always clear.  It outlined all the terms of employment in some detail, noting that the level of “control”, or supervision, of the employee and ownership of tools and equipment were neutral factors – they could have been interpreted to either party’s benefit. The fact that the worker was providing services personally and was not able to subcontract assigned work was deemed  consistent with the worker’s contention that s/he was an employee, but  the fact that the worker was free to take on other projects for personal profit, and promoted him/herself as a freelance communication consultant suggested to the CRA that s/he was “embarking on a business enterprise on his/her own account.”  Weighing all factors, the CRA ruled in the company’s favour: but in reading the written ruling, it looks like it was a close call.

Arts organizations and charities secure all sorts of services on part-time, part-year contracts. It’s worth the effort to research how a particular position should be treated (employee or self-employed?), and to be crystal-clear with the worker both verbally and in a written contract.