Determine the employment status

This guidance does not replace a formal request for a CPP/EI ruling.

Steps

Determine where the parties formed the contract

Canada has two systems of law: civil law in Quebec and common law in the other provinces or territories.

You must consider certain factors to determine if a worker is an employee or is self-employed.

These factors are different depending on the province or territory where the parties (worker and payer) formed the oral or written contract unless the contract states otherwise. If the parties are in a province or territory other than Quebec, common law applies. If they are in the province of Quebec, the Civil Code of Québec (CCQ) applies.

Generally, the contract is formed when and where the offeror gets the acceptance. In most cases, the offeror is the payer.

Example: Payer and worker are in the same province or territory
John (worker) is in Surrey, British Columbia, when he verbally agreed to work as a music teacher for a community school (payer) in Coquitlam, British Columbia. The parties formed the contract in British Columbia. Since the parties are in a province or territory other than Quebec, common law applies.

Example: Payer and worker are in different provinces or territories
Iman (worker) is an audiologist and she lives in Cornwall, Ontario. She applied to work for the clinic Bonne Entente (payer) in Montréal, Quebec. She had a virtual interview with the owner of the clinic who offered her a position. She then got an email with a written contract, which she signed and sent back to the payer by email. In this situation, the parties formed the contract in Quebec because this is where the payer (the offeror) was when they received the acceptance. Since the payer is in Quebec, the CCQ applies.

Example: Contract states under which law it should be interpreted
The contract can state that if the worker and payer disagree about the contents of the contract, the contract will be interpreted under Quebec law (CCQ), even though the parties formed the contract in Ontario (common law).
Examine approach to determine the employment status

You must consider different factors to determine a worker’s employment status, depending on where the parties formed the contract.

You will use a two-step approach based on common law principles and on jurisprudence if the parties formed the contract in a province or territory other than Quebec. You will use a three-step approach based on civil law if they formed the contract in Quebec.

Select the location where the parties formed the contract to get more information on the approach to use:
Review more guidance for specific professions that may apply to the situation

What to consider when determining if a worker is an employee or is self-employed in the following professions:
Make a determination

Based on all the guidance, determine if the worker is:
- An employee (employer-employee relationship)
- A self-employed worker (business relationship)
If you are unsure of the employment status (employee or self-employed), you can ask the CRA for a CPP/EI ruling to determine the status.