Nanny Contracts in Canada: Basic Employment Law Concepts

Nanny Contracts in Canada: Basic Employment Law Concepts


Welcome everyone, this is Amer Mushtaq from
You Counsel. Today, we’ll talk about Nanny Contracts
in Canada and we’ll explain some of the basic Employment Law concepts, so, that if
you are hiring or deciding to hire a nanny you have a basic understanding of what should
be contained in that contract with that nanny. And conversely, if you are a nanny looking
for an employment the concepts that we provide here are useful to you, so, you can understand
better your employment relationship with your employer. The concepts that we’re providing here are
very, very, basic, it gives you an overview of the relationship so you can understand
in the Employment Law contexts, and then based on that you can develop contracts accordingly. We will begin with the disclaimer that this
course is not legal advice, so, if you have any specific questions with respect to your
nanny issues or contracts you must contact a lawyer or another legal professional. So we’ll begin with the basic concept whether
a nanny is an employee or an independent contractor and what I want to explain here, is that the
two are different categories … you may know about them or you may not but employee and
an independent contractor are two very different categories. They have completely different rights, they
have completely different protections, and they have completely different tax treatment. So, you need to understand when you’re hiring
a nanny or being hired as a nanny, whether you are going to be an employee or whether
you are going to be an independent contractor. If you are an employee, then your rights are
all of the rights that are under Provincial Employment Legislation. Those rights come to you as a default. So, if you are the employer you are trying
to hire a nanny and you hire that nanny as your employee then all of their rights in
your specific Provincial Employment Legislation would apply. In the case of Ontario, the legislation is
Employment Standards Act 2000, and you can type that thing, that name, in Google and
you can find out that legislation and read that. It’s a quite extensive legislation, it talks
about all kinds of issues so it’s a bit of a complex piece of legislation, but at least
when you read it, you will get a sense of what are the kinds of rights that an employee
is entitled to. So, this legislation applies to all of the
employees, so, it’s not … there are no specific categories for nannies but it applies to every
single employee that works in Ontario. Some of the things that you will find in this
legislation will deal with the work hours, the scheduling, the break times, the free
breaks, the unpaid breaks, vacation, vacation pay, public holiday pay, overtime hours, sickness
pay, maternity leave, bereavement leave, all kinds of things that an employee is expected
to go through during his or her employment they are dealt with in that employment centers
legislation; and then those rights will be intact for the employee. With respect to independent contractors, an
independent contractor is not an employee. So, the relationship is really sort of a business
relationship and the rights of an independent contractor and the duties are what’s in the
contract. Whatever’s in the contract, that’s what is
upheld when, there is a dispute between the employer and the independent contractor. So, independent contractor has no protections
under the statutory legislation, Employment Standards Act 2000, doesn’t apply and any
of the other provincial legislation they don’t apply with respect to an independent contractor. Okay, so then the question becomes if you
are the employer can you choose, can you decide whether you want to hire somebody as an employee
or as an independent contractor? And the answer really is yes and no. The typical lawyer answer or the next answer
I can give you is it depends. And what it depends on is really on the nature
of the relationship that you establish with that nanny or if your nanny what kind of relationship
are you establishing with that family. And with respect to how do you decide whether
somebody is an employee or an independent contractor, we have a completely separate
video on this, and I will encourage you to check that out, so, you can understand the
difference between an employee and an independent contractor. But very, very, briefly and I would really
encourage you to review that video because that provides a fulsome answer. But very briefly, an independent contractor,
in other words, is sort of a separate business, and what that means is the person and it doesn’t
have to be a corporation, you could have an independent contractor relationship with an
individual too. So I’ll give you an example, when you hire
a plumber to come and fix your plumbing issues at your house that plumber is an independent
contractor. Why, because the plumber knows how to do his
job or her job, you don’t need to explain how to fix it, you don’t need to supervise
the plumber, you don’t need to control the hours that he or she will spend fixing that
problem. The plumber will bring his own tools, you
know his own equipment, and he may actually run to Home Depot to buy stuff for you, so,
all of these things indicate that the person is quite independent in the performance of
the duty. And then when the plumber is done with your
job, he may have another job lined up at some somewhere else, at somebody else’s house. So, what that means is the Plumber is not
financially dependent on you to make a living on a day-to-day basis. So, you don’t have significant control over
the plumber. So, that’s sort of an extreme example of an
independent contractor. But in nanny cases, you may have a relationship
with a nanny, where the nanny is very independent. So, for instance the nanny knows what time
to come to the house, and then when she comes over or he comes over, you hand over the kids
and then you’re gone. And the nanny decides, you know, what kind
of food the children are going to have today, what kind of clothes they are going to wear,
are they going to go to a park, or are they going to go to somewhere else and all of that. So, if the nanny has a lot of flexibility
and then maybe the nanny brings his or her own van and to take the kids around, so, that’s
bringing her own tools. Maybe she’s buying other stuff for the children
and gets reimbursed for those expenses. So, you can see how the relationship could
be quite independent and then the nanny maybe part time and maybe helping out other families
as well or maybe joint nanny for a few families. So, it could be an independent relationship
even though you have hired the nanny to come and do certain specific tasks. So, that’s what I mean by when I say the answer
is yes and no and it depends it really depends upon the nature of the relationship that you
are establishing. And what you want to know is that if you establish
the relationship, which is independent contractor, you want to make sure that the law recognizes
that relationship as an independent contractor. It’s not really up to you, it’s not really
up to parties, because a number of government institutions have some stakes in how people
are classified as an employee or as an independent contractor and the most obvious one is C.R.A.,
because when someone is an employee you as an employer deduct taxes and send it to C.R.A. Whereas if someone is an independent contractor
they are responsible for their own taxes. Similarly, Employment Insurance Legislation
with respect to an employee, if they work certain hours and they lose their job, they’re
entitled to employment insurance or if they get sick they may be entitled to employment
insurance, and similarly with respect to pregnancies and in other scenarios they may be entitled
to employment insurance. But as an independent contractor you’re not
entitled to any of those things, so that’s why you want to be careful in ‘A’, selecting
what kind of relationship you want and then also making sure that the relationship is
lawful. One thing you can do is obtain an advance
ruling from Canada Revenue Agency about your specific relationship and it’s not a complicated
process. You basically write down the specific duties
that that person, that nanny, will be providing to you and you figure out exactly how that
relationship is going to be structured, and then you send that structure to C.R.A. and
say we’re going to engage in this relationship … can you provide us a ruling whether this
relationship, would you treat this relationship as an employment employee-employer relationship
or would you accept the notation of independent contractor? And you can get that advance ruling and with
respect to C.R.A. matters you can you can rely on it. So, those are some of the things that you
want to keep in mind with respect to nanny contracts. Few things that I want you to take away from
this, is that it’s very important to have your contracts any contract, whether it’s
nanny contracts or general contractor work for your house you should have those in writing. A contract could be oral, you can agree to
things orally but as you can imagine, with oral contracts it comes down to who said what,
who remembers what, it becomes a he said, she said. But at least in written contracts there is
something in writing and it’s somewhat easier to identify what was agreed upon. So, always make sure that there are contracts
in writing. And also you want to make sure that whatever
you agreed to in those contracts, the contracts must be signed before the nanny commences
work. It cannot be that you have a nanny starting
already started working for you and then you create this contract and have him/her sign
that, you will have other problems with respect to the enforceability of that contract and
will have probably a separate lecture on that, but any agreements any contracts that you
signed with a nanny you must do so before you commence, before the nanny commences work
for you. So, hopefully this gives you a broader understanding
of what a nanny contract is and the differences between the employer-employee relationship
and an independent contractor relationship. We look forward to hearing from you about
any specific questions you may have with respect to these legal principles and then we’ll be
happy to keep building on this topic and provide more information. I quickly Googled online to see if there were
any nanny contracts and I noticed that there are few websites that may have some sample
nanny contracts that you can look at. But the basic idea is you need to understand
what kind of relationship you’re entering into and to make sure that relationship is
in writing and the relationship is lawful, and you understand completely what your rights
and obligations are with respect to that relationship. Hopefully we’ll hear from you and then please
look at our other video, so, you can get an understanding off the difference between an
independent contractor and an employee. Thanks for watching.

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