THE CASE FOR HIRING INDEPENDENT CONTRACTORS

"Independent contractors - a rapidly growing piece of the workforce - can often achieve the best quality of life. They can choose from where they work, whom they work for and for how long." -- Maynard Webb

WHY SHOULD STRATA CORPORATIONS PREFER TRUE INDEPENDENT CONTRACTORS?

In most cases, strata corporations are better served by engaging bonafide and properly managed independent contractors rather than informally creating employment relationships. This is not because employees are improper or unlawful. Strata corporations may employ staff where appropriate. The issue is that employing staff brings legal and administrative obligations that many strata corporations are not set up to manage.

Independent contractors are often preferable because:

• They operate their own business.

• They provide their own insurance.

• They may provide their own tools, equipment, staff, and supervision.

• They are responsible for their own payroll, taxes, and employment obligations.

• They can often be replaced more easily if performance is poor.

• heir obligations can be defined by contract, scope of work, service standards, and termination provisions.

This is especially important for self-managed strata corporations, where councils may not have the systems, expertise, or appetite to manage payroll, employment standards, performance management, workplace safety obligations, and termination risk.

WHAT ARE THE STATUTORY NOTICE REQUIREMENTS FOR EMPLOYEES?

The Termination Risk is on of the biggest risks of any strata having an employee.  Employees in British Columbia are entitled to minimum termination notice or pay under the Employment Standards Act, unless an exception applies. The Province explains that an employer may end employment by giving written working notice, pay in lieu of notice, or a combination of both.

The statutory minimum compensation for length of service generally increases with the employee’s length of employment. The Province’s interpretation guidance states that, after three consecutive months of employment, an employee is entitled to compensation for length of service if the employer terminates the employment, with the amount increasing as service increases.

In general terms, the statutory minimums are:

• After 3 consecutive months – 1 week.

• After 12 consecutive months – 2 weeks.

• After 3 consecutive years – 3 weeks,

• 1 additional week for each additional year of employment, to a maximum of 8 weeks.

These are minimum statutory standards only. They do not necessarily represent the full amount an employee may be owed.

WHAT ARE COMMON LAW NOTICE REQUIREMENTS?

In addition to statutory notice, employees may be entitled to common law reasonable notice unless there is an enforceable employment agreement limiting notice to statutory minimums or another lawful amount.

Common law notice is assessed using the factors from Bardal v. Globe & Mail Ltd., which include the character of employment, length of service, age of the employee, and availability of similar employment.

Common law notice can be significantly greater than the statutory minimums. This is one of the main reasons misclassification can be so expensive. A strata corporation may believe it has ended a contractor agreement on 30 days’ notice, only to face an argument that the person was actually a long-service employee entitled to months of reasonable notice.

This is particularly important where the person has worked for the strata corporation for many years, is older, has specialized or site-specific duties, or may have difficulty finding comparable work.

WHAT SHOULD A STRATA CORPORATION DO WHEN HIRING SERVICE PROVIDERS?

A strata corporation should structure service relationships carefully from the outset. The goal is not to use magic words. The goal is to create a relationship that actually operates like an independent contractor relationship.

A strata corporation should consider the following:

• Use a written contractor agreement.

• Require the contractor to be incorporated or operating under a business name where appropriate.

• Require the contractor to provide invoices.

• Require proof of commercial general liability insurance.

• Require proof of WorkSafeBC coverage or clearance where applicable.

• Avoid fixed employee-like schedules unless necessary.

• Avoid directing the minute-by-minute performance of the work.

• Focus on deliverables, standards, and outcomes.

• Permit the contractor to use its own workers or substitutes, where appropriate.

• Avoid providing tools, uniforms, phones, vehicles, or equipment unless necessary.

• Ensure the contractor has other clients or is genuinely free to work for others.

• Include a clear termination clause.

• Review long-standing “contractor” arrangements before ending them.

WorkSafeBC recommends obtaining clearance letters before and after receiving services from subcontractors to protect against potential liability for unpaid premiums, and its clearance letter confirms whether the contractor is registered and paying premiums as required.

PRACTICAL IMPLICATIONS FOR STRATA COUNCILS

For strata councils, the practical lesson is the same one that appears throughout strata law: good governance requires process, evidence, and reasonableness. The attached Fundamentals articles repeatedly use a question-based, practical approach focused on reasonableness, proper evidence, and careful decision-making in strata governance.

Before hiring a person to provide services, the strata council should ask:

• Are we hiring a business or an individual worker?

• Who controls how the work is performed?

• Who provides the tools and equipment?

• Does the person work for other clients?

• Can the person hire others to perform the work?

• Is the person exposed to profit or loss?

• Do we have a written agreement?

• Do we have insurance and WorkSafeBC clearance?

• Are we accidentally creating an employment relationship?

BEWARE OF RESIDENT CARETAKERS

Strata corporations should exercise significant care when entering into informal arrangements involving residents. A resident who is “just helping out” with gardening, cleaning, caretaking, snow removal, or minor maintenance may slowly become a worker whose legal status is unclear. Those arrangements are often attractive because they are convenient and inexpensive. Unfortunately, convenience is not a legal classification.

The Employment Standards Act operates to make most resident caretakers employees, not independent contractors.  Under the Employment Standard Regulations, where a caretaker lives in a strata titled building and performs regular duties such as cleaning, minor maintenance, inspections, garbage/recycling, responding to resident issues, or monitoring the property they can be deemed to be employees and as such, the strata corporation must comply with the Employment Standards Act and the Employment Standards Regulation, including the special minimum wage rules for resident caretakers.

As of June 1, 2025, the minimum wage for a resident caretaker is $1,069.36 per month plus $42.84 for each residential suite in buildings with 9 to 60 suites, and $3,642.51 per month for buildings with 61 or more suites. The general hourly minimum wage does not apply to resident caretakers in the same way because they have their own prescribed monthly minimum wage.

CONCLUSION ON EMPLOYEES AND INDEPENDENT CONTRACTORS

The safest approach is not to avoid all workers. The safest approach is to be deliberate. If a strata corporation wants an employee, it should hire one properly, with an employment agreement and payroll systems in place. If a strata corporation wants an independent contractor, it should retain a genuine business, use a proper contractor agreement, obtain insurance and WorkSafeBC clearance, avoid employee-like control, and ensure the relationship operates in substance as an independent contractor relationship.

In short, strata corporations should not accidentally become employers. They should know who they are hiring, document the relationship properly, and manage the relationship consistently with the legal status they intend to create.