Contractor or Employee? Start With What You Want for Your Group Practice

If you've spent any time in my Facebook group, you know this question comes up constantly. How do I ensure my associate is truly a contractor?

And then…

Can I ask my contractor to be more consistent with their days off?

Can I ask them not to work at another practice?

What can I do if they leave and take clients with them?

And recently, an owner shared that WorkSafeBC had decided her associate wasn't an independent contractor at all, but a worker of her business.

Most of the time, we start with the question "What am I allowed to do?" I want to suggest starting somewhere else... "What do I want?"

A quick note before we dive in... I'm not a lawyer, and this isn't legal advice. Employment and tax rules vary by province, and the details of your situation matter.

Start With What You Want

Before you choose a structure, get clear on the route you want to take as the owner of this business. How much consistency do you need from the people on your team? Do you want to set schedules, list everyone on your website, provide training and have people show up to team meetings? Or do you want a group of independent clinicians sharing space and support while they run their own practices?

And then be just as clear about the expectations you have of yourself. What will you provide... referrals, admin support, space, systems, community? What are you prepared to take on if someone is your employee, like payroll, vacation pay and notice when the relationship ends?

There's not just one right answer here. There are so many individual ways to run a group practice, and each of these structures can work well. The trouble starts when what you want and the structure you've chosen don't match.

The Label Doesn't Decide It

This is the part that surprises a lot of owners. Calling someone a contractor in your agreement doesn't make them one. Courts look at how the relationship works day to day, not just what the contract says.¹ ²

The Supreme Court of Canada has said there's no universal test, and that the central question is whether the person is doing the work as a person in business on their own account.³ The BC government puts it more simply... whose business is it?⁴ The factors that come up again and again include who controls the schedule and the work, who supplies the tools and space, who carries the financial risk, how integrated the person is into your business, and whether they work only for you.

Different bodies can also reach different conclusions. The CRA, WorkSafeBC, Employment Standards and the courts each look at the relationship through their own lens. In the WorkSafeBC situation I mentioned, the owner was told that a true independent contractor would have their own website, email, business cards, intake forms, fees, billing, records, marketing and referral sources. That's a long way from how many group practices operate, and it's exactly why this conversation matters. (And let’s be honest, that definition may change depending on which WorkSafeBC person you speak to.)

Independent Contractor

An independent contractor is running their own business and contracting with yours. They decide when and how they work, and they're free to work with other practices.

Your responsibilities

• Honour your agreement, including paying their share on time and providing what you promised, like space, admin support or referrals.

• Give notice of termination as your contract sets out. Independent contractors generally aren't owed more notice than the contract provides.¹

• Respect that it's their business. You don't deduct income tax, CPP or EI, and you don't pay vacation or stat holiday pay.

Three things you can ask of a contractor

1. Follow the policies that protect clients and the practice, like privacy, chart/note-keeping and how shared spaces are used.

2. Give advance notice of planned time away so clients and referrals can be managed, and notice of ending the agreement as your contract sets out.

3. Agree not to solicit clients or team members when they leave, in a reasonable, narrowly written clause. (Clients always have the right to choose who they see, so how this is worded matters.)

Three things you can't ask (without changing the relationship)

1. Set their schedule or approve their vacations.

2. Require exclusivity, so they can't work anywhere else. Exclusivity is one of the biggest factors pointing toward a dependent contractor or an employee.⁵

3. Direct how they do their clinical work, or require them to attend your training and events.

That first point is where a lot of frustration lives. One owner in the group described an associate on a 70/30 split who does great work but takes frequent days off, which makes referrals hard to manage. With an independent contractor, you can ask for notice of planned time off and talk openly about what the practice needs, but you can't dictate their days. If consistency is what you need, that's important information about which structure fits.

Dependent Contractor

A dependent contractor sits somewhere between an independent contractor and an employee. In BC, it's someone who relies primarily, or even entirely, on one business for their income.⁴ The BC Court of Appeal has pointed to how long and permanent the relationship is, how much they rely on you, and how exclusive it is.³

Many group practices have dependent contractors without realizing it... an associate who has seen all of their clients through your practice for years, for example.

Your responsibilities

• Give reasonable notice, or pay in lieu, if you end the relationship. In one Ontario case, two long-time kitchen installers who had been labelled contractors were each awarded 26 months' notice.⁵

• Know that they may be require that they are covered by you for WorkSafeBC, and may have Employment Standards protections if they're found to be employees.⁴

Three things you can ask

1. Work mostly or only with your practice.

2. Commit to a longer-term relationship and a steady caseload.

3. Be fully part of your team and use your systems.

You can ask for these things. Just know that the more of them you ask for, the more likely it is you have a dependent contractor, so plan for what that means.

Three things you can't do

1. End the relationship without reasonable notice just because the agreement says "contractor."

2. Rely on the contract label to protect you. Courts care far more about how the relationship works.¹

3. Direct their hours, supervise their work and require exclusivity, and still expect contractor status. At some point, that's an employee.

Employee

An employee is working in your business, and you have the most say in how the work happens. You also take on the most responsibility.

Your responsibilities

• Deduct and remit income tax, CPP and EI, and pay the employer's share.

• Meet BC Employment Standards minimums, including minimum wage for all hours worked, vacation pay, statutory holiday pay, paid sick days and overtime.

• Register with WorkSafeBC (Workers Compensation) and pay premiums.

• Give notice or pay in lieu when you end employment without cause, which can be more than the Employment Standards minimum unless your contract has a well-drafted termination clause.²

Three things you can ask

1. Work a set schedule and request time off in advance.

2. Work only for your practice, or avoid conflicts of interest, while they're employed with you.

3. Follow your systems, use your branding, and attend team meetings and training.

Three things you can't ask (or count on)

1. Accept less than Employment Standards minimums, like going without vacation pay, even if they agree to it.

2. Give up notice or pay in lieu if you end things without just cause.

3. Stay out of your area after they leave because of a broad non-compete. Courts rarely enforce them, and Ontario has banned most non-competes for employees.

There's More Than One Way to Pay an Employee

When most GPO hear "employee," a lot of them picture a salary and a big jump in costs. Salary is only one option. Depending on your practice, you might look at:

• An hourly wage

• A per-session rate

• A percentage of billings with a guaranteed minimum

• A base salary plus a bonus tied to caseload

• Part-time hours that grow with the practice

• A casual employee relationship

Each of these has to meet Employment Standards, including minimum wage for all hours worked (notes and admin time included), so it's worth getting advice on how you set it up.

Check That What You Want Can Be True

Once you know what you want, talk to an HR consultant and/or an employment lawyer before you sign anything, or now if you've been running your practice for a while.

Bring your list.

Ask whether the structure you're using fits the way your practice works, and what would need to change if it doesn't.

It can feel like a big expense, but getting it wrong can cost far more. Misclassification can mean unpaid vacation and overtime, WorkSafeBC premiums and fines, CRA issues and wrongful dismissal claims.³

Does the way I run my practice match the structure I say I'm using?

Final Thoughts

You don't need to know every legal test to make a good decision. You do need to know what you want, be honest about what you're offering in return, and check with someone qualified that the two line up. Whichever route you choose, clarity up front protects you, your team and your clients.

If you'd like to talk this through with other Canadian owners who've been there, this conversation comes up all the time in Group Practice Connection. You can learn more about GPC here, and I'd love to have you in the room.

References

1. Monkhouse Law, "Independent Contractors vs. Employees"

2. McMackin Law, "Independent Contractor vs. Employee in Ontario"

3. McConnan Bion O'Connor & Peterson, "Employee vs. Contractor in BC: Understanding the Differences", 2024, updated 2025

4. Ascent Employment Law, "Dependent Versus Independent Contractors in BC: Key Differences Employers Should Know"

5. Minken Employment Lawyers, "Exclusivity and the Dependent Contractor", 2016