2 0 questions - Canadian Institute of Chartered Accountants

Example 1: Nafisah is employed as a paid marketingdirector for an organization. She works40 hours a week in this role. She agrees tovolunteer her time on weekends to attend atvarious events where she hands out brochuresabout the organization. There is no specificrequirement that she do this, but she feels itis expected. As the volunteer work is directlyrelated to what she does as an employee, it isvery likely Nafisah would be entitled to be paidfor that additional work, including any requiredovertime.Example 2: Marcel works as a marketing directorof a national professional association. Theassociation is having a neighbourhood fun fairas a fund raising event to raise money for thelocal children’s hospital. The charity has norelation to the business of the association. Marcelvolunteers to come and paint faces at theevent. In that case the work is unrelated bothto Marcel’s job and to the core business of theassociation, and would be properly characterizedas voluntary and thus unpaid.Similarly, where an individual is employed as anindependent contractor and the relationship isterminated, a court could find that the relationshipwas actually one of employment, therebytriggering notice and severance obligations.In addition, fines and interest could be leviedagainst the organization for failure to withhold therequired employer taxes and remit employer premiumson behalf of the individual for the durationof the relationship.As a result, it is extremely important that relationshipswith service providers be properlydocumented in writing and signed by both theorganization and the service provider, with termsthat clearly outline each party’s rights and obligations.Where an individual provides services inmore than one capacity, the organization mustdocument the difference in the roles and keepappropriate records with respect to each activity.Checklist for DocumentingContractual RelationshipsContracts can be as complex or simple as theorganization wishes. They can be by way of letter,or by way of a more legalistic documentthat looks like a formal contract. Regardless ofthe format, the agreement should address:• nature of the position• reporting relationship• duration• nature of services to be provided• compensation and benefits• required notice of termination• provisions relating to confidentiality anduse of personal informationIssues Relating to Employees15. What is the board’s responsibilityfor compliance with employmentlaws and regulations?The details of the organization’s compliancewith applicable laws and legislation are theresponsibility of management. However, theboard of directors is responsible for overseeingcompliance. As such, directors should have anunderstanding of the organization’s legal obligationsso as to be able to satisfy themselves thatthose obligations are in fact being met.There are numerous legislative minimum requirementsemployers must meet or exceed withregard to how they compensate and treat theiremployees. Some of these provisions are similaracross all provinces and territories, while otherprovinces may have their own unique provisionswith regard to specific areas of employment.14