Summary: Dependent Contractors in Alberta
A dependent contractor in Alberta is a worker who operates as a contractor but relies on a single client for most or all of their income. Legally, this category sits between an employee and an independent contractor.
Because of this economic dependence, Alberta courts grant dependent contractors the right to “reasonable notice” or severance pay upon termination — even if their contract says otherwise.
An “Intermediate” Status with Significant Rights.
Many workers are told they aren’t entitled to severance because they are “just a contractor.” In Alberta, if you work exclusively for one company, that statement is often legally incorrect. Our team helps dependent contractors secure the financial exit packages they have earned through years of dedicated service.
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What is a Dependent Contractor in Alberta?
When asking “what is a dependent contractor,” the answer lies in the level of economic reliance. A dependent contractor in Alberta is someone who is technically self-employed but whose relationship with a client looks and feels like employment. Unlike a true independent contractor who has multiple clients, a dependent contractor usually works for one company for an extended period.
Alberta courts recognize that losing a “sole client” is just as devastating as being fired from a job. Therefore, the law provides an “intermediate” status that grants these workers specific protections that traditional contractors do not have.
Dependent Contractor vs. Independent Contractor
The distinction in dependent contractor vs independent contractor status often comes down to the “exclusivity” of the work. If you have been with the same client for years and they provide 80% or more of your total billings, you are likely a dependent contractor.
Key differences include:
- Client Base: Independent contractors have many clients; dependent contractors have one (or one primary) client.
- Integration: Dependent contractors are often deeply integrated into the client’s business, using their email addresses and attending staff meetings.
- Termination Rights: Independent contractors can usually be let go with only the notice specified in their contract. Dependent contractors are entitled to “reasonable notice” under common law.
Do Contractors Get Severance Pay in Alberta?
One of the most common myths is that “contractors don’t get severance.” So, do contractors get severance pay in Alberta? If you are a dependent contractor, the answer is yes.
Because the law treats you as “near-employees,” your severance pay in Alberta is calculated using the same factors as a full-time employee: your age, the length of your service, and the nature of your role. It is not uncommon for a long-term dependent contractor to be owed 12 to 24 months of compensation upon termination.
Termination of a Dependent Contractor
A contractor termination is often handled poorly by employers who believe they can end the relationship with a simple email. If you are a dependent contractor, your employer must provide you with “reasonable notice.” If they fail to do so, you may have a claim for wrongful dismissal.
If you have been told your services are no longer needed, do not sign any “release” or “final payment” documents until you have confirmed your status. You could be walking away from a significant severance payout — as much as 24 months’ pay.
Consult a Contractor Rights Lawyer
Determining whether you are a dependent contractor in Alberta requires a careful legal analysis of your history with the client. The employment lawyers at Samfiru Tumarkin LLP specialize in helping “contract” workers uncover their true rights and secure the severance they deserve.