A dependent contractor in BC is a self-employed worker or business that relies heavily on one company or client for its work and income.
Dependent contractors are not employees, but they are not completely independent either. If a company ends a long-term, economically dependent relationship without enough notice, the contractor can be entitled to significant compensation.
This is why the words “independent contractor” in your agreement do not automatically mean the company can end the relationship overnight and pay you nothing.
On This Page:
- 1. What Is a Dependent Contractor?
- 2. How Do You Know If You Are One?
- 3. Dependent vs. Independent Contractor
- 4. Are Dependent Contractors Owed Severance?
- 5. What If Your Agreement Says Independent Contractor?
- 6. What to Do If the Relationship Ends
What Is a Dependent Contractor in BC?
A dependent contractor is someone who remains self-employed but has become economically dependent on one company or client.
For example, you might invoice through your own business, pay your own taxes and supply some of your own equipment. But if you have worked almost exclusively for the same company for years and rely on it for nearly all your income, you can fall into the dependent-contractor category.
Think of worker status as three different possibilities:
- Employee: You work as part of the employer’s business and receive employee protections.
- Dependent contractor: You are self-employed but rely heavily on one company.
- Independent contractor: You operate a genuinely independent business with your own clients.
If you are unsure whether you are really self-employed at all, start with our guide to independent contractors in BC.
How Do You Know If You Are a Dependent Contractor?
Economic dependence, a long-term relationship and exclusivity are the strongest signs of dependent-contractor status.
You are more likely to be a dependent contractor if:
- You worked for the same company for many years
- Most or nearly all of your income came from that company
- You worked exclusively or almost exclusively for it
- The relationship was ongoing rather than project-by-project
- Your business became closely tied to the company
- It would be difficult to quickly replace the lost work with other clients
No single factor decides the answer. BC courts look at the real relationship as a whole.
Do you have to work exclusively for one company?
No. Complete exclusivity is not always required, but a high degree of dependence is important.
Having occasional smaller clients does not automatically make you independent if one company still provides the overwhelming majority of your work and income.
There is also no simple percentage rule where receiving 50, 70 or 80 per cent of your income from one company automatically makes you a dependent contractor.
Dependent Contractor vs. Independent Contractor in BC
The main difference is how economically dependent you are on the company.
A true independent contractor normally operates a separate business with several clients and can replace one client without losing most of their livelihood.
A dependent contractor might still run their own business, issue invoices and pay their own expenses, but the relationship with one company has become so important that losing it has an impact similar to losing a job.
Is a dependent contractor an employee?
No. Dependent-contractor status does not automatically make you an employee under BC’s Employment Standards Act.
That means being a dependent contractor alone does not automatically give you employee rights such as overtime, vacation pay or statutory termination pay.
If the company actually controlled your work and treated you like an employee, however, you could have been misclassified as a contractor. That is a different issue and can give you broader employment rights.
Are Dependent Contractors Owed Severance in BC?
Yes. A dependent contractor can be entitled to reasonable notice or compensation when the company ends the relationship without enough notice.
People often call that compensation “severance.” Legally, a dependent contractor’s claim is usually based on common-law reasonable notice rather than the statutory termination pay employees receive under the BC Employment Standards Act.
There is no fixed formula. The amount can depend on factors including:
- How long the relationship lasted
- How exclusive it was
- How dependent you were on the company
- The nature of your work
- How difficult it is to replace the lost business
- What your contractor agreement says about termination
BC courts have awarded months of notice to dependent contractors. The amount in your case depends on your own relationship rather than a standard contractor severance formula.
What if you were actually an employee?
If you were misclassified and are legally an employee, your termination rights can be greater.
You can have minimum rights under BC employment standards as well as greater common-law rights. Depending on factors such as age, position, length of service and the availability of similar work, severance pay in BC for an employee can reach as much as 24 months’ pay.
What If Your Agreement Says You Are an Independent Contractor?
An independent contractor agreement does not prevent you from becoming a dependent contractor.
A relationship can change over time. You might start with several clients but gradually take on more work from one company, stop serving other clients and become dependent on that single relationship.
The termination clause in your agreement can also affect how much notice is owed. That is why the contract and the actual history of the relationship both need to be reviewed.
What Should You Do If the Contractor Relationship Ends?
Determine your legal status before accepting that the company owes you nothing.
Keep your contractor agreements, termination notice, invoices and records showing how much of your income came from the company. Those documents can help determine whether you were independent, dependent or actually an employee.
Most importantly, don’t sign a release until you know what notice or compensation you are giving up.
Dependent Contractor BC: Frequently Asked Questions
Can a dependent contractor get severance?
Yes. A dependent contractor can be entitled to reasonable notice or compensation if a sufficiently dependent relationship is terminated without enough notice.
Does having other clients mean I can’t be a dependent contractor?
No. Some other clients do not automatically prevent dependent-contractor status. The question is how dependent the overall business relationship became.
Does invoicing make me an independent contractor?
No. Invoicing, charging GST or paying your own taxes can be relevant, but none of those facts decides your legal status by itself.
Can I be a dependent contractor after working for the same company for years?
Yes. A long-term relationship is an important factor, especially where the work was exclusive or nearly exclusive and you became heavily reliant on the company for income.
Find Out What You Are Owed
Losing a long-term contractor relationship can mean losing most of your income overnight. The fact that your agreement calls you an independent contractor does not automatically mean you are owed nothing.
Samfiru Tumarkin LLP’s BC employment lawyers can review your agreement and working relationship to determine whether you are a dependent contractor, a true independent contractor or a misclassified employee—and what compensation follows.
Contractors in Vancouver and the Lower Mainland can also speak with our Vancouver employment lawyers.