As a new school year begins a lot of families are looking for different childcare alternatives for before and after school. Families who hire part time caregivers are often told that they do not need to follow the same rules when it comes to CRA and WSIB employer obligations for their employee. However this is not the case!
If you have hired someone to take care of your children, clean your home, or pick up your children after school, for even only 2 hours a day, chances are you are considered an employer by CRA. And if you have been paying your caregiver by cash and expecting them to report the income, then you are risking getting a huge penalty from CRA.
You might think this article is still not for you and you want to argue that you are one hundred percent sure your caregiver or housekeeper is a independent contractor and there is no responsibilities on your end, then I want you to think about the following questions and whisper the answers to yourself.
Do you tell the worker how and when the work is performed? Do you control the worker with respect to both the results of the work and the method used to do the work? Do you determine the method and amount of pay even if there was negotiation? Namely, do you tell the caregiver what time to pick up your children from school and what activities to do with your children? Do you tell your housekeeper how to clean your home and provide them with the cleaning supplies to do so? Do you tell the caregiver/housekeeper how much you want to pay them?
If you answered yes to the questions above, you are indeed an employer and according to CRA, “If you do not comply with the deducting, remitting, and reporting requirements, you may be prosecuted.” As an employer, you have to deduct and remit payroll remittances, provide your employee with paystubs and a T4 at the end of the year and when their employment ends with you a Record of Employment if needed etc.
It is never too late to start doing things right!