What is considered when looking at the issue of chance of profit/risk of loss?
The
chance of profit/risk of loss test addresses whether the
worker is earning a fixed wage or salary or ongoing commission.
Or is the worker in business to make a profit and therefore at risk
of losing money?
When
a court, tribunal, or government agency is considering this issue,
they may ask questions such as these:
- Does
the person have a chance of profit? If his/her income is always
the difference between the cost of providing the service and the
price charged for the service, the worker may be a contractor.
- Is
the person at risk of losing money if the cost of doing a job
is more than the price charged for it? If not, the person is likely
an employee.
- Does
the worker have a financial investment in the business, over and
above providing labour?
- Who
has the liability if the worker is negligent in completing the
work, or if the work is not completed?
WARNING:
The contents of these FAQs are intended as general legal information
only.
If
you have a personal problem, please consult a lawyer.
May
2008 |
