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This may be a strange question and I may have some misunderstandings.

In my experience it's not unusual for a contractor to be doing the same work as a regular employee. For example if a firm needs extra people during a busy time they hire contractors on for a short period of time. The contractor would likely use the same company equipment. They would work off the same computers, printer and stationary etc. as everyone else in the office.

It's a common misconception that a written contract determines whether an individual is a contractor or employee, but this is not the case (at least in Canada, and I thought the US too). The distinction between contractor vs employee is actually done by a set of tests.

Since contractors often do the same work (and in the same way) as regular employees do, does that mean its common for businesses to be "pulling a fast one" when they hire people as contractors?

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    Keep in mind you may be seeing two kinds of contractors: Independent contractors, who run their own business, and contractors that are actually employees of a contracting agency. The tax office and law may look very differently on the implications of either category of contractor doing the same work (and under the same conditions) as a regular employee. – Bart van Ingen Schenau Jan 30 at 11:49
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    In the US, temporary workers are technically the employees of the temporary agency that hired them. The temp agencies won't have good benefits, but at least, they'll pay for unemployment, social security, and do the withholding of taxes. That's how some American companies get around the "contractor" test. – Stephan Branczyk Jan 30 at 11:53
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No, using people under contract is a normal way of coping with changing demand.

It happens in many industries and I was employed on a 1 month contract for a specific task. As it changed then I ended up there for 18 months - on renewed 1 month contracts...

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There is a great deal of misunderstanding in what the differences are between contract employees and actual contractors.

I cannot speak to Canadian law, but what you describe sounds like contract employees, and not contractors.

The specifics of Canadian law, and the province regulations would need to be consulted.

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  • I have trouble following, don't most employees have contracts? Just because someone has a contract doesn't mean they are a contractor. – plants1234 Feb 1 at 0:17
  • @plants1234 - No. A contractor is someone who agrees to do a job for a price, and provides their own equipment, materials, and labor to perform that job. – Wesley Long Feb 13 at 20:35
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The distinction between contractor vs employee is actually done by a set of tests.

This is becoming increasingly common throughout many countries, with revenue authorities increasingly looking at the "larger picture", i.e. using tests which may encompass aspects of the contract, but frequently ignoring aspects of it entirely.

These contracts tend to fall into two broad groups; contracts for supply of services between parties and employment contracts. The latter fairly obviously apply to employees and often fall under specific legislation which grant additional rights and responsibilities.

Since contractors often do the same work (and in the same way) as regular employees do, does that mean its common for businesses to be "pulling a fast one" when they hire people as contractors?

Historically, this did used to occur in rare circumstances, when "pulling a fast one" (of this type) was entirely legal and done to reduce the tax liability of the individual (again, entirely lawful), and it was the perception of this which has led to the attempts to legislate against this behaviour.

Is it "right"? Morally justifiable? "Fair"? I'd say "fairness" is determined by the person directly affected (paying the tax), not you or any other observer.

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