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Tag Archives: acsess

All Talent Development Centre posts for Canadian technology contractors relating to the Association of Canadian Search, Employment and Staffing Services (ACSESS).

Contracting and the Underground Economy

Morley Surcon By Morley Surcon,
Vice-President, Western Canada at Eagle

The Underground Economy Doesn’t Apply to Independent IT Contractors… Or does it??

The Underground Economy Doesn't Apply to Independent IT Contractors... Or does it??The topic of Canada’s underground economy seems to be raised again and again over the course of years and tends to come in waves — we’re seeing one now.  In the last week alone, I’ve read several newspaper articles and even heard it on my drive in on the News Talk radio station that I listen to.

What is the “underground economy”?  Sounds pretty sinister and, I suppose, parts of it might be, but it’s a lot more common than most people realize.  The CRA defines the underground economy as:

The underground economy is any activity that is unreported or under-reported for tax and GST/HST purposes. Often called “moonlighting” or “working under the table,” it can include bartering, failing to file tax returns, omitting an entire business activity from your tax return, “skimming” a portion of business income from what you report on your taxes, and not reporting a portion of employment income like tips and gratuities.

Generally, any income you earn is taxable and you have to report it on your tax return. If you don’t file your tax return or register your business for GST/HST when you’re supposed to, or you don’t report all of your income, you are participating in the underground economy.

So, by this definition, it is the guy down the street that does landscaping on the side; it’s the waiter who pockets your tip without claiming it as income; it’s the small business that accepts cash without putting it through the till.  Various newspaper articles estimate Canada’s underground economy to be worth between $42 Billion and $46 Billion — in aggregate, not a small amount.  That’s a lot of tax that is not being collected and everyone from the CRA to Chartered Accountants are looking at ways to curb these practices.  I’ve seen ideas ranging from legislating restaurants to track and report tip money on T-4’s to instituting a reward program for leads that result in $10,000 or more in taxes collected. (This latter already exists. CRA’s program is called the “Informant Leads Program” and, apparently, some of the most common “sources” of leads come from ex-business partners and divorced spouses).

As the economy is suffering and government spending is being spread very thin, this missing tax revenue is being highly coveted by government. But this doesn’t impact professional and/or technology contractors, does it?  After all, most are hired via a well-defined contract and have clear paper trails including time sheets, invoices and remittances.  The answer to that question is yes.  Well, maybe.  Certainly the paper trail will help in the case of an audit but by the time there’s an audit, the pain is already being felt.

Independent contractors (IT, Finance/Accounting, Engineering, etc.) should have concerns that the government may take a broad-brush approach to contractors/temporary labour in general; lumping them all together without full consideration for their differences.  This is one reason that Eagle belongs to (and has taken leadership in) such industry organizations as ACSESS and the NACCB, which are staffing industry associations who are actively lobbying the Canadian and Provincial governments on behalf of the industry and the contractors that are a part of it.

If you wish to learn more about the underground economy in Canada, I’ve attached links to some recent new articles below.  Let me know your thoughts on this issue by leaving a comment below!

Is Your Staffing Company Involved in its Industry?

Morley Surcon By Morley Surcon,
Vice-President, Western Canada at Eagle

The temporary labour/contract staffing industry has several industry associations.  They range from general staffing associations such as ACSESS (Association of Canadian Search, Employment and Staffing Services) to associations based on a more specific subset of the overall industry like the NACCB (National Association of Computer Consulting Businesses).  As a basic foundation, these organizations represent the interests of the companies that comprise the industry and they set guidelines for industry best practices, business ethics and they will interface with other organizations (such as the Canadian Federal and Provincial governments) to ensure the market for human resources remains open for member organizations, Canadian businesses and workers (temporary or otherwise) alike.

NACCB and ACSESS logosNot all staffing companies belong to industry organizations and even fewer take an active role.  Why would this be important to incorporated contractors, sole proprietors and temporary workers?  Why should you care?

Well, I’m glad you asked!

By working with or through a staffing company that is directly and actively involved in Industry Associations, there are the following benefits:

  • They agree to operate to a higher standard – Industry Associations are quite prescriptive in how they expect companies to behave.  By becoming a member, staffing companies agree to a strict set of guidelines, standards and business ethics.
  • They are open to new ideas and are committed to improving their capability and services over time.  Industry Associations provide professional training and business development courses for their membership.  They work together to stay on the forefront of new trends so that they (and the contractor partners that they represent) remain relevant in the changing market.
  • They influence Canada’s employment rules and business environment through their work with government departments and committees.  They take part in business conferences and influence educational programming by providing relevant market data points for colleges and universities.  Through member companies, your collective voices are heard by organizations and institutions that matter.
  • They are up on the changing legal landscape.  Things like Deemed Co-Employment and Personal Services Businesses that directly impact the contractor community are better understood and, through sheer force of numbers, their messages are heard by policy makers.  Industry Associations are currently lobbying the government, seeking clarity for contract workers with respect to PSB policy.  Through clarity, Canada’s contract workforce will be able to make adjustments to reduce risk.  Industry Associations are taking the lead in this process to benefit all contractors.

Eagle takes our corporate citizenship very seriously.  We have been and continue to be extremely active contributors to ACSESS (Eagle’s CEO is on the board and has been a past President) and the NACCB (Eagle’s President is also the current President of the NACCB).  In addition, our President is a founding member of the Canadian Coalition for Tomorrow’s ICT Skills (CCICT) and Eagle’s Vice-President of Government Services sits on the Informatics Professional Services Advisory Committee for the Federal Government.  Our company is also a member of a variety of industry organizations including the Information and Communications Technology Council (ICTC) and the Canadian Federation of Independent Business (CFIB).  Because we know the importance of all of these organizations, we take every opportunity to educate the market as to their value and we encourage the participation of our peers.  In return, this promotes the standards and ethics in our industry and has positive effects on independent contractors across the country.

How much priority do you place on your agency’s industry involvement?  Do you think that you might consider it more often when choosing your agency?  Tell us why or why not, we’d love to get your opinion!

Staffing Agencies Do Not Charge Individuals

There are many beneficial reasons for independent contractors to work with staffing agencies.  Unfortunately, there are some negative views of our industry based on false pretenses.  A particular one is with respect to who pays for our services.  The straight answer to that is it is always the client.

Staffing agencies are the number one way for people to find work.  If you are a temporary employee or an independent contractor then likely you are going to find your next role through the staffing industry – and you should never have to pay for that right to work.

If you are a temporary employee in Ontario, Bill 139 made it illegal for an agency to charge you a fee to work. Whether that is to find you a job or some kind of fee tied to working, section 74.8 of the Employment Standards Act explains.

NACCB and ACSESS logosElsewhere, even if there is no legislation, both of Canada’s largest staffing industry associations have Codes of Conduct covering this subject, and both have Ethics Committees that will rule in cases where the codes might be broken.  (This is a valuable asset and a great reason why candidates should work with members of the industry association).

The Association of Canadian Search Employment and Staffing Services (ACSESS) is Canada’s largest staffing industry association.  Their Code of Ethics states “We will derive income only from clients and make no direct or indirect charges to candidates or employees unless specified by a license.”

The National Association of Computer Consulting Businesses (NACCB) Canada represents the “professional” staffing companies.  Its Business Principles state “NACCB Canada members will derive income only from clients and make no direct or indirect charges to candidates unless specified by a license.”

Everyone has a right to work and staffing agencies earn their fees from their clients who receive the many benefits of a flexible workforce.  If you are ever asked to pay a fee to a staffing agency which is not voluntary then you might want to consider whether (a) it is legal, and/or (b) is it ethically in accordance with the Industry Association Codes of Ethics.  Your options then would be to contact the industry associations for advice and support.  Here is a link to the Board of Directors at ACSESS  and a link to the Board of Directors at NACCB.

Canada’s Staffing Industry provides their clients’ access to a flexible and talented workforce, and the industry provides individuals with a myriad of job opportunities.  Credible staffing companies operate under a strict code of conduct and all job seekers should work with credible companies, who abide by the industry codes of conduct.

Does Your Recruiter Work with an Industry Association

Why Should You Work with a Staffing Company with Industry Association Membership?

Eagle is a strong proponent of participation in associations and memberships within our industry, and we believe that any good corporate citizen really should belong to industry associations.  So why is it important to a candidate, independent contractor or temporary employee to choose to work with an association member in lieu of a non-member?

  1. Serious companies recognize the need to support associations.  Working with a company that belongs to an industry association means that you are working with a company that is serious about their business.
  2. The association fights for the rights of the members, their employees and their contractors. A by-product of that effort is that they are fighting for the non-contributing companies too.  How fair does that sound?  If these companies are not fair to their industry association will they be fair to you?
  3. The members are kept abreast of the issues of the day. As an example, each month, the ACSESS Government Relations Report lists its current initiatives. The NACCB lobbying efforts are also continually focused on a couple of big issues.
  4. How do you know your company understands the rules applicable in the staffing industry if they aren’t involved in the associations that help to define it?  Anyone can “hang out a shingle” and sound credible, but the rules around deductions for temp versus sole-proprietor, or for independent contractors, can get interesting and change quickly.  Associations provide advice on these complex issues and support to their members on how these changes affect their business. The end result is added protection for you.
  5. Industry associations hold their members to a code of conduct and not all companies do! A code of conduct ensures that members remain ethical not only today while you’re working together, but well into the future.
  6. Industry associations will arbitrate and provide expert advice when issues arise.  It is easier if the companies involved are dealing with members.
  7. Industry associations provide ongoing guidance and education to ensure that their members are up-to-date on legislative requirements further ensuring the protection of those that work with them.

Here in Canada there are a couple of primary industry associations that represent the staffing industry:

  1. Association of Canadian Search, Employment & Staffing Services NACCB and ACSESS logos(ACSESS) is the largest, representing the industry in general.
  2. National Association of Computer Consulting Businesses (NACCB) is probably the next largest with a mandate of supporting those staffing companies in the IT space specifically.

There are also local associations.  For example, CabiNet is a local Ottawa-based organization focused primarily on companies supplying contract services to the Federal Government.

How do you know if they are a member of an industry association? Ask them! If they belong to one of the larger organizations mentioned above, visit the association website.  All the members are listed.