Locum Vets: Employee or Contractor in BC? CRA Rules You Must Know
In the last CRA payroll audit I defended, a three-vet mixed practice in Kelowna owed $27,840 in CPP, EI and penalties because their “contractor” locum was really an employee. Below is the exact 4-step test CRA auditors used—and the free checklist you can copy before you book your next relief vet.
Why CRA Cares (and Why You Should)
- Payroll remittances missed = 10% penalty + interest back to the first day.
- WorkSafe BC can also assess unpaid premiums (2.3% of wages).
- If the locum slips and falls, your insurer may deny coverage because no WCB was in place.
CRA’s 4-Point Test (Copy This Table)
| Point | Employee Indicator | Contractor Indicator |
|---|---|---|
| Control | You set hours, provide equipment, require clinic scrubs. | Locum chooses schedule, brings own instruments, uses your space only. |
| Chance of profit/risk of loss | Guaranteed hourly rate, no overhead if client no-shows. | Paid per procedure, pays own travel, absorbs cancellation cost. |
| Integration | Your reception books appointments, you advertise their services. | They bring own bookings, listed as separate business on invoice. |
| Ownership of tools | Clinic supplies ultrasound, dental unit, vehicle. | Locum buys portable ultrasound, pays own vehicle lease. |
Real CRA Ruling I Received (2024)
Facts: Locum worked 4 consecutive weeks, clinic set opening hours, provided all equipment, paid flat $800/day.
CRA decision: Employee—clinic liable for CPP/EI + penalty.
Missing items that would have flipped result:
- Locum invoiced through her own professional corporation.
- She carried her own malpractice & general liability insurance.
- Agreement stated she could send a substitute vet (with same license).
BC-Specific Twist: WorkSafe BC Coverage
Even if CRA accepts contractor status, WorkSafe BC can still deem the worker your employee for insurance premiums. File a Request for Ruling before the first shift; it’s free and protects you retroactively for 12 months.
Free 1-Page Locum Agreement (Download Link)
I give every clinic a fill-in-the-blank template that hits all 4 CRA points plus the WorkSafe clause. Grab it below—takes 5 minutes to customize.
Email me for the free BC Locum Agreement template (Word + PDF)
Quick Checklist Before You Sign
- ✅ Invoice issued in corp name / GST/HST number shown
- ✅ Locum carries own liability insurance ($2 M)
- ✅ Written right-of-substitute clause
- ✅ No hourly guarantee—paid per procedure or flat day rate with cancellation window
- ✅ Request WorkSafe BC ruling if >$2,500 earnings
Bottom Line
Get the relationship right on Day 1 and you’ll save $25k+ in back-premiums and sleep better at night. Get it wrong and CRA’s new payroll-audit bots will find you—they already nailed my client for GST; payroll is next on their list.