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Wednesday, January 20, 2010
capital news B3
BUSINESS ▼ EI COVERAGE CHANGES
▼ KELOWNA
Employee/contractor line being blurred
Expert to show five ways to innovate
O
ne of the factors marking the line between employees and independent contractors has been eligibility for employment insurance (EI) coverage. As a result of changes to federal legislation, the line just become somewhat more blurry. Historically, only employees were eligible for EI coverage. The risk of not having that aspect of the social security net to fall back on was just one of the many risks of being an independent contractor. In December, the Fairness for the Self-Employed Act (who says government isn’t warm and fuzzy?) was passed. It permits self-employed persons to opt into the EI program to receive special benefits. The EI coverage for which the self-employed will now be eligible includes maternity, parental, sickness, and compassionate care benefits. They will not be eligible for regular EI wage replacement benefits. The new eligibility
LEGAL EASE
Robert Smithson rules are effective as of the beginning of 2010. Due to the way the rules work, however, selfemployed persons who opt into the EI program will not be able to collect any benefits payments until January 2011. Generally speaking, people who operate their own business are considered to be self-employed. Some occupations will, however, be ineligible, including barbers, hairdressers, taxi drivers, certain other drivers of passenger-carrying vehicles, and certain fishers. To become eligible for coverage, a self-employed person must enter into an agreement with the Canada Employment Insurance Commission. This can be achieved
online. Once a self-employed person enters into the agreement, he or she has 60 days to reconsider. This window of opportunity should not be taken lightly because the implications of opting into the EI program are significant. Once the self-employed person has opted into the EI program, he or she can opt out but only if benefits payments have not been received. If benefits have been received, the person must continue to pay EI premiums on income for as long as he or she remains self-employed. If the self-employed person does opt out, he or she must continue to pay EI premiums until the end of that calendar year. No refunds of EI premiums will be made upon opting out. To qualify to receive these special EI benefits, the self-employed person must have experienced an interruption of earnings due to the birth of a child, the need to provide care to a newborn (or adopted)
child, illness, injury, quarantine, or the need to provide care to a gravely ill relative. The self-employed person must also have earned a minimum specified amount of earnings in the year prior to the claim (for 2010 the specified amount is $6,000). Benefits payments cannot be received until one year after the person opted into the EI program. There is a two-week waiting period after an application to receive benefits payments is made. EI maternity benefits payments last up to 15 weeks’ duration, parental benefits up to 35 weeks, sickness benefits up to 15 weeks, and compassionate care benefits up to six weeks. It seems to me there are several reasons why most independent contractors, or self-employed persons, will take a pass on this new entitlement to opt into the EI program. First, for many of them, avoiding the burden of payments such as EI premiums is one reason they chose to be self-em-
ployed to begin with. Second, if they do opt in, they won’t be eligible to receive regular EI benefits in the event of a normal, lack-of-work interruption of earnings. Third, once they have received any benefits at all, they must continue to pay premiums for the entire balance of their selfemployed career. (Like the Hotel California, you can check out anytime you like, but you can never leave…) If you’re a self-employed person, you might think this isn’t much of a bargain. If that’s your view, you’ll stay true to your independent contractor roots and avoid this aspect of the social security net. Robert Smithson is a partner at Pushor Mitchell LLP in Kelowna practicing exclusively in the area of labour and employment law. This subject matter is provided for general informational purposes only and is not intended to be relied upon as legal advice. 250-869-1220 Smithson@pushormitchell.com
▼ REGION
Olympic opportunity to promote the Okanagan The Okanagan Valley Economic Development Society has organized a special event at the Commerce Centre in Vancouver to bring together Okanagan businesses, trade commissioners and Olympic media to promote investment in our region. Scott Boswell, chair of OVEDS, said, “The Olympics are the world’s largest advertising campaign and to link into that media coverage is a fantastic way to promote our region and its business opportunities.” The event will showcase a variety of Okanagan wines and specialty food products, along with a cooking demonstration with celebrity chef Ned Bell. OVEDS will be working with the unaccredited media centre, which will be home to more than 400 media personnel to target media coverage in the United Kingdom, USA, Germany, Holland, Austria, China and Japan. Corie Griffiths, vicechair of OVEDS, said, “We want to show the world that the Okanagan region is progressive and
innovative and offers investment opportunities in high tech, green infrastructure and agri-food and at the same time offers an exceptional quality of life.” OVEDS is setting up a website at www.okanag-
anstories.ca to host Olympic related stories on local athletes and businesses that have worked directly with the Olympics. Businesses that have connections to the seven targeted countries will also be hosted on the site.
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OVEDS is a joint initiative between the Economic Development Commissions throughout the Okanagan. Its primary objective is to design and implement economic development initiatives that
support collective opportunities for the region. Its members include Penticton, Summerland, Central Okanagan Regional District (CORD), Thompson Okanagan Tourism Association (TOTA) and Vernon.
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An idea may lead to an invention, but it can’t be called an innovation until it is commercialized. The marketplace turns an invention into an innovation. It is only when technological know-how is developed, sold, distributed and used that it becomes an innovation. Some ideas are a technical success, and may even be patented, but can’t be sold. The road from idea to marketplace is often long and uncertain. On Thursday, Jan. 21, 5 p.m., the ongoing weekly Okanagan Institute Express series starts a new year at the Bohemian Cafe by presenting Innovation Vineyard: Challenges and Opportunities . Douglas MacLeod, the associate dean of science, technology and health at Okanagan College, will lead a session on how we can become one of the most innovative regions in the country. Here in the Okanagan, MacLeod says there are companies that are pioneering new approaches to doing business. Those experiences suggest five ways that our valley could play a leadership role in addressing this issue: 1. Using high quality design is the easiest, fastest and most economical way to increase your bottom line through innovation. 2. Cloud computing is the idea that small and large companies can tap into enormous computing resources at a data centre via the Internet but only pay for what they need and use. This leads to the concept of “software as a service” where you access only the software you want when you want it. Companies across the country could save thousands of dollars a year by embracing this approach. 3. The valley could pioneer the idea of being “resource positive” which means that we develop buildings and communities that generate more energy than they consume and purify more water than they use. 4. Social networking can also be used to foster innovation. Innocentive (www.innocentive.com) is a global website where companies can post research problems and individuals can suggest solutions for cash rewards from $5,000 to $1 million. There is no reason why a similar service could not be set up for Okanaganbased companies. 5. Recognize the importance of small business in driving innovation. Too often we hear of the need to pick “winners” and focus investment in large population centres and facilities while ignoring the fact that in British Columbia more than 90 per cent of our technology companies are small businesses. For more information and to register, go to www. okanaganinstitute.com.
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