Independent Contractor vs Employee for Chiropractors in Ontario: Legal Considerations

Many chiropractic clinics in Ontario rely on associates to support patient volume, expand service offerings, and increase clinic capacity. However, confusion frequently arises about whether an associate chiropractor should be classified as an independent contractor or as an employee. This distinction is significant because misclassification can result in tax penalties, unpaid employment entitlements, clinic liability, and contract disputes.

Clinics must ensure that their working arrangements comply with employment law, tax law, and the expectations of the College of Chiropractors of Ontario. Proper classification also affects how revenue is shared, who owns patient records, and what happens when an associate leaves the clinic.

Understanding the Legal Test for Classification

In Ontario, classification is not based on what the parties label the relationship. Courts and regulators review the actual working arrangement to determine whether the associate is truly independent.

Key indicators include:

• Control Over Work: If the clinic dictates how treatments are provided, sets strict workflows, or requires the associate to follow mandatory procedures, this resembles an employment relationship. Independent contractors maintain more autonomy over their work.

• Ownership of Equipment: Employees typically rely on the clinic to supply everything they need, while independent contractors may bring their own equipment, tools, or administrative systems. Chiropractors often share equipment, so this factor must be supported by the contract language.

• Financial Risk and Opportunity for Profit: Independent contractors carry more financial risk. They pay their own expenses, purchase insurance, and manage their own tax remittances. They also have the opportunity to increase revenue through business development. Employees generally receive predictable compensation.

• Integration Into the Clinic: If the associate is branded as an integrated member of the clinic, uses clinic signage, or is marketed as part of the primary practice, this suggests an employment relationship. Independent contractors operate with more business separation.

• Exclusivity: Independent contractors may work for multiple clinics or run their own independent practice. Employees usually work for one employer.

No single factor determines classification. The entire relationship must be evaluated.

Why Proper Classification Matters

Misclassification can expose the clinic to substantial consequences. If a chiropractor is treated as a contractor but is legally an employee, the clinic may become liable for:

• Unpaid vacation pay

• Unpaid public holiday pay

• Overtime obligations, where applicable

• Employment termination pay

• Payroll deductions and remittances

• CPP and EI contributions

• Potential CRA reassessments

Associates may also claim wrongful dismissal if the clinic terminates the relationship without proper notice. Clinics that rely on outdated or generic contracts face significant risk.

Contract Requirements for Independent Contractor Associates

Most chiropractic clinics prefer to treat associates as independent contractors. However, contractor status is never automatic. The written agreement and actual working conditions must both support contractor classification. A strong associate contractor agreement should include:

• Scope of Services: Define the services the associate will provide in a manner that preserves professional independence. Avoid language that creates employer like control.

• Compensation Structure: Common models include percentage splits or fee for service arrangements. The agreement should also explain how refunds, missed appointments, adjustments, and billing errors are handled.

• Use of Equipment and Clinic Space: If the associate pays a rental fee for space or contributes to overhead, this supports contractor status. The contract should clearly describe any shared equipment or resources.

• Recordkeeping and Documentation Obligations: Even as contractors, associates remain accountable for PHIPA compliance and CCO recordkeeping standards. The agreement should confirm who maintains records, how records are stored, and how records are transferred when the relationship ends.

• Client Ownership and Non Solicitation: The agreement must clarify who owns the patient records and whether the associate may contact clients after leaving. Non solicitation clauses must be drafted carefully to be enforceable and consistent with professional obligations.

• Termination: Contractor agreements must explain how the relationship may end and what happens to outstanding revenue, charting, and treatment plans.

• Professional Responsibilities: The associate must maintain registration, liability insurance, and compliance with the CCO at all times.

A poorly drafted agreement can lead to misclassification, unenforceable clauses, and disputes over revenue, patients, or clinical responsibilities.

When an Associate Should Be Classified as an Employee

Some chiropractic practices operate in a way that makes employment classification more appropriate. Clinics should consider an employment relationship when the associate’s day to day activities align with the characteristics of an employee.

Employee classification may be required when:

• The clinic sets strict hours and controls treatment protocols.

• The associate works exclusively for the clinic.

• The associate receives a salary, hourly wage, or guaranteed minimum income.

• The associate carries minimal financial risk and does not pay their own operating expenses.

• The clinic supervises the associate’s work closely or monitors performance.

• The associate does not control their workflow, scheduling, or treatment decisions.

In these situations, an employment contract may reduce legal risk and create a more predictable working relationship.

Choosing the Correct Structure for Your Clinic

There is no single model that applies to all chiropractic clinics. The correct classification depends on clinic operations, compensation structure, workflow control, and the degree of independence expected from the associate. What matters most is that the legal structure reflects reality. A properly drafted agreement protects the clinic and the associate, reduces disputes, and ensures compliance with CCO standards and Ontario law.

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If your clinic requires support drafting an associate agreement or determining the proper classification of chiropractors, you can Book a Consultation.