Independent Contractor vs. Employee for RMTs: Legal Considerations

Many Registered Massage Therapists in Ontario work in clinics, spas, or wellness centers under independent contractor agreements. These arrangements are common, but not always properly structured. The difference between being an independent contractor and an employee affects your tax obligations, legal rights, and professional compliance with the College of Massage Therapists of Ontario (CMTO).

Understanding the distinction between these two classifications is essential for both RMTs and clinic owners. It helps prevent tax reassessments, employment disputes, and professional risks that can arise when the working relationship is unclear.

Why Classification Matters

Your classification determines how you are paid, how taxes are reported, and what rights you have if the relationship ends.

If you are misclassified, several issues may arise. The Canada Revenue Agency may reassess your taxes and require the clinic to pay back contributions for Canada Pension Plan and Employment Insurance. The Ontario Ministry of Labour may determine that you are entitled to employee protections such as vacation pay, overtime, or termination notice. The CMTO may also raise concerns if a clinic’s level of control compromises a therapist’s professional independence or clinical judgment.

While a contract may label someone as an independent contractor, regulators and courts look beyond the written words to how the relationship actually functions.

Key Legal Factors

Ontario courts and regulators consider several factors to decide whether a person is an employee or an independent contractor. These include:

Control: Who decides how, when, and where the work is performed? Employees typically follow the clinic’s policies and scheduling system. Independent contractors usually set their own hours and control how treatments are delivered.

Ownership of Tools and Equipment: Who provides the linens, oils, equipment, or booking software? When a therapist supplies their own tools, this supports contractor status.

Chance of Profit and Risk of Loss: Independent contractors can increase their earnings by managing their own bookings or building a client base, but they also absorb the cost of cancellations or slower periods. Employees earn a consistent wage regardless of client volume.

Integration: If a therapist is presented as part of the clinic’s brand, appears on the clinic’s website, or works under the clinic’s insurance, the role may be integrated into the business. That often points toward employment.

Substitution: Independent contractors can often appoint another qualified therapist to perform services in their place. Employees typically cannot delegate their duties.

Reality of the Relationship: Even if a written agreement calls the therapist a contractor, regulators will look at how the arrangement operates in practice. If the clinic exercises significant control, the worker may legally be an employee.

Consequences of Misclassification

If a clinic classifies an RMT as a contractor but the relationship functions like employment, several consequences can follow.

The clinic may owe back taxes, vacation pay, and statutory deductions. The therapist may lose eligibility for certain tax deductions and face confusion about who owns the client list or records. Insurance coverage may also be questioned if the agreement does not accurately reflect professional independence.

In some cases, disputes arise over termination pay, unpaid earnings, or the right to continue treating clients after leaving a clinic.

How to Structure an Independent Contractor Relationship

If the arrangement is genuinely one of independent contracting, it should be supported by a clear and well-drafted written agreement. This agreement should reflect independence, accountability, and compliance with CMTO standards.

A strong independent contractor agreement for RMTs should include the following:

• A clear description of the services being provided.

• Confirmation that the RMT determines their own hours and methods.

• Details about how and when the therapist will be paid.

• Clear terms about who owns client records and how those records are handled under PHIPA.

• A confidentiality and non-solicitation clause that protects both parties without restricting lawful practice.

• Insurance requirements for both the clinic and the therapist.

• Termination and notice provisions that explain how either party can end the agreement.

When the agreement reflects the true nature of the working relationship, it helps protect both the therapist and the clinic from misunderstandings and liability.

When Employment Is the Better Option

Some arrangements are better structured as employment. If the clinic sets all schedules, provides all tools, and maintains full control over client bookings, this suggests an employer-employee relationship.

Employment provides stability and predictable pay. It also simplifies tax administration because the employer is responsible for source deductions. For clinics that prioritize long-term retention and brand consistency, formal employment agreements can provide clarity and control.

Professional Independence and CMTO Compliance

The CMTO expects every RMT to maintain professional independence and sound clinical judgment, regardless of their work structure. Business or contractual arrangements must never interfere with treatment decisions or client welfare.

Therapists and clinic owners should ensure that all agreements respect the therapist’s regulatory obligations. The RMT’s professional responsibility to their clients always comes first.

Understanding whether you are an independent contractor or an employee is essential for compliance, taxation, and professional integrity. A well-structured agreement that accurately reflects the relationship can help prevent costly disputes and protect both parties.

If you are uncertain about your classification or need help drafting or reviewing your contract, professional legal guidance can save you from future complications.

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