I’m pleased to share with you my article infection control lawsuits and how dentists need to be aware of the legal risks associated with patients and their family members getting letters from public health or the practice itself, advising them to get checked for communicable diseases:
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Here’s a new testimonial from someone from a dentist who engaged DMC LLP to help prepare, market and sell their practice. You can see all of our testimonials HERE.
“I recently had DMC LLP represent me in selling my large practice. I had Michael, Jonathan and David help me with VARIOUS employment law issues before the sale. Any one of those issues could have been a disaster, but they were awesome at taking care of everything. Michael then marketed the practice and found the right buyer for me. It’s not just about how much I saved in commissions by using DMC LLP – literally, HUNDRED OF THOUSANDS of dollars – but it’s how they were responsive throughout the process, protected me, and negotiated through MANY different situations which could have ended badly for me. Many times, I thought the deal was not going to happen. But somehow or another Michael told me not to worry and that we managed to get through it. “There’s no such thing as a bad day”, he would often tell me. He presented me with lots of options and I felt like he was on top of everything. Michael and David even went out of their way to leave their office (something I don’t expect from my lawyers) and come to my practice to meet staff and associates to help assist with the transition. I don’t think it could have gotten done without them. They worked hard every day and were available at all hours of the day to talk me through the issues by phone, text, email. When it was all said and done, I felt a great weight lifted off my shoulders and was so happy with the result!!! I got what I wanted. I highly recommend DMC LLP if you’re thinking about selling your practice and would use them again for sure. Knowing what they did to get through the sale of my large practice makes me very confident in saying: they can sell your practice too and I’m sure you’ll be very happy with result too!”
So this blog is all about how cases that show HOW dentists could land in hot water when it comes to cords and the obligation to report incidents.
CORDS as TRIPPING HAZARDS and REPORTING TO AN OHSA INSPECTOR
If you’re using a laser (like a biolase) in your office and that machine has electrical power cords running to the wall, guess what – you might have a tripping hazard! In the case of R. v. Grey Bruce Health Services, 2003 CarswellOnt 10494, Mary Wilson, an experienced registered nurse (EMPLOYEE) tripped and fell in CAT scan room at a hospital in Owen Sound (EMPLOYER). The only people in the room when Ms. Wilson fell were the patient and a radiologist. This all happened back in 1999. Basically, Ms. Wilson Wilson had moved a portable blood pressure monitor to the other side of the patient at the request of the radiologist. The monitor was now in high traffic area. At some point, Ms. Wilson tripped (although it’s unclear why; she assumes it was because of the cord) and suffered a 3 part fracture to her arm. Ms. Wilson contacted the hospital’s employee health department, which reported the incident to the Ministry of Labour a week later.
After a few days at trial, the Justice of the Peace overseeing the case wasn’t convinced about the cause of Ms. Wilson’s fall. That said, the Justice found that the hospital was an employer had failed to ensure that a work surface was kept free of obstructions and hazards and was fined $15k for that. The Justice also fined the employer $5k for not immediately reporting the incident. On appeal, these convictions were upheld.
Things to remember:
So this blog is all about a dentist’s obligations under the Occupational Health and Safety Act (“OHSA“) when it comes to infection prevention and control. In a previous blog, I talked about how infection prevention and control has become more prevalent due a Burlington dentist being shut down for not properly cleaning instruments before use.
Now, Ljubica Durlovska from our office has previously written about a dentist’s obligations under OHSA HERE. Here, I’m going to dig deeper into the legal obligations on EMPLOYERS, SUPERVISORS, and WORKERS under OHSA. And then in the next blog, I’m going to talk about how dentists can get into trouble by not adhering to these laws.
So let’s start off with the penalties, shall we?
Section 66(1) of OHSA says that everyone who fails to comply with OHSA is guilty of an offence and on conviction is liable to a fine of up to $25k and / or 1 year of jail. If a CORPORATION is convicted, it could be fined up to $500k!
An employer is someone who employs one or more WORKERS. And a WORKER is a person who performs work or supplies services for monetary compensation.
If a dentist is an employer, then their obligations include the following (section 25 of the OHSA):
A SUPERVISOR is someone who has charge of a workplace or authority over a WORKER. Section 27 of OHSA says that a person who is a SUPERVISOR of a WORKER (think: principal, associate, hygienist, office manager, etc.) has the following obligations:
A WORKER is a person who performs work or supplies services for monetary compensation. Section 28 of OHSA says that a WORKER shall:
Additionally, no WORKER shall:
This is just me ranting and raving… I get pissed when good, hardworking folks who try to build that ‘Canadian dream’ of having their own small business get taken to the cleaners by some far-off government people for the purposes of having SOMEONE pay for their ill-founded projects (one of which is an infrastructure plan with apparently no spending limit and another of which was a behind-closed door multi-million dollar settlement to a convicted terrorist).
And so the Trudeau Government is holding a consultation period over the summer to basically find out how to tax small business owners who legally pay family members through the use of a corporation (among other things). In media articles, it looks like they’re going after professionals – like dentists and doctors. And it also looks like they’ll be targeting DIVIDENDS that are paid to family members. The government has said that children in the 18-24 years age bracket appear to be best suited (given that they avoid kiddie tax rules and given that they don’t have high incomes) for income splitting strategies involving their parents.
Here’s the thing about DIVIDENDS: you can ‘sprinkle’ them on other shareholders – presumably in lower income tax brackets – in order to arrive at a lower effective tax rate on the whole (as opposed to one person taking all of the money for themselves). For dentistry and medicine professional corporations, they are VERY restricted in terms of WHO can be a shareholder: a dentist, their spouse, their parents, their children, or the dentist or their spouse in trust for a minor child. And guess who else can’t get dividends from dentistry and medicine professional corporations – that’s right: other corporations (because other corporations can’t hold shares in those corporations). And those dividends could have been transferred essentially on a tax-free basis if they were capable of going to another Canadian corporation. By the way: lawyers and accountants cannot split income using dividends with their family members (or anyone else) through their professional corporations.
So why is the government so unhappy with these dividends that are sprinkled on family members? It’s because they can be earned AFTER TAXES have been paid by the corporation on active business income AND THEN PAID to the shareholder WITHOUT the shareholder having to contribute in any way possible to the corporation. That’s right: a shareholder can simply sit back and collect money. With a professional corporation, family members who are shareholders BUT who aren’t the dentist or the doctor don’t get a right to vote, so they have even less say on what happens with the corporation.
Well, apparently, the Trudeau Government doesn’t want dentists and doctors to continue to be able to sprinkle such dividends on non-professional family members without paying more taxes. But this is so wrong for so many reasons, as follows:
Do we actually need new legislation? I’m not convinced. Why?
First, we already have a ‘reasonableness’ test when it comes to salaries paid to family members and whether the expenses to the corporation (i.e. those salaries and benefits) are considered ‘reasonable’. If they’re not considered ‘reasonable’ in light of the family member’s contributions to the corporation, their skill-set and experience, their time spent on the job, etc., then the CRA can deny / reduce that expense and have the corporation pay more income tax.
Second, we already have rules called the Personal Services Business (discussed HERE and HERE). which basically means that if you’re nothing more than an incorporated employee, you’ll be denied the tax benefits of having a corporation. The IT industry, for example, has been targeted heavily by this provision and the CRA has gone after so called ‘independent contractor’ IT personnel who were nothing more than incorporated employees.
There’s my rant.
Now, let’s take a brief look at what the government is proposing, shall we? You can find their discussion paper and draft legislation, as well as submit comments up to October 2, 2017 here: http://www.fin.gc.ca/activty/consult/tppc-pfsp-eng.asp and here: http://www.fin.gc.ca/n17/17-066-eng.asp
With respect to what they’re proposing, here’s the idea… They want to EXPAND the application of an existing tax. That tax is called a “Tax On Split Income” (“TOSI“). TOSI was introduced in 1999 and it applied to income, such as dividends on unlisted shares from a business activity of a related individual, earned by minor children shareholders (those under 18 years old). In other words: TOSI was kind of a kiddie-tax that applied to minors who received dividends through their parent’s professional corporation. If TOSI applied, that dividend income was subject to a top flat-rate person income tax in the hands of the minor while personal tax credits (except dividend and foreign tax credits) would be denied for those amounts.
Well, the Trudeau government now wants to make TOSI apply to dividend income earned by ADULT children shareholders. And they want to add a “reasonableness test” to determine if the income amount received by the shareholder is commensurate with what would be expected in a similar arm’s length arrangement. Finally, they’re introducing the definition of ‘connected individual’ to determine if an adult’s income from a corporation should be treated as split income. A Canadian resident individual with a certain measure of influence over a corporation would be treated as connected with the corporation.
In the next few blogs, I’ll be digging deeper on what these changes could mean to dentists IF they become law…
Stay tuned and don’t forget, if you’re not happy with these changes, to GIVE ‘EM HELL by sending your comments HERE: http://www.fin.gc.ca/activty/consult/tppc-pfsp-eng.asp.
David Mayzel is your legal risk manager. He is a trained courtroom lawyer and has spent many years resolving disputes both in and out of court. He knows how to prepare documents and execute transactions in a way that avoids or mitigates legal risks. He can be reached at 416.528.5280. or firstname.lastname@example.org.
Michael Carabash is your business law adviser. He is an entrepreneur at heart who helps you see the big legal picture. He drafts clear and effective agreements that protect your rights while promoting your interests. He can be reached at 647.680.9530. or email@example.com.
Ljubica Durlovska is your transition lawyer. She helps you with staff and associates, maintaining your corporation, and other business matters. She can be reached at 416.443.9280, extension 206 or firstname.lastname@example.org.
Jonathan Borrelli is your employment lawyer. He helps you with staff and associates matters, including hirings, terminations, switching staff to written contracts and resolving disputes. He can be reached at 416.443.9280, extension 204 or email@example.com.
Benjamin Kong is an experienced business law clerk. He assists David and Michael with corporate matters and purchase / sale transactions. He can be reached at 416.443.9280, extension 207 or firstname.lastname@example.org.
Julie Whitehouse is an experienced business law clerk. She assists David and Michael with corporate matters and purchase / sale transactions. She can be reached at 416.443.9280, extension 203 or email@example.com.
David, Michael, Ljubica, Jonathan, Ben and Julie are a truly dynamic team. Their diverse knowledge, skills, and experiences will help you get the best deal possible while promoting your interests and protecting your rights. You can read dentist testimonials here.