A new law on the horizon for worker classification?

The federal government is in the process of introducing new legislation that may affect the classification of federally regulated workers.

Among other things, the proposed amendments would strengthen the ban on misclassifying federal workers to avoid the provision of minimum labor standards set out under Part III of the Canada Labour Code.

Why is a worker’s status relevant?

A worker’s legal entitlements during and upon the end of their engagement vary based on whether they are classified under law as an employee or an independent contractor.

For example, the minimum labor standards set out under Part III of the CLC do not apply to independent contractors, but are applicable to employees. This includes standards relating to hours of work, overtime pay, and the dismissal of employees.

The law treats independent contractors differently and, generally speaking, independent contractors have less legal protections and entitlements than employees under applicable laws.

Proposed amendments to the CLC

The proposed legislative amendments would introduce a presumption that a person who is paid remuneration by an employer is an employee unless the contrary is proven by the employer.

It would also make it an offence for an employer to treat a person who is classified in accordance with the law as an employee as if they were an independent contractor. A worker who believes they have been misclassified as an independent contractor and treated by an employer as if they were not an employee would be able to file a written complaint with the Head of Compliance and Enforcement at the Labour Program.

How will proposed law affect trucking?

Where a federally regulated employee is misclassified as an independent contractor, the employer’s failure to take steps to ascertain — or the employer’s lack of awareness about the proper classification of their workers — will not absolve the employer of any liabilities resulting from the incorrect classification of its employees. 

If the proposed legislation comes into effect, trucking companies operating under federal regulations should review their contracts with drivers and obtain legal advice on the proper classification of these workers.This proactive approach can help trucking companies avoid costly and unpleasant legal surprises. 

Employers should have their independent contractor agreement templates reviewed regularly to ensure compliance with the law.