By the Canadian Trucking Alliance
TORONTO, Sept 7, 2022) – Today, the Labour Program at Employment and Social Development Canada (ESDC) released another statement on Driver Inc. misclassification. This follows statements made earlier this year by the Federal Minister of Labour, Seamus O’Regan, in the House of Commons condemning the Driver Inc. scheme. In today’s statement, the Labour Program once again reinforced its commitment to protect and strengthen federal labour standards by monitoring and addressing misclassification of employees in federally regulated industries, particularly in the road transportation sector.
The Incorporated Drivers Business model, known as Drivers Inc., is a practice whereby certain road transportation carriers establish working agreements that avoid or bypass labour laws, by treating drivers as independent contractors rather than employees. Misclassification prevents employees from accessing important protections and benefits (e.g., vacation pay, general holiday pay, overtime, and rights on termination of employment) under the Canada Labour Code (the Code). When misclassification occurs, employers may face enforcement measures and penalties.
ESDC is reminding carriers and drivers that as of January 2021, new measures were introduced under the labour standards provisions of the Code that prohibit an employer from treating employees as if they were not employees to deprive the worker of their rights under the Code. Employers who do not properly classify their employees may be subject to various enforcement measures, such as payment orders for any wages and other amounts owed to employees. Additionally, they may be found to have intentionally misclassified employees and be subject to further enforcement measures, such as compliance orders, administrative monetary penalties and prosecution.
This message comes on the heels of an ongoing enforcement pilot that was launched by ESDC to combat Driver Inc. in the Ontario Region. Today’s statement from ESDC notes that the results of this enforcement pilot have shown that “misclassification is wide-spread” and that the federal government has begun to increase enforcement measures when it comes to Driver Inc. ESDC also states that the Labour Program will be expanding its enforcement efforts nationally as part of a compliance strategy aimed at Driver Inc.
The Canadian Trucking Alliance (CTA) is reminding all carriers that the Driver Inc. scheme is considered purposeful misclassification under the Canada Labour Code and carriers involved will face enforcement action from the Government of Canada if they are found to be in noncompliance. Drivers working for Driver Inc. companies may also be eligible for back payment for entitlements under the Labour Code, such as vacation pay, general holiday pay, overtime and more.
See the full message from ESDC below:
The Labour Program continues its efforts to protect and strengthen federal labour standards by monitoring and addressing misclassification of employees in federally regulated industries, particularly in the road transportation sector.
The Incorporated Drivers Business model known as Drivers Inc. is a practice whereby certain road transportation carriers establish working agreements that avoid or bypass labour laws, by treating drivers as independent contractors rather than employees. Misclassification prevents employees from accessing important protections and benefits (e.g., vacation pay, general holiday pay, overtime, and rights on termination of employment) under the Canada Labour Code (the Code). When misclassification occurs, employers may face enforcement measures and penalties.
Many stakeholders have raised concerns regarding this issue. We know the employment relationship can be complex and the Labour Program is here to help you understand your responsibilities as an employer and to know your rights as an employee.
Know your obligations and rights
Starting in January 2021, new measures were introduced under the labour standards provisions of the Code that prohibit an employer from treating employees as if they were not employees to deprive the worker of their rights under the Code.
Employers who do not properly classify their employees may be subject to various enforcement measures, such as payment orders for any wages and other amounts owed to employees. Additionally, they may be found to have intentionally misclassified employees and be subject to further enforcement measures, such as compliance orders, administrative monetary penalties and prosecution.
To help you determining if an employer/employee relationship exists, please visit this page.
What We Are Doing
In the past year, the Labour Program has been conducting a pilot enforcement project in the Ontario Region to help determine the extent of this practice. We have learned that misclassification is wide-spread and have begun increasing enforcement measures.
Starting in the fall, the Labour Program is expanding this initiative to other regions. This national compliance strategy will:
spread the word on misclassification as a prohibited practice;
- conduct outreach with partners to promote good employment practices;
- increase proactive inspections; and
- continue enforcement activities with non-compliant employers.
Please share this message with your members and partners to spread the word.
Resources
For more information or additional guidance on misclassification, please consult the following pages or contact the Labour Program at 1-800-641-4049.
Misclassification – IPG-105 - Canada.ca
Thank you for your continued support in making this initiative a success!
Compliance, Operations and Program Development
Labour Program
Government of Canada