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Independent Contractor Misclassification Risks for Canadian Employers

Posted on 9 August 2017
Independent Contractor Compliance in Canada

Some Canadian employers believe the risks of independent contractor (IC) misclassification are more pronounced for U.S. companies than Canadian firms. While the legal and regulatory environment in Canada is, of course, different than in the U.S., recent case outcomes in Canada have reinforced the need for Canadian employers to focus on IC compliance.

Keep reading below for specific examples of why Canadian employers need to be cognizant of IC compliance efforts – and have a compliance program in place to help them avoid legal and financial penalties.

  • Actions Speak Louder than Words: Dependent Contractor Owed Notice of Termination (from Koskie Minsky LLP)
    When the British Columbia Supreme Court determined one worker should be categorized as a “dependent contractor” instead of an “independent contractor,” the company that engaged that worker was required to pay 12 months of salary in lieu of termination notice. In this case, the relationship between the worker and the company changed significantly during the worker’s tenure. This case reinforces the need for companies to constantly re-evaluate engagements when circumstances change to ensure they remain compliant with their independent contractor engagements.
  • Uber Drivers are Employees, Not Contractors, Canadian Lawsuit Argues (from the Financial Post)
    Just like many other companies who rely on a workforce with many independent contractors, Uber has been facing legal actions around the world due to the way they classify their workforce. This is no different in Canada, where Uber drivers recently proposed a class action lawsuit seeking $200 million in damages for those who’ve driven in Ontario since 2012.
  • Father Living off $3.32 an Hour Launches Class Action Against Energy Giant (from The Star)
    It’s not only new, start-up, “gig-economy” employers who face significant penalties from independent contractor misclassification. The established multi-national corporation Just Energy is one such company also facing potential consequences. Canadian employers should take note; no company, whether it engages one or 1,000 independent contractors, is immune from the consequences of independent contractor misclassification.

If your company does not have an independent contractor compliance program in place, contact the experts at iWorkGlobal. Whether you engage independent contractors across Canada, in all 50 U.S. states, or anywhere else around the globe, we can help make sure your company remains 100% compliant with all local requirements.

Contact iWorkGlobal today to get started.

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