Misclassification

What Does it Mean to Misclassify a Worker?

Sometimes, a would-be employer asks you to sign a contract that states you are an “independent contractor” and not an employee. Independent contractors might enjoy certain tax benefits as self-employed individuals, but they lose the protections of employment standards legislation, such as the Employment Standards Act. Whether or not an individual is a true independent contractor (and not an employee) is often a contested issue at termination—independent contractors are not protected by law that guarantees employees a certain amount of “notice” (often paid out as a severance package) before their employment is terminated.

As well, independent contractors are not eligible for employment insurance benefits,* Canada Pension Plan Disability benefits, and employment standards protections such as limits on hours of work, overtime pay, minimum wages, etc.

How Do I Know If I have Been Properly Classified?

In order to determine whether or not a person is an employee or an independent contractor, courts look to factors such as:

  • who controls the working environment;
  • who owns the tools needed to complete the work;
  • who stands to profit or risks a loss; and,
  • how integrated is the worker into the organization?

At the end of the day, the question really turns on “whose business is it?”. In other words, is the worker in business for themselves, or are they working for the employer?

Why You Should Contact Us

If your employer has misclassified you as an independent contract when you are in fact an employee, you could be owed overtime pay, unpaid wages, holiday and vacation pay, and, in the case of termination, a severance package. If you think you have been misclassified, contact us to arrange for a consultation to discuss the merits of your case and the damages you may be owed.

* self-employed workers can choose to enroll in these programs themselves, provided they pay the requisite contributions.

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