Page 38 - Best Magazine Winter 2017

ECONOMÍA Y FINANZAS
INDEPENDENT CONTRACTOR
OR EMPLOYEE?
BY ANTONIO F. URDANETA, LL.M, BARRISTER
ntario’s Employment Standards Act, provides his or her own tools/equipment and/ 2000 (“ESA”) provides all “employees” or hires his or her own helpers; the worker's (unless exempted by ESA Regulation) degree of responsibility for investment and with various minimum entitlements, management in performing his or her tasks;
including 4% vacation pay; public holiday pay; and the degree of financial risk taken by the
An Employment Standards Officer (“ESO”) from the Ministry of Labour (“MOL”) is empowered to issue a Notice of Contravention (“NOC”), which imposes an administrative monetary penalty, where the ESO finds a contravention of the ESA. ESOs may also issue compliance orders, ordering that a person cease contravening the ESA and directing particular actions. Further, ESOs may initiate a prosecution under Part I (“tickets”) of Ontario’s Provincial Offences Act (“POA”) or recommend a prosecution under Part III of the POA. The final decision to prosecute under Part III rests with the Ministry of the Attorney General (“MAG”).
If you are a business who uses “independent contractors”, beware. Will that classification stand up to scrutiny? Talk to your lawyer. Assess your situation, and make the changes required in time.
In addition to the risks raised by the legislative changes above, MOL is expected to increase its ESA enforcement efforts. Since, according to experts, the industries of trucking, cleaning, and food-delivery, see a lot of questionable misclassification, these industries may be targeted for workplace investigations.
overtime pay; termination pay; and severance pay. Employees are also entitled to employer- contributions for Employment Insurance (“EI”) and the Canada Pension Plan (“CPP”). Although not required by law, employees and job applicants may also expect other employment benefits, such as extended health and disability coverage, private pension contributions, etc.
In an effort to avoid the obligations above, some businesses enter into “independent contractor” agreements with persons who are, in essence, employees. This is known as “misclassification”.
But labeling someone an "independent contractor" is not determinative. Although there is no universal legal test to determine whether a person is an employee or an independent contractor, the key question is whether the worker/contractor is performing services as a person in business on his/her own account. In making this determination, factors to consider include: the level of control the employer/business has over the worker/ contractor's activities; whether the worker
worker and his/her opportunity for profit.
The ESA did not really address misclassification. (Businesses were at risk of an independent contractor suing the “employer” in court, seeking employment-related entitlements, such as, reasonable notice of termination; and in those court cases, the burden of proof or persuasion was on the “employee”.) This has now changed.
BILL 148
On June 1, 2017, the Ontario government tabled the Fair Workplaces and Better Job Acts, 2017 (“Bill 148"). Bill 148 received Royal Assent (become a binding law in Ontario) on November 27, 2017.
Bill148'snewsection5.1makesmisclassification an offence, leading, potentially, to penalties including fines, prosecution and public disclosure of convictions. Moreover, for the first time, the burden of proof will be on the alleged employer.
38 THE BEST MAGAZINE WINTER 2017 - 2018
ECONOMY AND FINANCE
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