Employment and Social Development Canada (ESDC) issued a blunt warning to the trucking industry, reminding employers that misclassifying workers under the Driver Inc. model is illegal and will have consequences.
In a new video titled “Misclassification is illegal,” the department’s labor program outlines the growing problem of employee misclassification in road transportation and stresses that non-compliance with the Canada Labor Code will not be tolerated. The video explains what misclassification is, why it is prohibited, employer obligations, and the penalties for failing to comply, according to a Canadian Trucking Alliance (CTA) news release.
The initiative is part of Ottawa’s broader effort to clamp down on the Driver Inc. model, in which truck drivers are treated as independent contractors rather than employees. The practice allows some carriers to avoid obligations tied to overtime pay, vacation, employment insurance, and Canada Pension Plan contributions.
According to the CTA, the national non-compliance rate with Canadian labor law stands at 40% — and nearly 65% in Ontario.
“The level of abuse and non-compliance is no longer in question,” said Jonathan Blackham, CTA’s director of policy and public affairs. “It’s clear that ESDC needs additional resources to ensure workers are properly protected. The only thing left to do is ensure enforcement officials have the support and tools they need to uphold and enforce labor laws.”
Industry associations and labor advocates have urged the federal government to step up enforcement and increase penalties for violators.
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