Canadian Trucking Firms Misclassifying Drivers Without Penalty, Investigation Alleges

What’s Happening?

Canadian trucking firms are allegedly using “self-employment” to get around classifying workers as employees, according to a major investigation by The Globe and Mail.

The Canadian Trucking Alliance (CTA), which represents thousands of companies across the country, currently estimates that employee misclassification allows some trucking firms to reduce their labour expenses by approximately $22,000 per year on a single driver earning $80,500.

“Law-abiding carriers are forced to compete with those who gain an unfair cost advantage by misclassifying workers,” the CTA said in a submission to the House of Commons transport committee.

Through access-to-information requests, The Globe found that the number of “self-employed” drivers more than doubled between 2011 and 2021 — representing around a fifth of the industry nationwide by 2021.

In recent years, the federal government has introduced a variety of robust measures to tackle employee misclassification in the trucking industry, including:

• Changing labour laws to explicitly prohibit the practice.
• Allocating $77-million to the Canada Revenue Agency to increase scrutiny of trucking firms’ payments to contractors.
• Creating a specialized unit at Employment and Social Development Canada to root the practice out.

Ministries across provincial and federal governments collect exhaustive data on different parts of the trucking sector. However, little is shared between agencies on a formal basis — creating regulatory gaps that some companies exploit.

Certain Trucking Firms Skeptical About Findings

Steve Laskowski, president of the Ontario Trucking Association, claims it’s “impossible” for the data obtained by The Globe to reflect an uptick in legitimate owner-operators.

The Canada Truck Operators Association has also argued in its own federal submissions that the country’s most powerful fleets have weaponized the misclassification issue to drive out competitors.

Key Takeaway for Employees in Canada

Regardless of what industry you’re in, Canadian law is clear when it comes to employee misclassification.

“It’s apparent many companies hire employees through corporations with the mistaken belief that this somehow relieves them of all their legal obligations under employment standards legislation,” Jon Pinkus, Partner at Samfiru Tumarkin LLP, said in a statement.

“Given that these drivers aren’t in business for themselves, but for certain trucking companies, they’re employees — entitling them to severance pay and other protections.”

SEE ALSO
• Major Severance Payout for Misclassified Tow Truck Driver
• Pizza Hut Facing $150M Class-Action Lawsuit Over Misclassification

Disclaimer: The materials above are provided as general information about the rights of non-unionized employees in Canada. It is not specific to any one company and SHOULD NOT be read as suggesting any improper conduct on the part of any specific employer, or a relationship between Samfiru Tumarkin LLP and a specific employer.