MISSISSAUGA, Ont. – Kim Stoll, a transportation lawyer with Fernandes Hearn LLP, had some strong advice for truckers operating under the Driver Inc. model, which she offered at the ISB Global Biz and Breakfast Nov. 13.

“I know it sounds ominous, but they are coming,” she said of Canada Revenue Agency (CRA). “And rightfully so, because Driver Inc., when set up in that manner is a sham. It rips off drivers and it rips off taxpayers.”

Driver Inc. is the controversial employment model that categorizes company drivers as independent contractors, allowing employers to sidestep source deductions and drivers to claim tax benefits they’re not entitled to. In Ontario, the Workplace Safety and Insurance Bureau has begun cracking down on trucking companies who’ve adopted this model, but so far CRA has not gone after drivers who are in such employment arrangements. Stoll thinks that will soon change.

She urged drivers in that scenario to review the CRA website to determine if they are truly an independent contractor. It’s spelled out quite clearly here.

“The taxman will come,” she warned.

Asked if drivers will have any legal recourse against their employer, if they’ve been led to believe this arrangement is legal, Stoll was skeptical.

“We haven’t seen that yet. I’m sure that will come,” she said. “Everybody is responsible for their own activity…You’re responsible for the decisions you make and the contracts you sign.”

But she said drivers may file civil cases against their employers, on the grounds of “undue influence or some sort of employment contract breach.”

Surviving a facility audit

Jodi Burness, owner of Burness Paralegal Services, offered advice on surviving an MTO facility audit.

“There are two reasons a facility audit is conducted,” she said. “You invited the MTO into your house, or they’re there because of an event.”

‘Events’ could include a catastrophic crash, or a high CVOR violation rate. “That’s going to change the mood of the auditor coming in,” she warned.

MTO auditors are allowed to show up without warning and to begin asking questions, Burness warned. Some fleets with conditional CVOR ratings will invite the MTO in for an audit, in order to improve their safety rating. Before doing so, suggested Burness, “You absolutely need to make sure your house is in order.”

She recommends arranging a pre-audit with a reputable firm.

“If there is a sense you will not pass, make sure you have a conversation with the person you engaged, that they are not going to create paperwork as a result of their findings,” she urged, adding you don’t want a report of their findings, which could serve as a roadmap of your weaknesses if obtained by the MTO auditor.

Before the MTO auditor arrives, Burness warned to have all documents in order and available. In fact, she said, start the communication process with the auditor the moment they first provide notice of the audit. She also said any material you produce could be used as evidence against you in the event of a trial if charges are laid.

Burness said to ask questions of the auditor and don’t be afraid to write down their responses in front of them. “Let them see that you are putting that answer in writing.”

Stoll added, “Make sure you’ve had policies and procedures vetted by people who know what they’re doing. Make sure everything is done properly, that you have gone over the policies, and that you are following those policies.”

She said having policies reviewed by an expert, and keeping them regularly updated, is money well spent.