Misclassifying truck drivers is illegal, ESDC warns employers
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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What I don’t understand is that large transport companies are complaining about Driver Inc. But they don’t clean their own house. They should first look within their own companies.
Well … here’s a blunt response for ESDC:
Misclassification may very well be illegal, but ESDC and all their accomplices, are never going to catch them all, let alone enough to make a dent. All of them together simply do not have the manpower to make a difference. Added to that is that the justice system takes forever to get anything done, and the thought of eradicating Driver Inc., along with ESDC’s “blunt warning”, become nothing more than bad laugh lines at a dumpster fire comedy show.
For those rare few that do get caught, the punishment, a fine, is simply the cost of doing business. A well-known contributor to this magazine once calculated that any carrier that owns 5 trucks breaks even for the year if they get caught. Think about that.
The solution is simple, and everyone knows it. Require the issuance of a T4A, and require evidence of the issuance of that T4A at tax time. We live in a digital world. Cross referencing the issuance of a T4A with the personal filing of said T4A is not rocket science. Mankind put a monkey into space. This, is not that hard.
The problem is the political will to stem Driver Inc. in this industry, or any other for that matter, simply does not exist. There are far too many voters in key geographical areas that enforcement would alienate to earn the wrath of a government, any government.
So, to the ESDC, and all of their accomplices, I say this; Do something meaningful about Driver Inc. I dare you. I double-dog dare you !!!
What i not understand is why everyone whole filed as Driver Inc in 2024 and stay getting paid this way in 2025 is not being put under a full review. Why is not B C Sask and M.B not reviewing each trucking and delivery service for this to get their insurance renewed. ON
Alberta should set up a gov insurance with the help of the other parts of the country and Ont should put up 500 million to set up a insurance group that will only insure Truck Bus and Taxi companies that pay all employees hourly on payroll
And retest 10% of the drivers each year and companies that charge $25 000 to $50 000 for a job be shutdown.