Recent cases confirm that calling someone an independent contractor doesn't make them one — and misclassification can be costly
'You can't just create a relationship in the mold that you want'
Recent cases confirm that calling someone an independent contractor doesn't make them one — and the costs of misclassification can reach far beyond termination
Two Ontario labour board decisions released this summer landed on the same conclusion by different routes: the worker was an independent contractor, not an employee, and was therefore owed nothing in termination pay.
While good news for employers, the cases are also a reminder of the persistent challenges of properly defining an employment relationship.
What consistently trips employers up is assuming the label they've applied will hold, according to Joshua Lerner, partner at Lerners LLP.
"You can't just create a relationship in the mold that you want, that you think is beneficial for your business,” he says. “[Employers] think they can just hire these workers in the form that they want without thinking about the repercussions of that.”
It pays for employers to be proactive about the issue, according to Leena Yousefi, CEO of YLaw.
"The law is really moving towards presuming that everybody is an employee unless the employer can prove otherwise. So, it's becoming more common for a lot of independent contractors to be considered employees — regardless of the contract or mode of payment and things like that.”
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