Gig workers are a growing part of the Canadian economy. A recent Statistics Canada report estimated about 1 in 10 Canadians in the workforce (1.7 million people) are gig workers.
Canadian organizations need to stay alert to potential legislation governing gig workers. Even organizations engaging individuals that they consider to be independent contractors may find themselves facing new rules and requirements. That’s because Canadian governments have begun to turn their attention to gig workers, and to consider ways to regulate the expanding gig economy.
Compliance Works is online legal information platform designed to help HR professionals and business leaders stay alert to changes in Canadian federal and provincial employment law. Lesha Van Der Bij, CEO and co-founder of Compliance Works, takes a look at the current legal environment affecting organizations utilizing gig workers.
Gig Workers vs Employees
The gig economy tends to refer to work performed “on-demand” or through a platform like Uber. The work is usually task-based work and provides no guaranteed minimum hours. Gig workers are typically considered to be independent contractors, as opposed to employees. However, an initial question to consider is whether these gig workers are in fact independent contractors or are they more aptly described as employees or dependent contractors?
Whether a person is an independent contractor is determined by factors governing their relationship with the business. Some key questions to consider include:
- Does the person work exclusively for the paying organization?
- Does the organization exercise control over how, when and where their work is performed?
- Does the organization provide the worker with tools or equipment?
- Does the organization take on risks of profit and/or loss associated with the person’s work?
Answering yes to the above questions indicates that the worker is probably more akin to an employee, or at least a dependent contractor, than an independent contractor. That said, whether someone is an independent contractor or employee is determined by the facts that apply in the specific circumstances. If you are unsure whether a person is an independent contractor or employee, it is best to seek legal advice.
Government Response to the Rise of Gig Workers
Since gig workers tend to exist in a “grey area” – somewhere between employees and independent contractors – it is not always clear whether employment standards legislation applies to them. The federal government and some provinces have begun considering whether these workers need further legislative protection.
1. Federal – Canada Labour Code
The Report of the Expert Panel on Modern Federal Labour Standards (published in 2019) was one of the first government-initiated reviews in Canada to include recommendations regarding “non-standard” (i.e., gig) workers.
One of the Panel’s recommendations is aimed squarely at resolving the ambiguous status of gig workers . They recommended that the federal government amend the Canada Labour Code (the Code) to clarify who is an “employee”, “independent contractor” and “dependent contractor”. The Panel proposed adding definitions to the Code which would:
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- presume any person who performs labour or supplies services for monetary compensation is an employee unless the hiring organization can prove otherwise;
- establish an independent contractor test (similar to the factors noted above);
- deem dependent contractors to be employees.
The panel also called for further consultation regarding a portable benefits model to provide certain types of health and retirement benefits to workers regardless of their employment status.
While these are only proposed changes, it is worth noting that at least one of the Panel’s recommendations – to establish a federal minimum wage – has already been implemented by the federal government. And the federal government revisited the rights of gig workers in 2021, when it launched additional consultations on the topic. So, federally-regulated employers will want to watch out for further developments regarding non-standard or gig workers.
2. Ontario – Digital Platform Workers’ Rights Act, 2022
Ontario is the first province to pass legislation, which includes provisions aimed at gig workers. Bill 88, Working for Workers Act, 2022 will establish an entirely new Act – Digital Platform Workers’ Rights Act, 2022 – for workers who perform digital platform work (e.g., providing ride share, delivery, or courier services for payment based on assignments through a digital platform). This new Act, which will come into force on a date to be determined, includes requirements related to:
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- Information: Digital workers must be advised of:
- how their pay is calculated;
- if and how tips/gratuities are collected;
- pay periods;
- factors used to determine work assignments; and
- if and how it uses a performance rating system.
- Pay: Digital workers have a right to a recurring pay period and pay day, as well as minimum wage and tips/gratuities.
- Access Removal: If a digital worker loses access to a platform, they must be advised in writing of the reason why they have been removed.
- Reprisals: Digital workers are protected against reprisals (e.g., intimidation, penalties).
- Records: Operators must retain specified information on each worker.
- Director Liability: Directors will be jointly and severally liable for amounts owing to digital workers.
- Enforcement: Detailed enforcement provisions mirror those in the Employment Standards Act, 2000, including complaints, orders, collections, offences and prosecutions.
- Information: Digital workers must be advised of:
Certain details, including the scope of digital platform work covered by the the new Act, will be clarified in future regulations. In the meantime, Ontario businesses offering work assignments through any kind of digital platform should keep this pending Act in mind.
3. British Columbia – Early Stage of Review
British Columbia is at the very early stages of its review of gig work. The province announced that it is consulting with gig workers and businesses that hire gig workers regarding employment standards. In particular, the B.C. government indicated that it wants to hear from app-based ride-hailing and delivery workers.
The government’s overview of its precarious work strategy also indicates that it will explore the feasibility of benefit and pension plans for workers who do not otherwise have coverage.
What’s Next for Businesses that Utilize Gig Workers?
The pandemic helped to accelerate the pace of change in Canadian workplaces. This includes gig workers who have increasingly become a part of the language of work. With these changes, comes additional scrutiny from governments. It is still early days, but businesses can expect to see governments respond with additional regulation of what (to date) has been a largely unregulated component of Canadian workplaces.
How Compliance Works Helps HR Professionals
Compliance with constantly changing employment laws and ongoing changes can be challenging and time consuming. Compliance Works not only explains current employment legislation, but also stays on top of new and emerging areas – like upcoming laws governing gig workers.
Contact us to Request a Demo , subscribe to Compliance Works publications, or email us at info@complianceworks.ca to learn how a paid subscription to Compliance Works can help your HR team succeed.
