Employee misclassification is a common issue in employment law that can result in significant financial consequences to the employer. Specifically, an employer may expose themselves to liability under the applicable employment standards, including in relation to unpaid wages, overtime pay, vacation pay, termination pay and Canadian Pension Plan and Employment Insurance contributions if a court finds that an employee’s role has been inappropriately classified.
Hiring an employee is an expensive proposition. Employees must be trained, they must be paid regardless of their productivity while they are employed, they have many rights under the law including workers’ compensation coverage, and terminating a difficult employee can be a costly nightmare. In an age of constantly increasing regulation, many businesses are turning to independent contractors to complete work for them because they usually need minimal training and can be acquired or dismissed as the situation warrants.