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.
Employee vs. independent contractor
It is essential that employers understand and consider the risks of misclassifying employees as contractors, even when the individual themselves is the one requesting or proposing the contractor relationship.
Why reinvent the wheel? Drafting employment contracts, policies, termination letters and releases based on a past precedent is often a good place to start. It is usually both time and cost efficient, and for someone unfamiliar with the document, it’s a great learning opportunity. When using a precedent or online resource, here are the top 3 tips to ensure the document is legally enforceable in your workplace.