In most industrialized countries, “non-standard” jobs are growing faster than well-paying, permanent, full-time jobs with single employers. Canada is no exception. In 2017, Ontario’s Changing Workplaces Review report estimated that just over 30 per cent of workers in Ontario were in low-paid precarious work of one kind or another.
Often — but not always — workers in temporary, casual and part-time jobs, whether in solo self-employment or holding multiple jobs, struggle with low pay and few benefits. They have limited control over scheduling and little job security.
Some are more vulnerable to precarious work than others. They tend to disproportionately be those with low levels of education, single parents with dependent children, newcomers to Canada, women, youth and people of colour. The COVID-19 pandemic drove this home, with members of marginalized groups more vulnerable to infection as they worked outside of the home.
Perhaps the greatest disadvantage facing these workers is that they are excluded from the basic employment standards protections to which other workers are entitled.
Many of these workers take jobs in the gig economy, working for digital platform companies such as Uber. These jobs can be attractive to workers who are trying to juggle a range of obligations. However, low pay, no benefits and few protections against job losses and reprisals make this work very difficult.
Perhaps the greatest disadvantage facing these workers is that they are excluded from the basic employment standards protections to which other workers are entitled. App companies like Uber that classify their workers as independent contractors rather than employees don’t have to pay minimum wage, holiday pay, overtime, severance, Workers’ Compensation, sick pay, or EI and CPP premiums. That means that there is a competitive advantage to denying employees the rights they are entitled to in law.
Employee misclassification isn’t a problem that emerged with ride-hail services or app-based food delivery; this has long been a tactic in the construction and long-haul trucking industries. Technology and the pandemic have only fuelled its spread. As work in more and more industries and occupations moves onto digital platforms, the gig model of misclassification is spreading to more classes of work and professions, including health care.
To be sure, policy-makers are beginning to look at ways to support gig workers. Some provinces, including Ontario, have floated the idea of expanding limited labour protections to gig workers. And in the federal jurisdiction, representing approximately 10 per cent of the Canadian workforce, “contract” workers who believe they are actually employees can challenge their status. Employers have been prohibited from misclassifying employees in order to avoid their obligations since 2018. Moreover, if there’s a complaint and it goes to a hearing, the burden of proof is on the employer to demonstrate the worker isn’t their employee.
While welcome, this sort of approach unfortunately won’t change much. The problem is that in most cases, vulnerable, low-paid workers don’t have the time and means to make a complaint and follow it through against an employer with deep pockets. They may not even know they can challenge this.
What is really needed to stop the spread of misclassification is to start with the presumption that a worker is an employee, unless a case can be made that they are a bona fide independent contractor. A clear and relatively simple test can be established to determine whether someone is a legitimate contractor — i.e., do they set their own prices, perform work that is not the company’s “core” business, and have their own business doing the same work that they market independently? — or a misclassified employee.
California implemented this approach in 2020. In Canada, this same approach was recommended by a 2019 expert panel on federal labour standards. It should now be added to the Canada Labour Code as well as the Employment Insurance Act and the Canada Pension Plan statute that determines whether an employment relationship exists.
The pandemic has exposed many existing gaps in our society, widening some even further. The federal government can take a stand against precarity and inequality and eliminate misclassification that will make a clear, positive difference in vulnerable workers’ lives.
