Summary#

Bill 28, the Preventing Worker Misclassification Act, 2021, would amend Ontario’s Employment Standards Act, 2000. Its stated goal is to prevent workers from being misclassified as independent contractors; the bill would start on Royal Assent.

• A person paid directly or indirectly to do work would be deemed an employee for purposes of the Act, unless the hiring party proves that all three tests are met for the whole time the work is done: the person is free from control in the contract and in practice, the work is outside the hiring party’s usual business, and the person is independently established in the same kind of trade or business.
• A separate exception would apply to a business contracting with another business only if the hiring business proves all 15 listed conditions. These include a written contract, independence from control, other clients, public advertising, the ability to negotiate rates and set hours, and providing its own tools and equipment.
• That business-to-business exception would not decide whether an individual worker doing work for the second business is an employee. The three-part test would still apply to that individual.
• The Lieutenant Governor in Council could make transitional regulations. The bill does not itself set out those transition rules.

What it means for you#

• Workers: If you are paid to do work, the bill would presume you are an employee for purposes of the Employment Standards Act unless the hiring party proves all three conditions. This could affect whether employment standards protections apply, but the bill does not list or change specific protections.
• Businesses hiring workers: You would have to establish all three conditions to avoid the employee presumption. The test looks at both the contract and what happens in practice.
• Businesses contracting with businesses: The 15-condition exception would apply only if the hiring business established every condition. It would not shield the hiring business from the separate test for an individual worker.
• General public: The bill does not create a new agency, a fine, or an application or review process.

Money#

No cost information is in the available material.

• The bill gives no estimate of public spending, staffing costs, business costs, savings or lost revenue.
• It sets no fee or fine. It does not state that money would be appropriated.

What is unclear#

• The current Employment Standards Act, 2000 was not supplied, so I could not verify how the bill’s tests would compare with current law or which existing protections turn on employee status.
• The bill does not define terms such as “usual course” of a business or “independently established.”
• It does not set out how a hiring party must prove the tests, how disputes would be decided, or what evidence would be needed.
• The bill allows transitional regulations but does not say what they would contain.
• It is unclear how the new tests would interact with other existing rules or programs.

Case for#

• The bill appears intended to make it harder to label a worker an independent contractor when the actual working relationship is employment.
• A possible argument for the presumption is that the hiring party must establish the conditions for treating someone as outside employee status.
• The separate business-to-business exception recognizes contracting arrangements that meet detailed independence conditions, while keeping the individual-worker test in place.

Case against#

• One concern is that key terms in the tests are undefined, leaving uncertainty about how they would apply to particular working arrangements.
• The business-to-business exception requires proof of all 15 conditions. That could exclude some genuine independent businesses that do not meet one or more of them.
• The bill does not explain how disputes would be handled or what evidence would be required, making the practical effect difficult to assess.