'The legislation proposes to transform individuals who are typically engaged as independent contractors'
Workers who are currently operating independently in B.C. will be seeing some new rules soon that will affect both their own, and their employer’s bottom-line.
The provincial government has tabled legislation that will force app-based employers to pay workers a certain minimum amount.
“For those operators in ride-sharing, and in food-delivery services, it’s going to be a significant change because the legislation proposes to transform individuals who are typically engaged as independent contractors, to be classified as employees for certain purposes under the Employment Standards Act,” says David Price, an associate in the employment and labour group at Stikeman Elliott in Calgary.
Under Bill 48, employers will have to pay workers 120% of the provincial basic minimum wage when they are “engaged.”
It’s expected to affect a significant number of persons in the province, according to Price.
“That’s going to affect — at least according to the government of British Columbia’s numbers — almost 40,000 workers.”
The total number of Canadians employed as gig workers jumped sharply, year over year, according to another survey.
New categories in store for organizations
But what exactly does this mean for employers and how they allocate pay to these workers?
“So that time the worker perhaps accepts an assignment, so food-delivery requests, and they accept it and they’re on the clock, all the way until the delivery is completed. That’s going to be the biggest [change] because right now, I think most of these are paid on a delivery-by-delivery basis,” says Price.
For organizations, this might bring on a major change to the relationship with workers, he says.
“For companies, it’s going to almost cause this third category of individuals, between the contractor status and between the full-employee status, because there’s still going to be things like overtime, or vacations, statutory holidays, that are not going to be applied at this point in time to these gig workers.”
“That is going to create some complexities for employers in terms of how do we deal with these people at the taxation level? Are they employees for purposes of income tax all of a sudden?” says Price.
This law, which is expected to be enacted as a change to regulations in the Employment Standards Act, will force many organizations to ask some hard questions regarding the gig workforce.
“In many cases, these people are holding down two or three jobs and are in fact, true contractors: ride sharing or food delivery is a side gig for them. That’s why it’s called a gig economy. This stage of the legislation, I think is going to cause some great concern to companies that operate in this space and how they’re going to be [impacted]: Do we need to withhold payroll taxes, for example? Do we need to redo our independent contractor agreements and create some middle-way contracts?”
Not the end of the changes
And the government might not be done, according to Price.
“Now we’re also starting to have to consider, what’s the compensation standard about reimbursing workers for the costs of using their personal vehicle? Is that just going to be gas? Is it going to be wear and tear? Is it going to reflect a CRA mileage deduction, for example? How is that going to be treated as a taxable benefit by the Canada Revenue Agency?”
“I also think the government’s carved out the opportunity down the road to apply these other things like overtime, holidays, vacations, at a future date. So I think, it’s probably the start of more to come, and they’re going to react relatively quickly to this,” he says.
For HR professionals who will be facing an entirely new category of workers, besides the obvious requirement of speaking with an employment lawyer, they should be taking a look at other areas that might require amendments to contractor agreements, says Price.
“How is this going to impact them with the Canada Revenue Agency? How is this going to impact them maybe on health and safety matters? And things that they’re not obviously thinking about?”
