Driver Inc. employers face $250K fines, labour minister warns
Trucking companies that use the Driver Inc. business model to misclassify employed truck drivers as independent contractors will face federal fines of up to $250,000, Labour Minister Seamus O’Regan, Jr. announced in Toronto on Nov. 7.
Workers pay for social programs and businesses benefit from it, the minister said in Ontario Trucking Association offices, adding that almost all employers contribute.
“We are putting the free riders on notice. They take advantage. We are going to hold them accountable for their wrongdoing, and where necessary, we are going issue fines to bad actors.”
The federal government had vowed in its Fall Economic Statement to take aim at Driver Inc. employers.
“In the trucking industry, there is a long history of companies using the misleading Drivers Inc. practice, whereby drivers are encouraged to self-incorporate and operate as independent contractors without being provided information on the downsides of the practice,” the feds wrote in the statement, delivered by Finance Minister Chrystia Freeland.
“By not classifying drivers as employees, companies are denying them access to important rights and entitlements under the Canada Labour Code, such as paid sick leave, health and safety standards, employer contributions for Employment Insurance and the Canada Pension Plan, and provincial or territorial workplace injury compensation.”
It indicated a recent pilot enforcement project found that more than 60% of federally regulated transportation employers fell into this category. The economic statement proposed to provide $26.3 million over five years, beginning in 2023, to take stronger action against non-compliant employers through Employment and Social Development Canada.
O’Regan said he wanted to make sure the fines “have bite and they hurt. I am talking about companies who are abusing workers’ rights.”
Employees not targeted
But the minister said the measures were not aimed at employees.
“There are a number of truckers who make the decision to be independent, to be contractors. That’s fine,” he said. “We are not aiming this at employees. This is aimed at bad employers, and not at employees of bad employers.”
O’Regan said many drivers live in fear and said the business model was a “hair’s breadth from forced labor.”
The minister, along with four GTA MPs, met with a delegation of the Canadian Trucking Alliance (CTA) and Teamsters Canada.
Federally regulated fleets will soon be required to offer employees 10 days of paid sick leave per year, and the minister acknowledged that will be difficult for businesses which follow the rules. He said it was important to ensure a level playing field, because some companies were abusing their workers by not giving them the same privileges and therefore not having to carry the same expenses.
The federal government has indicated further details will be included in the 2023 budget, and that Canada Revenue Agency will work with the transportation industry to raise awareness about the scheme.
CTA welcomes announcement
The CTA has long condemned the use of the Driver Inc. employment model and welcomed the announcement.
“On behalf of the CTA, its members, truck drivers and their families, we very much appreciated seeing the Government of Canada make stamping out Driver Inc. a top priority in the fall Economic Statement,” CTA president Stephen Laskowski said in a press release. “Driver Inc is an unlawful practice that involves gross labor misclassification, abuse of workers, forced labor and significant corporate tax evasion. We welcome the chance to work with the Government of Canada to stamp out this practice as quickly as possible.”
Beyond audits, penalties, and forced backpay, CTA recommended that all gross violating companies receive a second audit within 12 months of their initial audit to ensure compliance. If during the second audit the company is again found to be in gross noncompliance, the result should be – in partnership with provincial ministries – termination of their trucking licence, removal of plates from all trucks associated with the company, and the implementation of ‘ghosting protocols’, the alliance says.
CTA is also calling on ESDC to partner with all workers’ compensation boards (WCBs) and the CRA, to trigger CRA and WCB audits for gross violating companies. Gross violators must understand and appreciate the full impacts of their illegal actions.
The CTA estimates more than $1 billion in tax revenue is lost every year through the scheme. It launched dedicated websites at www.stopdriverinc.ca and www.stopponschauffeurinc.ca to help highlight the problem.
Speaking with TruckNews.com at the Atlantic Provinces Trucking Association’s annual meeting in Moncton, N.B., Laskowski added, “There is nothing wrong with PSB (personal services businesses) if you are filing properly. The issue is no one is filing as PSB.”
Have your say
This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.
I hope Mr Laskowski looks into owner operators contracted with some of these trucking companies… their contracts that owner operators legally need to sign upon start up ain’t worth the papers it’s written on.. example fuel surcharge that is collected from the shippers should be passed on to the owner operators 100% of it and be more transparent about what they collect, the U.S. trucking companies do !
I work for a company in BC that pays all employees by the load and this should be illegal as this is the way that these cheap companies use drivers to avoid paying overtime that a driver deserves after working over 60 hours a week every week. This practice is unfair and does nothing to boost moral or compensate drivers for devoting there time to a company that expects 13 hours a day with zero overtime .
Here is a summary of my week.
I work strictly nights which should involve a night shift premium which it doesn’t.
For over two years I have been hauling wood chips from Alberta to Bc.
10 to 11 hour days .
That’s 50 to 55 hours a week. For most people that’s 10 to 15 hours overtime but not the trucking industry. All regular pay.
The government needs to step in and force companies to compensate drivers fairly for their devotion.
Recently I was pulled from my regular route and given a different route that added 2 to 3 hours per day .
That’s 10 to 15 hours a week for an added $40 per day.
This truck is a day cab and I don’t have time to take my breaks as I have to rush back so that my cross shift can follow the same route. Every day falling behind by one hour, add the hour drive to and from work and that a crazy schedule to keep while barely getting 5 hours sleep per day.
By the time Friday rolls around I get off at 6am for my one day weekend.
Drivers are used and abused , underpaid and witness much disrespect.
I have not heard one good explanation as to why the trucking industry is allowed to inflict this much stress on drivers and get away with it.
The practice of paying by the load and pushing drivers to the limit has to stop.
All company drivers should be paid by the hour with overtime after 8 hours like the rest of the country.
Pay by the load should only be for owner operators as they get a percentage of the load which company drivers don’t, we get a flat rate from the load and that is unfair and unsafe practice.
We should also have the right to refuse work after 48 hours a week without repercussions and we don’t.
Drivers are pushed to the limit and beyond and that is one reason why I see so many crashes with lives ruined and ended.
I hope this helps level the playing field for rates. Next should be taxes for employees working in other countries but directly for Canadian companirs