In a newly released video titled “Misclassification is Illegal”, ESDC’s Labour Program outlines the crisis of employee misclassification in the road transportation sector and warns companies that non-compliance with the Canada Labour Code will not be tolerated.

“To support compliance in the road transportation industry, we are pleased to share a new video from the Labour Program – Misclassification is Illegal – during National Trucking Week,” the department said in a statement.

The video explains what misclassification is, why it is prohibited under the Canada Labour Code, employer obligations and the consequences of non-compliance.

The video is part of a broader effort to combat the Driver Inc. model, where truck drivers are improperly classified as independent contractors rather than employees. This practice allows some companies to sidestep basic labour obligations, including protections related to overtime pay, vacation, employment insurance (EI), and the Canada Pension Plan (CPP).

Driver Inc. misclassification exploits workers and gives non-compliant companies an unfair competitive advantage, driving down wages and labour standards across the industry. CTA and the industry have called for increased funding for the ESDC misclassification team to ensure they can continue to combat noncompliance.

The federal government’s current campaign against misclassification includes the Misclassification in the Road Transportation Industry: Awareness Kit, which remains available online. The kit offers practical tools and educational resources for both employers and drivers, including:

• A clear overview of what constitutes misclassification
• Guidance on how the Labour Program investigates and addresses violations
• Posters and videos that can be shared in workplaces

Misclassification is a form of labour abuse that undermines workers’ rights and puts compliant businesses at a disadvantage. Labour inspectors continue to investigate and penalize companies found to be violating the law.

Meanwhile, industry associations, industry participants and labour advocates continue to urge the government to go further in cracking down on offenders and increasing penalties.

The national non-compliance rate with Canadian labour stands at 40% and nearly 65% in Ontario.

“The level of abuse and non-compliance is no longer in question. It’s clear that ESDC needs additional resources to ensure workers are properly protected,” said Jonathan Blackham, Director of Policy and Public Affairs. “The only thing left to do is ensure enforcement officials have the support and tools they need to uphold and enforce labour laws."

For employers unsure of their obligations, ESDC encourages them to use the awareness kit and video as tools to ensure compliance. The message is clear: if you're using the Driver Inc. model to cut corners, you are breaking the law – and the government is watching.