Bill 148: Fair Workplaces, Better Jobs Act 2017 (Expected fall 2017) - Province of Ontario.
Recent discussions on the Ontario Government’s Changing Workplaces Review, and the proposed Bill 148: Fair Workplaces, Better Jobs Act 2017, have focused on changing minimum wage provisions and largely neglected the impact the proposed legislation will have on Ontario Independent Contractors.
This omission is significant. The APCC’s assessment of the Changing Workplaces recommendations and public comments by the Ontario Liberal Government suggest Bill 148 will have the most profound impact on the law covering Independent Contractor engagement models yet proposed in Canada, and that this represents a potentially huge risk to the APCC’s Ontario based members.
Shifting standards on Contractor Misclassification
Embedded within the Changing Workplaces Review Final Report are three recommendations (125 through 127) that significantly increase the potential for contactor misclassification litigation on Client organizations.
These recommendations represent an impossible and ambiguous bar to Client organizations seeking to safely use services from Independent Contractor providers.
What does this mean for APCC Members?
When similar legislation was introduced in the United States (and indeed the US model was cited by the Changing Workplaces Review report as an inspiration it effectively removed ‘Freedom of Association’ from the US Contract Services market. US Client organizations facing similar legislation responded by taking some or all of the following steps:
- Terminating or naturally concluding existing Independent Contractor relationships;
- Exclusively using W2 (Temporary Employee) engagement models for any future contract services engagements ;
- Introducing contract term limits, typically 18 or 24 months, to limit the financial exposure faced by any potential misclassification event;
- Offshoring some or all of their flexible Contract Services requirements to foreign jurisdictions (ironically, Ontario is one of the destination locations that has benefited from this trend).
It is not difficult to extrapolate a similar shift taking place in Ontario, as the impact of the Bill 148 Legislation propagates through the Ontario labour market, and Reclassification lawsuits are brought by opportunistic plaintiffs.
The APCC’s view is that there is great potential for the Bill 148 changes to end of the ‘Freedom of Association’ framework that exists in Ontario today. For high end professional services consultants, losing access to the ability to use a ‘personal incorporation’ as a consulting vehicle would have numerous disadvantages, including reduced access to self-directed professional training/certifications, loss of entrepreneurial opportunities via hiring workers, and reduced access to international consulting engagements.
What to do?
The draft legislation will be tabled in Fall 2017. Change only happens if you make your voice heard.
- Voice your concerns to Minister of Labour Kevin Flynn and Deputy Minister Sophie Dennis.
- Advocate on Social Media and to the media using the #Bill148 hashtag
- Let your local MPP know this is an issue you care about, and express your concerns with the coming changes.
The APCC’s position is that the current subjective assessment framework used in determining Independent Contractor status is ambiguous, difficult to employ, and often too slow to provide useful protection to the people who need it most.
It must be replaced or augmented with an objective assessment framework. The APCC has proposed an Income Based test, similar to the Accredited Investor framework defined by the Canadian Securities Commission in NI-106. APCC proposes that IC’s with annualized earnings more than three times the Median Canadian Individual Income should be provided safe harbor to choose to engage as an incorporated independent contractor without any restrictions or risk of subsequent reclassification. Beneath this income threshold, the current subjective framework developed through Canadian case law should remain in force.
Resources for You
- APCC’s Member Update regarding the potential impacts of the Changing Workplaces Review
- Contact Information for the Minister and Deputy Minister of Labour. Click Here.
- Contact information for Members of the Legislative Assembly of Ontario. Click Here.
- You can find sample letters for voicing your concerns at the bottom of this page.
- Social media references: #Bill148