ESDC Sends Strong Warning: Driver Inc. Misclassification is Illegal and Will Have Consequences

Source: EDSC

As Canada marks National Trucking Week, Employment and Social Development Canada (ESDC) has issued a stern reminder to the trucking industry: misclassifying drivers under the Driver Inc. model is illegal and will not be tolerated.

In a new video entitled “Misclassification is Illegal”, ESDC’s Labour Program highlights the risks and consequences of worker misclassification in the trucking sector. The video explains what misclassification is, why it violates the Canada Labour Code, employers’ legal obligations, and the penalties for non-compliance.

The Driver Inc. model wrongly treats employees as independent contractors, allowing some companies to sidestep obligations such as overtime pay, paid leave, Employment Insurance (EI), and Canada Pension Plan (CPP) contributions. This practice undermines workers’ rights, drives down wages, and creates an unfair advantage for non-compliant carriers.

Non-compliance remains widespread, with 40% at the national level and nearly 65% in Ontario, according to industry data. Jonathan Blackham, Director of Policy and Public Affairs, stressed the urgency: “The level of abuse and non-compliance is no longer in question. What’s needed now is to ensure enforcement officers have the resources to uphold labour laws.”

To promote compliance, ESDC continues to provide its Awareness Kit for the road transportation industry, which includes educational tools, posters, and videos. The message is clear: companies using the Driver Inc. scheme to cut corners are breaking the law – and the government is watching.