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Bill 28, Preventing Worker Misclassification Act, 2021

Sattler, Peggy

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Status

Debates

Acts affected

Original

Bill 28 Original (PDF)

EXPLANATORY

NOTE

The

Bill amends the Employment Standards Act, 2000 to

set out a test for when a person is deemed to be an employee of an employer.

The purpose of the test is to ensure that workers are not misclassified as

independent contractors.

The

test provides that a person who performs work for another person and who is

directly or indirectly remunerated by the second person for that work is deemed

to be an employee of the second person unless the second person can establish

that all three of the following conditions are met:

1. The

first person is free from the direct or indirect control and direction of the

second person in connection with the performance of the work, both under the

terms of the contract for the performance of the work and in fact.

2. The

first person performs work that is outside the usual course of the second

person’s business.

3. The

first person is customarily engaged in an independently established trade,

occupation or business of the same nature as that involved in the work

performed.

The

Bill includes an exemption for business-to-business contracting relationships that

meet certain criteria.

Bill 28 2021

Act to amend the Employment Standards Act, 2000 with respect to the

employer-employee relationship

Her

Majesty, by and with the advice and consent of the Legislative Assembly of the Province

of Ontario, enacts as follows:

(1) The definition of “employee” in subsection 1 (1) of the Employment Standards Act, 2000 is amended by striking out

“or” at the end of clause (c), by adding “or” at the end of clause (

d) and by

adding the following clause:

(

e) a

person who is deemed to be an employee under

section 1.1,

(2) Clause

(

a) of the definition of “employer” in subsection 1 (1) of the Act is amended

by adding “including, for greater certainty, a person who is deemed to be an

employee under

section 1.1” after “the employment of a person in it”.

The Act is amended by adding the following section:

Test

for employer-employee relationship

1.1

(1) A person

(the “first person”) who is remunerated by another person (the “second person”),

whether directly or indirectly, for performing work is deemed to be an employee

of the second person for the purposes of this Act unless the second person

establishes that all of the following conditions are satisfied for the duration

of the work performed:

1. The

first person is free from the direct or indirect control and direction of the

second person in connection with the performance of the work, both under the

terms of the contract for the performance of the work and in fact.

2. The

first person performs work that is outside the usual course of the second

person’s business.

3. The

first person is customarily engaged in an independently established trade,

occupation or business of the same nature as that involved in the work

performed.

Business-to-business

contracting relationship

(2) Subsection

(1) does not apply to the determination of whether a business (the “first

business”) that contracts to provide services to another business (the “second

business”) is an employee of the second business if the second business

establishes that all of the following conditions are satisfied:

1. There

is a written contract between the first business and the second business.

2. The

first business is free from the control and direction of the second business in

connection with the performance of the services, both under the terms of the

contract for the performance of the services and in fact.

3. The

first business is providing services directly to the second business rather

than to customers or clients of the second business.

4. The

first business maintains a head office or primary location of business that is

separate from the business or work location of the second business.

5. The

first business is customarily engaged in an independently established business

of the same nature as that involved in the services performed.

6. The

first business contracts with businesses other than the second business to

provide the same or similar services and maintains a clientele without

restrictions from the second business.

7. The

first business advertises and holds itself out as being available to provide

the same or similar services to the public as those it is providing to the

second business.

8. The

first business provides its own tools, vehicles (other than a personal vehicle)

and equipment to perform the services.

9. The

first business can negotiate its own rates.

10. The

first business can set its own hours and location of work, consistent with the

nature of the work.

11. The

first business performs work for the second business under the first business’s

own name.

12. The

first business has the right to perform similar services for others on whatever

basis and whenever it chooses.

13. The

second business does not represent to its customers that the first business is

an employee of the second business.

14. If

the first business hires employees,

i. all

employees are hired without the approval of the second business,

ii. the

first business pays the employees without reimbursement from the second

business, and

iii. the

first business makes statutory remittances and reports the employees’ income to

the Canada Revenue Agency.

15. If

the services being provided require a licence or a permit, the first business

obtains and pays for the licence or permit in the first business’s own name.

Clarification

(3) For

greater certainty, for the purpose of assessing the employment relationship of

an individual worker who performs work for a second business described in

subsection (2), subsection (1) applies and subsection (2) does not apply.

Section 141 of the Act is amended by adding the following subsection:

Transitional

regulations

(2.0.3.5) The

Lieutenant Governor in Council may make regulations providing for any

transitional matter that the Lieutenant Governor in Council considers necessary

or advisable in connection with the implementation of the amendments made by

the Preventing Worker Misclassification Act, 2021 .

Commencement

This Act comes into force on the day it receives Royal Assent.

Short

title

The

short title of this Act is the Preventing Worker

Misclassification Act, 2021 .

Date Bill stage Event Outcome Committee

November 18, 2021

Second Reading

Vote

Lost on division

November 17, 2021

Second Reading

Deferred vote

November 17, 2021

Second Reading

Debated

October 26, 2021

First Reading

Vote

Carried

Debates and Progress

First Reading

October 26, 2021

Committee

Second Reading

November 17, 2021

Ms. Peggy Sattler, Mr. John Fraser, Ms. Suze Morrison, Mr. Tom Rakocevic, Ms. Marit Stiles, Mr. Deepak Anand, Mr. Joel Harden

Vote deferred.

November 18, 2021

Lost on division.

Committee

Third Reading

Royal Assent

Acts affected - Bill 28

Most Ontario public acts are available electronically; to view copies of the Acts to be amended by this bill visit e-laws

Employment Standards Act

Legislative Assembly of Ontario

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