Employee Misclassification: Understanding Your Employment Status
Employee misclassification occurs when a worker is incorrectly labeled as an independent contractor instead of an employee. This misclassification can significantly affect access to benefits, vacation pay, overtime, job security, and termination entitlements.
Why Employee Status Matters
Employees are entitled to rights and protections under Ontario’s Employment Standards Act and Human Rights Code, including minimum wage, statutory benefits, and severance pay. Independent contractors do not enjoy the same protections. Employers sometimes misclassify workers—intentionally or unintentionally—to reduce costs and limit legal obligations.
Common Signs of Misclassification
- Denial of overtime pay or vacation entitlements
- Required to work set hours under employer direction
- Exclusive work for one company with no ability to subcontract
- Employer providing tools, training, and direct supervision
- Denial of benefits such as EI, CPP, or health plans
Legal Consequences of Misclassification
Misclassification can lead to significant liability for employers, including back pay, benefits, and penalties. Employees who are misclassified may be entitled to compensation, severance pay, and other remedies under employment law.
How Legal Support Can Help
Hamilton Employment Lawyers advise workers on whether they have been misclassified and help recover lost wages and benefits. Employers receive guidance on proper classification and risk avoidance. Representation is also provided in disputes and Ministry of Labour investigations.
