additional rights under common law. Misclassification can lead to liabilities for unpaid overtime, vacation pay, holiday pay and severance. Employers may also face penalties from the Canada Revenue Agency for failing to withhold and remit payroll taxes, EI and CPP. By understanding and correctly classifying workers, landscaping employers can create compliant employment practices and avoid these risks. Treating employees as volunteers or unpaid interns Another area of misclassification that can lead to liability issues is the treatment of workers as volunteers or interns in order to minimize costs. However, misclassifying workers in this way can lead to serious liability issues. Volunteers are not considered employees under the ESA , but simply avoiding wages does not establish the volunteer status. The ESA does not have a definition of a volunteer. To determine whether a worker is a volunteer or an employee, an employer should consider the nature of the arrangement and the benefits each party receives. Additionally, the way the arrangement was established plays a role in determining volunteer status, especially if there was a power imbalance between the two parties that influenced how the agreement was structured.
Similarly, unpaid internships can be legally precarious. Many employers offer these roles to attract young talent eager to gain experience, but in most cases, these interns qualify as employees and are eligible for wages and other entitlements under the ESA . Some exceptions may include interns who are students working in certain secondary school, college or university programs. Not complying with workplace safety requirements Failing to comply with WSIA requirements can lead to serious consequences, exposing landscaping employers to legal and financial liabilities in the event of workplace injuries. Landscaping services are classified under NAICS Code 561730, where coverage status is “mixed.” The majority of services typical to landscaping businesses, such as garden planting, lawn care and installing structures like walkways and retaining walls, are mandatorily covered under the Workplace Safety and Insurance Act, 1997 (WSIA). Because of this, WSIA coverage is effectively compulsory for most landscaping employers, even though certain niche services, like arborist and cemetery plot care, may not be mandatory. WSIA -covered employers must report certain work-related accidents to the WSIB promptly, fulfill first aid requirements, display the “In Case of Injury at Work” poster, pay
employers liable for significant severance pay. Relying on inadequate templates can result in non-compliance with employment laws, leading to unexpected termination costs and legal expenses. Misclassifying an employee as an independent contractor Landscaping businesses may see independent contracting arrangements as a way to reduce costs, avoiding obligations like overtime pay, vacation pay, employment insurance (EI) premiums and Canada Pension Plan (CPP) contributions. However, if workers are misclassified as independent contractors when they function as employees, the financial consequences can be steep. As explained by the Ministry of Labour’s Guideline and cases like Keenan v. Canac Kitchens , 2015 ONSC 1055, a worker’s legal status is not defined solely by the label assigned to them but by the actual working relationship — whether the worker has control over their schedule, tools and business opportunities, or whether they function under the employer’s sole direction. An employer has a higher degree of control over an employee than over an independent contractor. Misclassified employees are entitled to full protection under the Employment Standards Act, 2000 (ESA) and often merit
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FEBRUARY 2025 | 45
Date:
Sep 16, 2024
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