As we enter 2018, we find ourselves reflecting on the past year. At PCSI our world revolves around protecting the contractor model in Canada so while the contracting landscape experienced some significant developments this past year we found it an exhilarating ride knowing that our solution was continuing to mitigate risk for both businesses and independent contractors. With that said, we wanted to share our Top 3 Most Notable Moments of 2017.
#3 Federal Government Targets Small Businesses and Independent Contractors
In July, the Canadian Government proposed dramatic changes to federal tax rules that apply to small-business owners and entrepreneurs. The notable aspect of the government’s plan we are choosing to highlight was the proposed crack down on Income Sprinkling; a tax-planning measure to shift income to family members in a lower tax bracket to reduce taxes owed.
More recently, in mid December the Federal Government unveiled its new proposal to curb income sprinkling with substantive changes to the much-criticized initial proposal unveiled in the summer.
#2 Alberta Passes Bill 17 – Dependent Contractor Added to the Definition of Employee
In June, the Alberta Government passed the Fair and Family-Friendly Workplaces Act (Bill 17), setting the stage for significant amendments to the Employment Standards Code and Labour Relations Code. Most of the changes came into force on January 1, 2018, and will affect all provincially-regulated employers in the Province of Alberta.
Our specific notable moment here is that the Definition of Employee in the Labour Relations Code was broadened to include “Dependent Contractors”. This change took effect on September 1, 2017 and purportedly allows contractors to unionize and bargain collectively.
#1 Ontario Passes Bill 148 – Employment Standards Legislation Addresses Employee Misclassification
On November 27th, the Ontario Fair Workplaces, Better Jobs Act 2017 (Bill 148) received Royal Assent and passed into law. As a whole this could be viewed as a significant development however, what specifically makes this notable to PCSI is the reform that addresses Employee Misclassification.
Effective November 27, 2017, it is a contravention of the Employment Standards Act to misclassify and treat an employee – whether deliberately or not – as a self-employed “independent contractor” not entitled to the protections of the Employment Standards Act. In the event of a misclassification dispute, the onus is on the employer to prove that the individual is not an employee.
Simply put, Bill 148 explicitly bans employers from treating their employees as if they are not employees. This provision is specifically aimed at curtailing the widespread misclassification of employees as independent contractors.
Although this didn’t make our official Top 3 Notable Moments list we couldn’t overlook acknowledging that we were thrilled to launch our new website in December. We invite you to check it out!
2017 was quite a year and we expect that 2018 will be an even more exciting ride for PCSI!