Independent Contractor Misclassification Ontario

If you’re working for a company but classified as an “independent contractor” instead of an “employee,” you might be wondering: does it really matter?

The answer is yes and the difference can have a huge impact on your income, benefits, and legal rights. 

Let’s break down what independent contractor misclassification means and why it matters.

Before we dive into misclassification, it’s important to understand the basic difference between these two types of workers.

Employees work for a company under its direction and control. They receive regular pay, and the employer is responsible for deducting taxes, contributing to Employment Insurance (EI) and Canada Pension Plan (CPP), and providing benefits like vacation pay, overtime, and severance.

Independent contractors are self-employed. They work for themselves, often serving multiple clients. They control how and when they do their work, pay their own taxes, and don’t receive employee benefits.

The key difference is control. Employees are told what to do and how to do it. Independent contractors have more freedom and independence.

Independent contractor misclassification happens when an employer labels a worker as an independent contractor, even though that worker should legally be classified as an employee.

In other words, the company is treating you like an employee — controlling your work, setting your hours, telling you what to do — but calling you a contractor to avoid paying for employee benefits and protections.

Unfortunately, some employers misclassify workers because it saves them money. Here’s what they avoid paying when they classify someone as a contractor instead of an employee:

Employment Insurance (EI) and Canada Pension Plan (CPP) contributions, vacation pay and statutory holiday pay, overtime pay, severance pay if the worker is let go, workplace safety insurance (WSIB), and benefits like health insurance or retirement plans.

By calling you a contractor, the employer shifts these costs onto you — even though you’re doing the work of an employee.

It doesn’t matter what your contract says. Just because your employer calls you an independent contractor doesn’t make it true.

What matters is the reality of your working relationship. Courts and government agencies look at how you actually work, not just the title on your contract.

If your employer controls your schedule, tells you how to do your job, and treats you like an employee in every other way, then you are legally an employee — no matter what the paperwork says.

At Pinto Shekib LLP, we help workers who have been misclassified as independent contractors. Contact us at 416.901.9984 or info@pintoshekib.ca.