“My employer says I’m a contractor—does that mean I have no rights?”
Short answer: No. What your employer calls you doesn’t matter. What matters is the actual relationship.
Courts look at the total relationship between you and the employer, not what your contract says. Just because a contract labels you a “contractor” doesn’t make it true.
Real example from Ontario: Fariah worked Monday to Friday, 9-5, in the employer’s office, using their equipment. Her contract said “independent contractor.” An employment standards officer investigated and ruled she was an employee—entitled to overtime, vacation pay, and holiday pay.
“I get paid by invoice. Am I still an employee?”
Yes, you can be. How you’re paid doesn’t determine your status.
You could be invoicing for your work but still legally be an employee if:
- Your “client” controls when and how you work
- You work set hours at their location
- You use their equipment and tools
- You can’t hire someone else to do the work
- You work exclusively (or mostly) for one company
- You can’t really run your own business
Under section 5.1 of the Employment Standards Act, it’s illegal for employers to misclassify employees as contractors.
“Can I be both a contractor and an employee?”
Not for the same company. You’re either one or the other for each working relationship.
However, you can be:
- An employee for Company A
- A contractor for Company B
- A “dependent contractor” for Company C (explained below)
Your status depends on each individual relationship.
The Real Test: Are You Actually a Contractor?
Courts ask one key question: Are you working as a person in business for yourself, or are you working as someone’s employee?
Signs You're Likely an EMPLOYEE (Not a Contractor):
Control:
- Your employer sets your schedule and hours
- They tell you how to do your work
- They supervise or manage your tasks
- You need their approval for decisions
Tools and Equipment:
- You use their computer, phone, tools, or equipment
- You work at their office or location
- They provide training or uniforms
Financial:
- You get paid hourly or salary (not per project)
- You don’t have business expenses or invoices
- You can’t hire helpers or subcontract the work
- No chance of profit or risk of loss
Integration:
- You’re part of their business operations
- You work only (or mainly) for them
- Clients think you work for the company
- You don’t advertise your own services
Signs You're Actually a CONTRACTOR:
Control:
- You decide when and how to do the work
- You can accept or refuse projects
- You work independently without supervision
- You control your own schedule
Tools and Equipment:
- You own and maintain your own tools/equipment
- You work from your own location
- You have your own business setup
Financial:
- You invoice for completed projects
- You have business expenses you can deduct
- You can hire helpers or subcontract
- You have profit opportunity and loss risk
Independence:
- You work for multiple clients
- You advertise your services
- You have your own business name/brand
- Clients know you’re a separate business
What Is a "Dependent Contractor"?
There’s a third category: dependent contractors. These are workers who are economically dependent on one company but aren’t quite employees.
Example: You run your own business but 90% of your income comes from one client. You might be a dependent contractor.
Why it matters: Dependent contractors get some employee rights, like reasonable notice if terminated and the ability to sue for wrongful dismissal.
Why Employers Misclassify Workers
Here’s the uncomfortable truth: Misclassifying you as a contractor saves your employer money. They avoid paying overtime, vacation pay, statutory deductions (CPP, EI), WSIB, and severance.
It’s cheaper for them—but it’s illegal if you’re actually an employee.
What Rights You're Losing as a "Contractor"
If you’re misclassified, you’re missing out on:
Employment Standards Act protections:
- Minimum wage guarantees
- Overtime pay (time and a half after 44 hours)
- Vacation pay (minimum 4% of earnings)
- Public holiday pay
- Termination notice or pay
- Severance pay (if eligible)
Other protections:
- EI contributions (affects unemployment benefits)
- CPP contributions (affects your pension)
- WSIB coverage (affects workplace injury claims)
- Wrongful dismissal rights
What to Do If You Think You're Misclassified
Step 1: Document Your Relationship
Write down:
- Who controls your schedule and work methods
- Whose equipment you use
- How you’re paid and when
- Whether you work for other clients
- Whether you have business expenses
Step 2: Check Your Contract
Look for red flags:
- Does it call you a “contractor” but treat you like an employee?
- Do you have none of the freedoms contractors usually have?
- Are you working full-time hours for one company?
Step 3: File a Claim
If you believe you’re misclassified, file a claim with the Ministry of Labour. An employment standards officer will investigate the actual relationship—not what your contract says.
Contact:
- Phone: 1-800-531-5551
- Online: ontario.ca/employmentstandards
Step 4: Talk to a Lawyer
Get legal advice if:
- You’re owed significant back pay (overtime, vacation, etc.)
- You were terminated and believe you’re entitled to severance
- Your employer is threatening you for raising the issue
- You want to challenge your classification
Most employment lawyers offer free consultations.
Penalties for Employers Who Misclassify
Employers who misclassify workers face serious consequences: fines up to $500,000, back wages owed to workers, statutory deductions, and potential class action lawsuits.
In the Uber Technologies Inc. v Heller case, workers are currently seeking $400 million in damages for misclassification.
Three key points:
- What they call you doesn’t matter. It’s the actual relationship that determines your status, not the label in your contract.
- Most misclassified workers are actually employees. If it looks like a job, acts like a job, and feels like a job—it probably is one.
- You have rights. If you’re misclassified, you can recover what you’re owed: overtime, vacation pay, severance, and more.
