Driver Inc. And The Canada Labour Code: Rights For Drivers, Compliance Risks For Carriers

Introduction: Driver Inc. and How Some Trucking Companies Operate in Canada

A CBC news investigation criticized the Canadian trucking industry for its employment practices, reporting that some trucking companies purposefully misclassify workers as independent contractors to save money on payroll taxes and avoid labour standards obligations. The Canadian Trucking Alliance has called this practice, or scam, “Driver Inc.” One driver interviewed had to prove to the Canada Industrial Relations Board that he had been misclassified before he could recover wages he was owed.

The scale of the problem is disproportionate: long-haul trucking accounts for only about 17 percent of federally regulated employment in Canada, yet trucking employers were responsible for roughly 85 percent of confirmed Canada Labour Code violations between 2017 and 2022, according to government data obtained by researchers and reported by CBC News and The Globe and Mail.

Since that story, the law has moved significantly in drivers’ favour. As of June 20, 2024, federally regulated workers, including most long-haul truck drivers, are presumed to be employees under the Canada Labour Code unless the employer proves otherwise.

This article focuses on what that presumption means, what protections and entitlements come with employee status under the Code, and how a misclassified driver can file a complaint. For how worker classification separately affects your income tax, CPP, and GST/HST position, and the personal services business risk facing incorporated drivers, see our firm’s comprehensive guide to truck driver taxes in Canada.

The 2024 Reversal: Your Employer Must Now Prove You’re a Contractor

Before June 20, 2024, a misclassified worker generally had to prove he or she was an employee to access rights under the Canada Labour Code. Bill C-69, the Budget Implementation Act, 2024, No. 1, reversed that burden. Section 167.01(1) of the Code now states that a person who is paid remuneration by an employer is presumed to be that employer’s employee unless the contrary is proved by the employer, meaning it is the employer who must prove otherwise if it wants to treat the worker as an independent contractor.

The presumption applies across Part I (industrial relations), Part II (occupational health and safety), and Part III (labour standards, including hours, wages, vacations, and holidays) of the Code, and it explicitly covers gig workers as well as more traditional contracting arrangements.

The Code was also amended to prohibit employers from treating a presumed employee as though he or she were not an employee, and to create a complaint process specifically for workers when the presumption or the prohibition is contravened. Legitimate independent contractors, drivers who are genuinely running their own business, are not affected by the presumption; it is aimed at arrangements where the label “contractor” does not match how the work actually operates.

What Protections and Entitlements Come With Employee Status

Once the presumption applies, a driver is entitled to the protections of the Canada Labour Code unless and until the employer proves otherwise. Depending on which Part of the Code is engaged, this can include minimum wage and overtime protections, vacation pay and public holiday pay, termination notice or pay in lieu, severance pay, protection from unjust dismissal, and occupational health and safety protections, along with the right to organize and bargain collectively under Part I. A driver who has been paid as a contractor throughout an engagement that should have been classified as employment can pursue these entitlements retroactively, not just from the date the misclassification is corrected.

How to Report Misclassification

The federal Labour Program is responsible for enforcing these provisions in the road transportation industry, and drivers who believe they have been misclassified can contact the Labour Program to learn how to file a complaint. A monetary complaint under the Code must generally be filed within six months of the last day the employer was required to pay the wages in question, and this deadline matters in practice: drivers who raise concerns are sometimes met with delayed or partial payments that run out the clock before a complaint is filed, so it is worth acting on a suspected violation promptly rather than waiting to see whether the employer eventually pays what is owed.

This is backed by real, and increasingly visible, enforcement capacity. The government committed $26.3 million over five years starting in 2023 to fund a dedicated Labour Program team focused on misclassification in road transportation, and that team has since conducted over 1,200 inspections and outreach sessions in the sector. On December 1, 2025, the Labour Program announced a targeted inspection blitz in Hamilton and the Greater Toronto Area specifically aimed at misclassification and labour standards non-compliance in trucking, with information collected during the blitz shared with the Canada Revenue Agency.

As of March 2025, the Labour Program and the CRA also share information with each other under a broader formal agreement aimed at coordinating enforcement against misclassification in trucking, so a Labour Code complaint and a CRA worker-status review are no longer necessarily separate, disconnected processes the way they may once have been.

This Is a Different Question From Your Tax Status

A finding that you are an employee under the Canada Labour Code, or under provincial employment standards legislation, does not automatically make you an employee for income tax purposes, and the reverse is also true. The Code’s presumption shifts who has to prove what in a labour standards proceeding; it does not change the common-law test the Canada Revenue Agency and the Tax Court apply under the Income Tax Act, which asks whether the hiring business actually controls the work, who owns the equipment, and whether the driver has a genuine chance of profit or risk of loss.

A driver can be presumed an employee under the Code for labour standards purposes while a separate, fact-specific analysis determines his or her status for CPP, EI, and income tax purposes, and an incorporated driver faces a further, distinct risk of having his or her corporation assessed as a personal services business regardless of how either question is resolved. The firm’s comprehensive guide to truck driver taxes in Canada covers that analysis, the relevant Tax Court decisions, and the current CRA enforcement funding targeting incorporated drivers in detail.

What This Means for Carriers and Employers

The 2024 reversal of the burden of proof changes the risk calculation for trucking companies as much as it does for drivers. Before June 20, 2024, a carrier facing a misclassification dispute could rely on the driver having to prove employee status. Now, the carrier must affirmatively prove that a driver it has paid as a contractor is genuinely an independent contractor, and it has to be able to do that on short notice: Labour Program inspections in this sector are frequently unannounced, with an officer arriving to review payroll records and driver contracts on the spot. A carrier that has not already organized its documentation to support its classification decisions is starting an inspection at a structural disadvantage, regardless of whether its arrangements are actually compliant.

The exposure is not limited to the Labour Code side of the relationship. Where a driver is paid through a personal corporation, the carrier is generally required to report those payments on a T4A slip once they exceed $500 in a year, a requirement CRA reinstated for the trucking industry effective December 4, 2025 after a period during which penalties for non-compliance were paused. Because the Labour Program and CRA now share information under their 2025 agreement, a Labour Code inspection that identifies a misclassified driver can lead directly to a CRA review of that driver’s tax filings, and by extension to a review of the carrier’s own T4A reporting and, in some cases, its CPP and EI remittance history for that worker going back several years. A carrier that has one misclassified driver rarely has only one; the same contracting template is typically used across a fleet, which is what turns an individual dispute into a company-wide exposure.

For a carrier, the practical response is a proactive compliance review rather than waiting for an inspection to identify the gaps: auditing existing driver contracts and day-to-day practices against the genuine indicia of independence (equipment ownership, ability to decline loads, ability to work for other carriers, real financial risk), correcting arrangements that do not hold up before an inspector or CRA auditor does it first, and making sure T4A reporting for incorporated drivers is current.

Where that review turns up past non-compliance, for example unremitted CPP or EI, or T4A slips that should have been filed in prior years, it is generally worth considering the CRA’s Voluntary Disclosures Program before the CRA or the Labour Program identifies the issue independently, since a disclosure made before any audit, review, or enforcement blitz begins is treated far more favourably than the same facts disclosed in response to a CRA or Labour Program inquiry. A trucking company that gets ahead of this is in a materially better position, both in cost and in outcome, than one that is reconstructing its classification rationale for the first time during an active investigation.

Tax Pro Tip – Know Which Process You’re In, and Use Both if You Need To

If you believe you have been misclassified, treat the Labour Code complaint and any tax-status question as two separate tracks that can both be pursued, not as a single issue that gets resolved once. Keep records that support your position as an employee for Labour Code purposes: your schedule, who assigns your loads, whether you can decline work without penalty, who owns or leases the equipment you drive, and any company policies you are required to follow. The same records are also relevant, though not identical in legal effect, to a CPP/EI ruling request or a CRA worker-status review.

If your employer disputes your status once you raise it, remember that the Code now prohibits retaliating against a worker for asserting the presumption or filing a complaint. Engage with a top tax law firm in Toronto if you are unsure how a Labour Code finding, a CPP/EI ruling, and your corporation’s tax filings fit together, since getting one right does not automatically resolve the others. Carriers should treat a compliance review as an ongoing obligation rather than a one-time project, since a driver roster and its contracting arrangements change over time, and the same review should be repeated whenever the company’s dispatch practices, equipment arrangements, or use of incorporated drivers change materially.

FAQ About the Canada Labour Cod

What changed for truck drivers under the Canada Labour Code in 2024?

As of June 20, 2024, a federally regulated worker who is paid remuneration by an employer is presumed to be that employer’s employee. The employer, not the worker, now has the burden of proving the worker is genuinely an independent contractor if it wants to deny the worker employee protections under the Code.

What rights do I get if I am covered by the presumption?

Depending on which Part of the Code applies, this can include minimum wage, overtime, vacation and holiday pay, notice of termination or pay in lieu, severance pay, protection from unjust dismissal, occupational health and safety protections, and the right to organize under Part I.

How do I file a complaint if I think I’ve been misclassified?

Contact the federal Labour Program, which enforces these provisions in the road transportation industry and can advise on the complaint process. The Labour Program has a dedicated team focused specifically on misclassification in trucking.

Can my employer retaliate against me for asserting the presumption or filing a complaint?

No. The 2024 amendments prohibit employers from treating a presumed employee as though he or she were not an employee, and a complaint process exists specifically for situations where the presumption or this prohibition is contravened.

I was found to be an employee under the Canada Labour Code. Will I automatically be treated as an employee under the Income Tax Act?

No. A finding under the Canada Labour Code or provincial employment standards legislation does not necessarily mean you will be an employee for income tax purposes. The Income Tax Act uses a separate common-law test focused on control, equipment ownership, and chance of profit or risk of loss, and an incorporated driver faces an additional, distinct personal services business risk. The firm’s guide to truck driver taxes in Canada covers this test and the current case law in depth.

Does this presumption help legitimate independent contractors too?

No, and it is not meant to. Genuinely independent owner-operators who control their own schedule, use their own equipment, and can work for multiple carriers are not affected by the presumption; it is aimed at correcting mislabelled employment relationships, not at reclassifying real independent businesses.

Is the federal government actually enforcing this, or is it just a rule on paper?

The Labour Program has real funding and staff behind it: $26.3 million over five years starting in 2023 for a dedicated misclassification team, which has conducted over 1,200 inspections and outreach sessions in road transportation as of the government’s own reporting, including a targeted inspection blitz in Hamilton and the Greater Toronto Area announced December 1, 2025. Since March 2025, the Labour Program has also shared information with the CRA to coordinate enforcement.

How long do I have to file a complaint for unpaid wages or other Labour Code violations?

Generally six months from the last day the employer was required to pay the amount in question. Employers sometimes delay or partially pay what is owed until this deadline passes, so it is worth raising a suspected violation with the Labour Program promptly rather than waiting.

What should a trucking company do to prepare for a Labour Program inspection?

Because the burden of proof is now on the employer, and inspections are frequently unannounced, a carrier should proactively review its driver contracts and actual working arrangements against the indicia of genuine independence, correct any arrangements that do not hold up, and keep documentation organized and accessible rather than trying to assemble it once an inspector has already arrived.

If a Labour Program inspection finds a misclassified driver, does that automatically trigger a CRA audit of my company?

Not automatically, but the risk is real and has increased. Since March 2025, the Labour Program and the CRA share information under a formal agreement aimed at coordinating enforcement against misclassification in trucking, so findings from one agency can prompt a review by the other, including of a carrier’s T4A reporting and CPP/EI remittance history.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.