The federal government is ramping up its fight against worker misclassification by rolling out new measures under the Canada Labour Code.

Overseen by Minister Patty Hajdu and led by Employment and Social Development Canada’s (ESDC) Labour Program, the changes aim to impose steeper penalties, speed up enforcement, and shine a brighter spotlight on non-compliant employers—particularly in sectors like trucking where misclassification has been a persistent issue.

The updates focus on strengthening compliance tools to deter employers from wrongly classifying employees as independent contractors, a practice that deprives workers of benefits, minimum wage protections, overtime, and other entitlements while giving non-compliant businesses an unfair edge.

Key enhancements include:

• Tougher language in compliance orders (under section 251.06): Orders will now clearly state that failing to prove corrective action could lead to a finding of ongoing non-compliance, triggering separate Administrative Monetary Penalties (AMPs) under section 278 for each day the violation continues or recurs.
• Daily penalties for repeat offenders: Employers caught misclassifying workers again during follow-up inspections after a prior AMP could face escalating fines applied on a daily basis, dramatically raising the financial stakes for prolonged or repeated violations.
• Expanded public naming and shaming: Beyond those directly misclassifying workers, the Labour Program will now publicly name employers who obstruct investigations, amplifying reputational damage as a deterrent.
• Faster escalation of penalties: Regulators can now issue AMPs without delaying for the completion of reviews or appeals on related compliance orders or directions. While appeal processes remain intact, enforcement can proceed swiftly if non-compliance persists.

These steps build on prior efforts, including strengthened prohibitions in Budget 2024 and ongoing inspection blitzes targeting federally regulated industries like road transportation. They respond to longstanding calls from stakeholders, including the Canadian Trucking Alliance (CTA), which has highlighted how misclassification—often through schemes like “Driver Inc.”—undermines fair competition, worker protections, and road safety.

The CTA welcomed the signals of tougher enforcement, noting it addresses industry concerns about the application and impact of AMPs in driver misclassification cases. Officials emphasize that these tools will help level the playing field, protect vulnerable workers, and ensure honest employers aren’t disadvantaged by those cutting corners.

The changes signal Ottawa’s commitment to more proactive and impactful enforcement against illegal worker misclassification across federally regulated sectors.