Some trucking companies hire employees as “incorporated drivers” with the promise of increased income due to tax deductions, when in fact they are only employees in disguise and not entitled to the same protections as others.
The Association du camionnage du Québec (ACQ) warns against this “scourge” that has been growing in Quebec for the past few years, according to Marc Cadieux, president and CEO of the Association du camionnage du Québec. And foreign workers do not escape: “Not knowing the inequalities, their rights, and arriving in our country to try to pocket as much money as possible, they will agree to enter into these subterfuges not knowing that it is illegal”, he worries.
“False contractor”
Some freight companies encourage workers to incorporate with the promise that they will make a wage gain. But in addition to having a special status, the person who incorporates would normally assume the financial risks and make his or her own deductions, be able to offer his or her services to the companies of his or her choice, own the truck and equipment, and decide on his or her own working hours and vacations. But this is not the case. The Chauffeur inc. incorporation model does not meet the above criteria, because the trucker is always tied to a single carrier: he uses the latter’s equipment and truck, must ask for approval for his schedule and vacations, etc. He is therefore not a worker, but rather an employee.
He is therefore not an incorporated worker within the meaning of the law and the deductions are not compliant: he is a “false contractor”, says the director of the ACQ. What’s more, he does not have access to the rights provided for in the Quebec Labour Standards or the Canada Labour Code, such as employer contributions to employment insurance and the pension plan, paid sick leave or workers’ compensation. In addition to being unprotected, the employer risks receiving a nasty surprise at the end of the fiscal year.
Employers who use this subterfuge benefit from this practice, such as not having to make deductions at source. This way, the employee costs him less and he can charge less to his clients, creating an unfair competition in the industry, says Marc Cadieux. “Unfortunately, it’s not the employer who will be caught in the middle, it’s the worker who will be assessed all the taxes that he didn’t pay or that he evaded with penalties. The Canadian government is proposing to provide $26.3 million over five years, beginning in 2023-2024, to Employment and Social Development Canada to take tougher action against non-compliant employers.
Recognizing the signs of fraud
Beware of job advertisements such as “Incorporated Driver Wanted” with “$XX/hr for incorporated” for example, or if the employer offers to become self-employed or incorporated while maintaining a subordinate relationship with the employer. This practice is more likely to affect workers with open work permits, but should be known to all categories of migrant workers to protect them from potential fraud.
If this happens to you, you can reach the CNESST whistleblower line with “Driver Inc.” in the subject line of the email: renseignement@cnesst.gouv.qc.ca. You can also contact the specific reporting service for temporary foreign workers (French, English, Spanish): signalement_tet@cnesst.gouv.qc.ca.
The Canada Revenue Agency also has a whistleblower service (French, English). Find it here: https://www.revenuquebec.ca/fr/une-mission-des-actions/assurer-la-conformite-fiscale/denonciation/programme-general-de-denonciation/comment-effectuer-une-denonciation/
