I recently ran into a foreign worker who was complaining about how he'd been feeling at the company.

It turns out that when he first arrived in Ontario, he was hired as a "contractor" or "freelancer. " They explained to him that he would issue invoices instead of receiving a T4, that there would be no automatic tax withholdings, and that he would be responsible for managing his own "benefits." 

It sounded simple and appealing.

At first, he enjoyed having control over his time, with more flexibility to take on other contracts, but after a few months, that changed. 

Suddenly, he was working regular hours; his work began to be directly supervised, and he started receiving instructions that went beyond what was specified in his contract.

When I asked him , “Does your day-to-day life resemble that of an independent contractor or that of an employee? ” he replied emphatically, “Like that of an employee.”

So I felt it was important to write this article about how Canadian law protects foreign workers from these labor abuses.

If this situation sounds familiar, read to the end and find out what you might be missing out on without realizing it if you’re called a “contractor” but work as an employee.

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The law is not guided by the title of the contract

Under the Employment Standards Act (ESA), a worker is presumed to be an employee unless the employer can prove otherwise. That means the burden of proof isn't on you—it's on your employer!

The courts and the Ministry of Labor do not focus on the name or title assigned to your position; they analyze the nature of the employment relationship as it actually exists.

The questions they ask are, essentially:

• Who controls how, when, and where you do your work? If your employer sets your schedule, closely supervises how you perform your tasks, or requires you to work from a specific location, that sounds like employment, not independent contracting.
• Who provides the tools? If you use the company's computer, software, uniform, or equipment, that suggests you're an employee, not a freelancer.
• Can you make more money or lose money depending on how you do the work? A true contractor takes on business risk—you can make more if you’re efficient, or lose money if you miscalculate a project. 

If you simply charge by the hour or by shift without taking on that risk, you are not operating as an independent business.

• Can you work for other clients at the same time? If your employer requires exclusivity, that is also a strong indication of an employment relationship.
• How integrated are you with the business? If you use the company's email, follow its internal policies, attend team meetings, or represent the company in front of clients, you are part of the operation. You are not an external vendor.

None of these factors is decisive on its own. The courts look at the totality of the circumstances. 

However, a common—and very frequent—pattern is precisely this: 

- They drew up a "Contractor" agreement for him, but they treat him exactly like an employee on a day-to-day basis. 

- They have a set schedule, receive direct supervision, are required to use company tools, and are required to work exclusively for the company. 

Legally speaking, this is usually considered a misclassification. 

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Why is misclassification in the employer's best interest?

In the Canadian workplace,misclassification occurs when an employer incorrectly classifies a worker as an independent contractor instead ofan employee.

This is done, in most cases, to avoid the legal obligations and costs associated with labor law.

Classifying them as a contractor—even if they are, in practice, an employee—allows the employer to avoid:

• Overtime pay.
• Vacation pay.
• Payment for holidays.
• Contributions to CPP and EI.
• Notice of termination or severance pay if you're let go.
• Protections under the Human Rights Code and other labor laws.

For you, this means that you have been working without the safety net guaranteed to you by law—either without realizing it or without having it clearly explained to you.

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What You Might Be Missing Without Realizing It—and Can Claim

If you have been working as a “contractor” but actually meet the criteria for an employee, you may be entitled to file a retroactive claim for:

• Vacation pay that was never paid to you.
• Overtime for the extra hours worked
• Payment for holidays.
• Notice of termination or severance pay, if you were fired without such notice.
• And in some cases, common-lawseverance, which can be significantly higher than the ESA minimum, especially if you've been with the company for some time.

This isn't just a legal technicality with no real consequences. For someone who has worked for months or years believing they didn't have these rights, the difference could amount to thousands of dollars.

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How can you tell if this applies to you?

Think about these questions and be honest in your answers:

• Do I have a set schedule that I don't get to choose?
• Do I use the company's tools or equipment?
• Do I have a supervisor who directs how I do my work on a day-to-day basis?
• Do I have to work exclusively for this company?
• Do I attend team meetings, use their email, and follow their internal policies?

If you answered “yes” to most of these questions, it’s worth having a qualified advisor review your situation in detail—because the title “Contractor” in your contract may not reflect what the law actually recognizes.

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Do you need legal guidance to file a claim regarding contract violations as a “Contractor/Freelancer” in Canada?