What's In a Name: Employee, Manager, or Independent Contractor?

By: 

Stephen Portman

Finding out what your rights are at work can be a complicated process in today’s precarious workplace. The BC Employment Standards Act (the Act) sets out protections for employees, but employers sometimes use exemptions, built into the law, to deprive workers of the wages they are entitled to.

Your legal rights as a worker often depend on the nature of the work you do and how your job is defined. Managers have fewer protections under the Act than employees, and independent contractors have no protections under the Act at all. But a job title like "manager" and even a signed contract that states that you are an “independent contractor” are not always enough to exempt you from your legal rights as a worker. To be sure you are paid every nickel and dime you earn, it is important to know how the law works.

The BC Employment Standards Act applies to employees regardless of whether they are employed on a part-time, full-time, temporary or permanent basis. An “employee” is a person receiving or entitled to receive wages for work, and includes people being trained by an employer for the employer’s business, as well as people who are on leave from their work, and those who are not currently working at their job but who can be recalled to their job.

 

Employee or Manager?

Managers do receive some protections under the Act but are exempt from rules governing hours of work, overtime and statutory holidays that apply to regular employees.

The Employment Standards Regulation defines a manager as a person whose principle employment responsibilities are supervising or directing human or other resources, or a person employed in an executive capacity.

In most cases, determining who is a manager involves an investigation into the type of workplace duties an individual performs and the nature of the relationship between this individual and the employer. In some cases your job title may be “manager” even though the law would find that you’re actually an employee.

Let’s take the example of someone I’ll call Martha. Martha is a shift manager at a fast food restaurant where she gives direction to members of the team while also preparing food and taking orders from customers. She does not have the ability to discipline, hire, or fire staff, and she is not authorised to make any decisions about day-to-day operations like setting menu prices or hours of operation. She has a supervisor above her who she reports to, and the supervisor has to report to the restaurant owner. The limits of Martha’s actual work role means she is much more likely to be considered an employee under the Act than a manager.

However, because Martha’s employer considered her to be a manager, Martha was not being paid overtime wages. Martha filed a complaint with the Employment Standards Branch (the “Branch”), and the Branch determined that Martha was indeed an employee and not a manager, regardless of her job title, and was therefore entitled to receive overtime pay the same as any other worker. The restaurant was required to pay Martha all outstanding wages she was entitled to.

 

Employee or Independent Contractor?

Independent contractors are fully exempt from the protections in the Employment Standards Act. However, “independent contractor” is defined narrowly, and the onus is on the employer to demonstrate that a worker is in fact an independent contractor and not an employee entitled to the protection in the Act.

In order to prove that a worker is exempt from the protections in the Act, an employer needs to show that the worker is truly independent. Essentially, the employer needs to demonstrate that the worker is in business for themselves. In order to determine whether a person is an independent contractor or an employee, adjudicators from the Employment Standards Branch look at the degree of independence the worker has over their work, the control by the employer of the worker, and the worker’s opportunity for profit or loss.

For example, “Ronald” is a tile installer. A tiling company provided Ronald with an indefinite contract to lay tile at a rate of $25 per hour, 40 hours per week. The tiling company supplied all of the tools and materials for the work, set a schedule, and administered payments. The tile company refused to pay statutory holiday pay, vacation pay or overtime, claiming that Ronald was not an employee. Ronald filed a complaint with the Branch, which found that, as he was not free to pursue independent contracts, was economically dependent on the work that he performed, and his work was ultimately under the control of the company, he was an employee entitled to be paid all outstanding wages. 

The Employment Standards Act is there to protect workers. If your employer alleges that you are an independent contractor or manager and that you are therefore not entitled to basic protections, it is best to call the Employment Standards Branch directly or get in touch with an advocate.