When Bill 88, or the Working for Workers Act, came into effect in April 2022, it created amendments and exceptions to the Employment Standards Act (the “ESA”). While many new rights were created under these amendments, business consultants and information technology (IT) consultants in Ontario became exempt from the ESA. Employers hiring business or IT consultants must be aware of the new legislative change and be mindful of its potential impact.

The Consultant Exception Under Ontario’s Employment Standards Act

Under the recently-amended Employment Standards Act, workers meeting the definition of a business or IT consultant are not entitled to the ESA’s minimum protections and standards, including termination entitlements, work hours, leaves of absence, and overtime.

This exception applies to workers who would, but for their status as a business or IT consultant, be covered by the ESA. It does not, however, impact whether a person can be considered an “employee” under the ESA.

“Business Consultant” and “IT Consultant” Under the ESA

Section 1 of the Employment Standards Act defines a “business consultant” as a person who provides services or advice regarding the performance of a business or organization’s “operations, profitability, management, structure, processes, finances, accounting, procurements, human resources, environmental impacts, marketing, risk management, compliance or strategy of the business or organization.”

The same section defines an “IT consultant” as an individual who provides services or advice to an organization or business regarding their technology systems, which may include “advice about or services in respect of planning, designing, analyzing, documenting, configuring, developing, testing and installing the business’ or organization’s information technology systems.”

Exclusion From the Consultant Exception

A business or IT consultant may fall under the Employment Standards Act’s consultant exception only if all four of the below conditions are met:

1. The individual meets the ESA’s definition of a business consultant or an information technology consultant.
2. The business or IT consultant provides advice or services either through a sole proprietorship under a business name that is registered under the Business Names Act or through a corporation of which the consultant is a director or shareholder party to a unanimous shareholder agreement.
3. The business or IT consultant and the employer have a written agreement that sets out specific terms, including how much and when the employer will pay the consultant. The written agreement must state the consultant’s hourly pay rate, which cannot include bonuses, benefits, travel allowances, expenses or commissions, and must be $60 or greater per hour.
4. The business or IT consultant is paid the appropriate amount at the appropriate time per the terms set out in the agreement.

If the above four conditions are met, the exception will be applied, and the individual will not be covered under the Employment Standards Act. However, if one or more of the four conditions are not met at any point, the exception will not apply, and the individual may be entitled to certain rights under the ESA.

Employers Should Proactively Review A Worker’s Status

In light of the changes to the Employment Standards Act over the past year, employers should proactively review any existing agreements they have in place with consultants to determine whether such relationships may be affected by the exception.

It is essential for employers to determine whether a consultant is an employee or an independent contractor and whether the ESA applies to the individual in question. If a consultant is deemed an employee entitled to the benefits of the ESA, the employer should subsequently assess whether the consultant is excluded from the ESA’s protections based on the four criteria set out above.

The amendments do not specifically create additional requirements or substantial cost impacts for businesses or employers. Instead, the exception provides employers and workers with certainty regarding their employment status and can enhance the options available to impacted consultants within Ontario’s labour market.

Willis Business Law Provides Windsor-Essex County Employers With Robust Advice on Employment Standards & Consultant Status

The trusted employment lawyers at Willis Business Law offer employers across Ontario personalized, comprehensive legal solutions regarding employee, contractor, and consultant status. We remain current on legislative amendments and provide proactive advice to ensure employers remain compliant and mitigate the risk of wrongful dismissal claims relating to worker misclassification. Our employment team also represents employers in all matters relating to employment agreements and workplace policies concerning worker status.

Conveniently located in Windsor’s financial district, Willis Business Law assists clients in Windsor-Essex and the surrounding areas. To schedule a consultation with a member of our team, please reach out to us online or call 519-945-5470.