B.C. government described bicycle couriers as employees, not contractors (from 1996)
In this 1996 article, I reported on how the then-NDP government responded to courier companies that didn't offer vacation pay to some of its employees.
The Vancouver office of the provincial employment-standards branch has launched a crackdown on the bicycle-courier industry that will result in several companies paying thousands of dollars to their workers. On September 11, owners of about 30 nonunion companies were ordered to bring their payroll records to a meeting, which the Georgia Straight also attended, at the B.C. Utilities Commission hearing room in downtown Vancouver. Government industrial-relations officers Chris Finding and Dave Ages told the courier-company owners that it is illegal under the Employment Standards Act to describe bicycle couriers as contractors and then avoid paying for statutory holidays and vacations. In addition, they said, it was unacceptable to charge bicycle couriers rental fees for communications equipment and uniforms.
“You cannot require your employee to pay your business costs,” Finding told the owners. “In fact, it’s a violation of the act.”
Finding said the branch is dealing with too many complaints from bicycle couriers. “In our downtown office, we get a steady flow of couriers, and they’re not all delivering packages to us,” he commented.
The companies were given two choices: either agree to conduct a “self-audit” and identify how much money they owed their current employees for the past two years, as is required under the act, or the branch would conduct its own audit on all past and present employees and order the companies to pay everyone. At the end of the meeting, each company was assigned to an employment-standards officer.
“We will have in our possession copies of their records, so we can verify that the audit has been done in accordance with the act,” Ages told the Straight. “The self-audit agreement specifies the issues that must be audited. In general, that is the three big issues that we get over and over again, which is stat holidays, vacation pay, and deductions from wages, basically for uniforms and radios.”
This is seen by some as a possible precursor to similar actions against larger industries that often define their workers as contractors, such as the garment, taxi, trucking, and car-courier industries. At the meeting, Finding shocked many in the room when he said that he didn’t see any significant difference between bicycle couriers and car couriers—both groups should be classified as employees. “You can rest assured what starts here will end up there,” Finding said.
According to one courier-company owner, Finding’s comment has provoked a flurry of phone calls among those in the industry who fear they might face heftier penalties in the future for classifying drivers as contractors. Tom Delahooke, president of V.I.P. Courier Service, told the Straight he will have to pay out a total of $15,000 between his five bicycle couriers, who are paid straight commission. He said larger companies will have to pay much more as a result of the branch’s actions.
“If they tried to pull this with the drivers, the entire industry would be out of business,” Delahooke said. “We would be looking at a quarter-million dollars.” He added that any attempt to have all car couriers classified as employees would result in far higher costs being passed along to customers.
B.C. Trucking Association president Paul Landry, who didn’t attend the September 11 meeting, said he will discuss this issue with employment-standards branch director Jill Walker on September 20. A moratorium on applying the Employment Standards Act to the trucking industry expires at the end of this month, and the issue is now before cabinet.
“It’s hard to imagine government intervention in any other aspect of our lives that holds such negative implications,” Landry told the Straight. “It’s frightening, and I guess what I find disturbing to a certain extent is there seems to be a rather cavalier mind-set within the branch in the sense that the financial implications don’t seem to be taken very seriously. You can’t just take hundreds and hundreds of thousands of dollars out of a company that doesn’t have that money and expect them to be around tomorrow.”
At the September 11 meeting, Finding said the courts have established several benchmarks for determining the difference between contractors and employees. He said the biggest determinant is “control and direction”. Bicycle couriers, he said, have radios and pagers and are dispatched to jobs. “On that criteria alone, bike couriers can be considered employees,” he said.
The second determinant is “chance of profit and risk of loss”. Finding said that by applying this test, bicycle couriers could not be considered contractors because there isn’t much chance for great profit or enormous loss. The third test—“who owns the equipment?”—again favoured classifying bicycle couriers as employees, he said, because the only equipment they own is a bicycle. Another test asks if an ordinary person would see these workers as being company employees; again, Finding said, this favoured classifying bicycle couriers as employees. “On almost no basis can you see these people as independent contractors,” he said.
Later during the meeting, Ages told the courier-company owners that they would have to give cheques to the branch by November 1, which would be distributed to employees. He added that the self-audit agreement does not preclude former employees from filing complaints.
At that point, from the back of the room, Delahooke said in a loud voice: “People who have been fairly compensated are being treated to a windfall profit.” A few moments later, Finding said that similar actions have been taken in the nonunion fish-packing, cement, and tree-planting industries.
Two days later, in his East Vancouver office, Delahooke showed payroll records to the Straight that indicated one of his bicycle couriers makes about $2,200 a month. A car courier, one of his best, earns more than $50,000 per year. “To a large extent, it’s a win-win situation,” he said, pointing out that bicycle couriers keep between 60 and 66 percent of the cost of delivering a package. They pay $50 per month to rent communications equipment, a price that he said is below cost.
Delahooke said he could easily change the way bicycle couriers are paid to conform with the rules for employees under the act, but this could create much larger problems with the car couriers because of the amount of paperwork. “We didn’t anticipate that they’d say, ‘Turn the clock back and give them 15 grand,’ ” Delahooke said. “Some people have been warned 18 months ahead of time, so they’ve had a chance to change it so they have no exposure. We weren’t warned.”
He said the branch should deal with bad employers rather than change the way the industry is structured. “You don’t use a sledgehammer to crack a nut.”
The employment-standards branch officers recommended that the car-courier companies pay mileage charges to their workers. Delahooke said this could result in higher amounts going to drivers who travel more miles and still deliver fewer parcels than efficient drivers. “If you get somebody who’s hopelessly incompetent, what are you supposed to do? Subsidize their incompetence?” Delahooke asked. “Do you top them up to minimum wage because they’re useless?”