Here’s a shocking fact: virtually all dental offices in Canada are violating labour code. As the labour shortage continues to drag the dental industry into a chaotic skill drain, dental offices across Canada are heftily relying on temporary dental hygienists and assistants to keep them afloat. Unfortunately, the majority do not classify these temporary workers as employees.
You probably consider them contractors and easily terminate them without an HR strain. Unfortunately, this is illegal.
While dental offices have largely been spared from any tangible CRA or legal threats from this practice for decades, the tides are rapidly shifting. Here’s what you need to know about the legality of temporary dental assistants and hygienists, and how a simple classification mistake could cost you tens of thousands of dollars (and possibly your business).
The Rise of Temporary Dental Assistants & Hygienists in Canada
Canadian dental offices are facing an unprecedented shortage of staff. According to the B.C. Dental Hygienists’ Association, severe staffing shortages (especially hygienists and assistants) have led to a reduction in available dental appointments across the board — substantially cutting into once rock-solid profit margins. And no province has been spared from the so-called “Great Attrition” of dental employment.
But the dental staffing shortages run deeper than pandemic-related frictions. Back in 2019, over one-third of dental offices in Canada had unfilled positions. During that decade, around 3 new dental assistants graduated for every dentist. Today, that number is down to a near 1:1 ratio.
The shortage isn’t going away anytime soon. In fact, it’s at an all-time high.
So, how do dentists navigate this complex horizon of labour shortage? For most, the answer is simple: they find temporary dental staff. However, unlike our American counterparts, dentists in Canada have very few legitimate options available to them. Instead, most end up on semi-hidden Facebook groups drenched in sketchy word-of-mouth referrals. Worse, some call unadvertised phone numbers that ring in a dingy basement at an unregistered “temp agency” business.
Rallying for help often feels less like using tools or legitimate staffing services and more like ordering a scotch from a blind pig on Prince Edward Island in the 20s. In turn, very few dental offices truly understand the mechanisms required to legitimize temporary staff. And this once-small problem has now turned into a significant threat to the livelihood of most dental offices across Canada.
Understanding the Problem
Temporary dental employees are not independent contractors, ever. In turn, most dental offices in Canada are incorrectly classifying their temporary workers — opening them up to significant fines, tax code violations, and penalties.
But, let’s dive a little deeper:
Employee vs. Self-employed: The Definition
All temporary dental workers in Canada should be classified as employees — regardless of their working conditions, responsibilities, or otherwise (for an exception to this rule, see the WORKFORCE section).To understand whether an employee should be classified as an employee, you follow the CRA guidelines. The CRA looks for the following:
- The level of control you have over the temporary workers
- Whether or not you provide tools and equipment
- Whether or not temporary workers can subcontract work or hire assistants
Let’s break each of these down:
The Level of Control
If you can control a worker, they are an employee. The important part here isn’t whether you actually exercise that control. It’s whether you can. For example, the CRA gives the following situations in which a worker would be considered an employee.
- “The relationship is one of subordination. The payer will often direct, scrutinize, and effectively control many elements of how and when the work is carried out.”
- “The payer controls the worker with respect to both the results of the work and the method used to do the work.”
- “The payer decides what jobs the worker will do.”
- “Where the schedule is irregular, priority on the worker’s time is an indication of control over the worker.”
- “The worker receives training or direction from the payer on how to do the work. The overall work environment between the worker and the payer is one of subordination.”
Across the board, dental offices direct temporary workers. You tell hygienists which patients to see, how to effectively do their duties, and where to work. Again, you can’t bypass this rule by simply trying to not exert control. The fact that you can exercise control over their duties is the important part — not whether you actually exercise that right.
By definition, dental offices have that right. Thus, all temporary dental employees are subordinates by control alone.
Tools and Equipment
Who owns the tools and equipment used to do work is also a tell-tale sign of an employee vs. a contractor. Unless your temporary dental hygienists are bringing in their own x-ray machines and a complete toolkit, they are employees by definition.
Here are some examples of situations where a person is an employee, not a contractor given by the CRA:
- “The payer supplies most of the tools and equipment the worker needs. In addition, the payer is responsible for the repair, maintenance, and insurance costs.”
- “The payer retains the right of use over the tools and equipment provided to the worker.”
Both of these are unanimously true for dental hygienists. But, let’s say that someone skirted this rule. You had a dental hygienist bring all of their own tools and didn’t let them use the x-ray machine (which still wouldn’t count), you would still have control over them. In reality, you have control and provide the tools.
Can your temporary dental hygienists or assistants subcontract their work out or hire their own assistants? Probably not, right? This makes them an employee. Here are some situations where a temporary worker would be considered an employee:
- “The worker cannot hire helpers or assistants.”
- “The worker does not have the ability to hire and send replacements. The worker has to do the work personally.”
In addition to these, things such as financial responsibility (employees are not responsible for operating expenses, contractors often are) and responsibility for capital investment and management (employees have no stake in the business, independent employees have a stake and also have a business presence) play a role.
Across every metric, every definition, and every ruling, all temporary dental workers are defined as employees. If you want a second opinion, discuss it with your tax person or lawyer. It’s a no-brainer.
For the sake of brevity, unless you are working with a temporary agency that fully employees all of its temporary workers (we are currently the only service in Canada that does this), you have to classify all temporary dental workers as employees — period.
Fines, Penalties, Tax Code Violations, and Headaches (Oh My!)
Let’s talk about the stick. In the past, dental offices have been virtually untouched by labour code violations related to worker misclassification. In fact, employment-related lawsuits have been historically uncommon in Canada. This is changing, fast. Over the past two years, a significant number of lawsuits related to employee misclassification have popped up in Ontario. In fact, lawyers across Canada are seeing unprecedented numbers of lawsuits associated with employee classification — a shift in the tides of the past decades.
Ever since Ontario’s Bill 148 — aptly named the “Fair Workplaces, Better Jobs Act of 2017” — there has been remarkably increased scrutiny on employee classification across Canada. This pressure comes across virtually every lever. The CRA is ramping up audit activities and putting extra pressure on tax evasion strategies for small businesses. The Ontario Ministry of Labour is hungry for fines related to employee misclassification. And lawyers are bloodthirsty for labour code violations.
So, what happens if you misclassify workers? We’ve already talked about some examples in the past, but when we dive into the theoretical (and entirely plausible) damage misclassification can have on your dental office, it’s mind-shattering. To be frank, all three forces (lawsuits, fines, and penalties) are increasing across Canada. And dental offices are in a very risky position over the next decade.
Let’s start at the top:
CRA Fines Associated With Temporary Dental Employee Misclassification
Misclassifying workers opens you up to double the audit risk. Not only are you at an increased risk for audits if the CRA flags you for suspicious payroll activity, but the CRA can easily flag that temporary dental hygienist you hired 6 months ago and trace activity back to you.
And once they investigate you, things can go south — fast. For starters, the CRA will scrutinize every single little detail of your payroll and beyond. Obviously, they are going to hit you with payroll backpay for the misclassified worker (along with backpay for every misclassified worker over the course of your business). But they will also poke and prod the rest of your books.
We’re all human. We’re not perfect.
The CRA will probably find other small issues. And, for each one they find, you’ll get a hefty penalty. At the very minimum, you will have to deal with all of the below:
- A formal investigation (and the cost of paying tax experts, lawyers, etc.)
- A bill for outstanding premiums for federal taxes, CPP, UI, etc. (with a good chunk of interest thrown into the mix)
- Substantial fines (these can add up — quickly!)
- A wonderful expose when you’re found guilty of a provincial offence!
So, not only will you certainly have a chunky bill at the end of your audit (along with some public shaming). But you significantly increase your risk of getting an audit in the first place. Yikes!
The CRA only deals with the tax component of misclassification. You still have to answer to the employee. And we all know that lawyers quickly shed all cliches of “Canadian kindness” when it comes to litigation.
You can get sued for misclassifying an employee. Often, monetary damages (at the minimum) include things like wages, overtime pay, sick leave pay, worker’s compensation, and tax form consequences.
While some dental offices may consider themselves to be “too small” to face employee lawsuits, these lawsuits are a tangible threat to businesses of all sizes.
So far, we’ve discussed tangible costs. But being sued and found guilty of a provincial offence does more than just hit your bottom line; it degrades your reputation. Of course, it’s not easy to put a price tag on reputation. But it’s actually the single most valuable component of your practice. Reputation alone drives nearly 40 percent of market capitalization. And 71 percent of patients look at online reputation before deciding which dental practice to visit.
Worse, reputation damage from public exposure can cause a feedback loop of the hiring issue that turned you toward temporary workers in the first place. Nearly 70 percent of job seekers would reject a job offer by a dental practice with a poor reputation — even if they were currently unemployed.
The long-term damage associated with misclassifying workers is nearly impossible to calculate. But for the majority of practices, this is the primary source of pain. Patient and employee attrition happens over months, years, and possibly even decades. Once you’ve been exposed, minimizing the damage is extremely challenging.
What Other Options Do You Have?
All hope is not lost. Theoretically, dodging this regulatory bullet simply requires you to onboard each and every temporary worker that enters your business. But this comes with some hefty costs, including:
- Costs associated with staff hours spent filing paperwork and filing out forms
- Costs associated with increased tax complexity
- Costs associated with missed opportunity (what else could your staff have been doing)
From start to finish, onboarding averages around 2 hours of time. At the very minimum, this costs you an extra $100 in costs per temporary employee. However, this also gets more complicated. Each temporary employee creates new tax situations you have to deal with, and you’ll need to pay tax professionals to aptly deal with any potential road bumps. Plus, you’re paying workers’ compensation, taxes, etc. for each and every temporary worker.
Suddenly, the cost of temporary dental assistance is much steeper than you think. For many offices, a single day of temporary assistance can rack up a few hundred dollars in extra costs (not including the hourly cost of the temporary worker + any extra fees from the temp agency) — offsetting much of the benefit of getting the temporary worker in the first place.
WORKFORCE: The All-in-one Solution for Dental Offices in Canada
What if you didn’t have to employ your temporary workers? What if you could instantly find reliable and experienced temporary dental assistants and dental hygienists and have them rapidly take over shifts without worrying about employing them or getting bled dry by the CRA and lawyers?
WORKFORCE Dental Staffing is Canada’s first end-to-end dental staffing solution. We employ every temporary dental employee ourselves. And we leverage a world-class application and best-in-class solutions to find temporary dental help quickly, affordably, and with purpose. Backed by our decades of experience as leaders in construction, manufacturing, transportation, and industry, WORKFORCE Dental Staffing is reshaping the dental staffing landscape.
Here’s the best part: we’re significantly cheaper than those basement temp agencies and shady Facebook groups. Not only are our upfront rates comparable, we don’t cost you thousands in downstream onboarding costs or open you up to tens (or even hundreds) of thousands of dollars worth of penalties, taxes, and lawsuits. That’s cost-effective, highly-vetted temporary or permanent workers backed by technology, industry-leading support, and experience. What more could you ask for?
Want to learn more about how WORKFORCE can help you mitigate staffing concerns without giving you regulatory headaches or costing you thousands in downstream costs? Contact us. We’re revolutionizing the way dental staffing works in Canada — one office at a time.