Interpretation Guidelines Manual
British Columbia Employment Standards Act and Regulations

Employment Standards Regulation - Part 7 - Variances and Exclusions

ESR Section 37.1 - Taxi Drivers
Contents:

Summary
Text of Legislation
Policy Interpretation
Related Information
Summary

This section explains the employer’s responsibilities when hiring and employing a taxi driver and details the sections of the Act that do not apply to taxi drivers.

Top of page.
Text of Legislation

37.1.(1) If an employer leases a taxi to a taxi driver
(a) section 10 of the Act does not apply to a taxi driver driving the taxi, and

(b) the employer must pay a taxi driver any shortfall that arises if
(i) the taxi driver tracks hours under the lease arrangement on a per shift basis, and

(ii) the taxi driver does not recover in fares an amount which, in total, is greater than or equal to the lease payment for the taxi plus the minimum wage for each hour worked, averaged monthly.
(2) Sections 35, 40 and 42 of the Act do not apply to a person employed as a taxi driver.

(3) An employer who requires or allows a taxi driver to work more than 120 hours within 2 consecutive weeks must pay the employee for the hours in excess of 120 at least 1 ½ times the regular wage.

(4) An employer must pay a taxi driver any shortfall that arises if
(a) the taxi driver does not recover in fares an amount which, in total, is greater than or equal to the minimum wage for each hour worked, averaged monthly,

(b) the taxi is not leased by the employer to the taxi driver, and

(c) the taxi driver tracks hours under the employment arrangement on a daily basis.

Top of page.
Policy Interpretation

Under s 1 of this Regulation a “taxi driver” is defined as "a person employed to drive a taxi".

Determining the nature of the relationship

The first consideration is to determine if a person driving a taxi is an employee or an independent contractor for purposes of the Act. (Refer to the definition of “employee” in s.1 of the Act for the tests to be considered.)

There are four different types of Taxi Operators, that typically have the following characteristics:
Owner/Operator
  • Owns a taxi cab as an independent or as part of a larger corporate entity
  • Purchases a license to drive the taxi cab
  • May employ other drivers
  • May receive dividends on corporate asset revenues
  • Purchases and maintains the taxi cab
  • Pays GST
  • Pays Workers Compensation premiums, ICBC premiums, EI premiums
  • Incurs profit or loss
Long Term Lease Operator:
  • Same as Owner/operator with the following exceptions:
    • Has a written lease agreement with the owner/operator
    • Does not own the taxi cab
    • Does not own the license to drive the taxi cab
    • May or may not maintain the taxi cab
    • Operates the taxi cab as his/her own business
  • May have direction or control over other drivers
  • May hold voting shares in the larger corporate entity
  • May sub lease the taxicab to other lease operators
Short Term Lease Operator:
  • Same as Long Term Lease Operator with the following exceptions:
    • Has a written lease agreement
    • Works on a short term basis
    • Guaranteed a car to drive on each shift he/she has agreed to in the written lease agreement, except in circumstances beyond the control of the leasor
    • Normally drives the taxi on the shift covered by the lease agreement that is not of a continuing nature
    • Responsible for damage, fuel and cleanliness of the taxi cab
    • Responsible for all motor vehicle infractions and parking tickets while driving the taxi cab

Individuals meeting the above criteria may be determined to be an employer or independent contractor. Each case will be determined on its own merits.
Taxi Driver:
  • Hired to drive the taxi
  • Does not set work hours
  • May receive a commission on gross daily revenue and/or a prescribed wage
  • Does not pay for fuel or expenses
  • Cannot control the availability of work
  • Has no ability to hire replacement drivers; can recommend, but control rests with the employer
  • May be required to wear a uniform
  • Subject to discipline and dismissal
  • Not responsible for maintenance on the taxi
  • Not responsible for the purchase of fuel or supplies
  • Not responsible for Workers Compensation premiums, ICBC premiums, or any other statutory employer deductions
  • No financial investment
  • Does not own or control the license
  • Taxi dispatch is provided at no charge to the employee
  • Individually files as an employee for CCRA purposes.
An individual performing work as described in “Taxi Driver” would likely meet the test of being an “employee”. A decision would be determined based on the particulars of the case.

Identifying the Employer

The Director may associate an owner/operator with the dispatch company pursuant to section 95 if they are both operating the same business and neither could operate without the other.

Identifying if a vehicle is a “taxi”
  • In the definition of “taxi driver” in section l of this Regulation there is no reference to “limousine driver”. In view of the fact that the definition does not include a limousine driver, a limousine driver is not considered to be a taxi driver for purposes of the Act. Similarly, a limousine is not considered to be a “taxi” for purposes of the Act.

  • There is also a difference between a “taxi” and a bus. A bus has a set fare (including no charge to the user) and travels a defined route according to a set schedule. A taxi has no such restriction. By way of an example, the "Airporter" from downtown Vancouver to Vancouver International Airport (Richmond) is a bus service, not a “taxi” service.
Subsection (1)(a)

Section 10 of the Act does not apply to taxi drivers.

Subsection (1)(b)

This subsection applies to those taxi drivers who lease their vehicle. When a taxi driver leases a taxi on a shift basis and records the hours that they are available for work according to the lease arrangement, the taxi driver is entitled to receive an amount that is greater than, or at least equal to:
  • the amount of the lease payment; plus
  • minimum wage for each hour worked (including time available for work), averaged on a monthly basis.
This amount can be in the form of fares retained. However, if the amount of money retained through fares is not equal to the above amount, the employer must pay the difference, or the “shortfall” as it is referred to in this section. Section 16(2) of the Employment Standards Act prohibits an employer from withholding, or deducting all or part of an employee’s wages from a subsequent pay period to cover this “shortfall”.

Subsection (2)

Pursuant to subsection (3), below, taxi drivers have special overtime rules and are specifically excluded from the following overtime provisions in the Act:
  • Section 35 Maximum hours of work before overtime applies
  • Section 40 Overtime wages for employees not working under an averaging agreement
  • Section 42 Banking of overtime wages
Subsection (3)

Where an employer requires, or allows, a taxi driver to work more than 120 hours within 2 consecutive weeks, they are entitled to be paid as follows:
  • 1-1/2 times their regular wage for all hours worked in excess of 120 in a consecutive 14-day period, beginning on a Sunday. (Refer to the definition of “week” in section l of the Act.)
Subsection (4)

This subsection applies to those taxi drivers who do not lease their vehicle. In this case, where a taxi driver tracks hours on a daily basis, in accordance with an employment arrangement, and does not recover in fares an amount that is greater than or at least equal to minimum wage for each hour worked on a monthly basis, the employer must pay the difference, or the “shortfall” as it is referred to in this section.

Section 16(2) of the Employment Standards Act prohibits an employer from withholding, or deducting all or part of an employee’s wages from a subsequent pay period to cover this “shortfall”.

Other considerations in dealing with taxi drivers
  • What is Work?

    A taxi driver is deemed to be at work when she or he is available for dispatch, and is seeking to obtain a fare.

    Examples

    A taxi driver cruising around town looking for a "flag" is considered to be at work. Similarly, so is a taxi driver waiting in queue at a cab stand, including that at Vancouver International Airport.

    A taxi driver "on-call" at his or her private residence is not considered to be at work. Similarly, a taxi driver who, while "on-call" during his or her shift, has left the taxi to attend to personal matters is not considered to be at work.

  • Section 16. Minimum Wage

    A taxi driver must be paid at least minimum wage for all hours worked, plus recover the amount of the lease payment, where applicable, and any other cost associated with the operation of the taxi, including insurance, on a monthly basis. Each pay period, a driver must be paid at least minimum wage for each hour worked.

  • Section 17. Paydays

    Taxi drivers may have their wage entitlement reconciled on a monthly basis. The calculation of entitlement to minimum wage, when compared to commissions earned (fares retained) is done over the period of a calendar month. The employer calculates the difference between wages earned in a month, and minimum wage for all hours worked. It should be noted that a taxi driver is entitled to the minimum daily pay provisions under section 34 of the Act.

    Although the earnings reconciliation is done on a monthly basis, taxi drivers are entitled to be paid at least semi-monthly in accordance with s.17 of the Act. It is permissible to provide a mid-month advance, however, the amount of the advance should be at least equal to the amount of hours worked at minimum wage. The amount of the advance does not have to take into account the amount of any lease payment made. However, the reconciliation of earnings against expenses must be done at the end of the month.

  • Payroll Records

    The employer is required to gather the information required under s.28, Payroll records, and to keep it for a period of 2 years after employment terminates. While it is possible for the employer to rely on employees to provide the information, their failure to do so does not relieve the employer of the record keeping requirements. For instance, the employer may ask employees to record meal breaks taken, and to inform the employer of those occasions when they are not taken. When employees fail to do so, their failure has not excused the employer from the requirement to keep track of breaks.
S.32 - Meal Breaks

It is possible for meal breaks to be combined so as to allow for an hour off work in a shift of up to 11 hours. In such instances, the employee would work five hours, then take a half-hour break, then take another half-hour break, then work five hours.

Issue: Taking of Breaks

Situation: Given the nature of the business, it is impractical for the employer to schedule specific times for taking breaks. For example, a taxi driver is part way into a paid trip when five consecutive hours of work are completed. It is poor customer relations to park the vehicle so as to take a break, or to transfer the passenger into another one, yet it is an additional cost of paying the employee to work through the break, especially when the employee was idle for significant periods of time before and after that trip.

Question: How does an employer both comply with the requirements of s.32 and at the same time avoid the cost of working an employee during a meal break?

Answer: The employer will inform its employees to take at least a ½ hour meal break during an eight-hour shift and 2 meal breaks of at least ½ hour each during a shift longer than 10 hours. The breaks will be taken to ensure the driver does not work more than 5 consecutive hours without a break.

Top of page.
Related Information

Employment Standards Tribunal Decisions

Castlegar Taxi (1988) Ltd, 84 D.L.R.(4th)148

Victoria Taxi (1997) Ltd., (BC EST#D601/97)

Vancouver Cabs (1989) Ltd.,( BC EST #D385/98)

Kaycan Ltee/Ltd. (B.C. EST #D606/97)

Nove-Isle Foods Ltd. (BC EST #D411/98)

Related sections of the Act or Regulation

Top of page.