On October 18, the Ontario government announced it will be introducing new restrictions and licensing requirements for temporary help agencies and recruiters. These measures form part of proposed legislation to enhance worker protections, which, if passed, could require licenses starting in 2024.

Proposed Rules Add Licensing Rules and Create Enforcement Powers

The new legislation proposed by the Ministry of Labour, Training and Skill Development, would require temporary help agencies and recruiters who provide domestic and foreign labour to Ontario to apply for a license. This licensing requirement also allows the government to shut down any agency or recruiter breaching employment standards or engaged in labour trafficking practices. Applicants under the new rules will be required to provide an irrevocable letter of credit as security for any unpaid wages owed to workers.

The government also plans to create a dedicated team of inspectors responsible for recovering unpaid wages and combatting illegal labour practices. This team would be hired before the new licensing system takes effect to proactively ensure compliance with the new requirements.

The new rules, if passed, would include penalties against temporary help agencies and recruiters who breach basic safety and employment standards laws. These penalties apply regardless of the jurisdiction in which the agency or recruiter operates, so long as they source workers to Ontario.

Additionally, companies using unlicensed temporary help agencies or recruiters can be required to repay unpaid wages or illegal recruitment fees paid to deceitful recruiters.

The proposed rules also aim to protect temporary foreign workers from exploitation through practices used by some temporary help agencies, such as the withholding of workers’ passports or forcing people to do unsafe work.

The Minister of Labour, Training and Skills stated that this legislation would create the strongest temporary worker protections in Canada and would “balance the scales” between vulnerable workers and big businesses. In a speech at a labour union gathering, Minister McNaughton said:

“I think the pandemic has really highlighted how these big multibillion-dollar corporations, these elites, have taken advantage of people, and we need to ensure that we have a society where workers are protected.”

The rules are also intended to prevent businesses from paying less than minimum wage and using the savings to undercut rates, thereby gaining an unfair advantage over their competitors.

Enforcement Campaign Found Widespread Employment Standards Violations

According to the Workplace Safety and Insurance Board (WSIB), there were over 2,200 temporary help agencies in Ontario as of July 2020. These agencies, which hire seasonal and short-term workers in Ontario, saw an increase in revenue of 34% between 2015 and 2019. Additionally, in 2019, temporary help agencies employed 128,000 full-time workers in 2019, representing 2.6% of the workforce in the province.

An enforcement campaign by the Ministry of Labour, Training and Skills conducted in 2020-2021 found evidence of $3.3 million in unpaid wages across certain sectors (farms, retirement homes, food processing and warehousing facilities). These included minimum wages, overtime, vacation and public holiday pay. The Ministry says approximately half of these wages have been recovered. Other infractions included record keeping issues, misclassification of positions and non-compliance with legislated hours of work.

In response to the government’s announcement on October 18, the President and CEO of the Tourism Industry Association of Ontario noted that many international workers come to Ontario to work in the tourism industry, including hotels, restaurants, and other attractions. He praised the government for “taking the lead to ensure that every worker in [Ontario] is protected against unscrupulous recruitment practices, and labour trafficking.”

New Law Viewed as Change in Government Direction, Criticized as Falling Short

The CBC stated these new protections are a change in direction for Premier Doug Ford, who rolled back labour reforms under pressure from the business community after his election in 2018. Those reforms required a minimum of two paid sick days, equal pay part-time and casual staff to be paid the same as full-time staff, and measures to make it easier for some sectors to unionize. Upon coming to power, Premier Ford froze the minimum wage for two years, with it increasing by 10 cents to $14.35 on October 1.

Some have stated that the proposed rules don’t go far enough to protect vulnerable workers. As reported by the Canadian HR Reporter, the Ontario Public Service Employees Union believes that more labour inspectors are needed to continue exposing unethical labour practices. Unifor called for the enactment of regulations under the Workplace Safety and Insurance Act to penalize the actual workplaces where temporary workers are injured.

Western University health researcher Susana Caxaj, who specializes in migrant farm worker rights, criticized the government’s plan in an interview with CTV News London:

“People who come to work in Canada under temporary visas are vulnerable. It’s a very simple and underwhelming step towards a very complex solution. And the provincial government, to some extent, is skirting their more comprehensive responsibility to protect this population.”

Contact Toronto Employment Lawyers Grosman Gale Fletcher Hopkins LLP for Advice on Worker Protections

Employment and labour laws are complex and are always changing. Employees cannot enforce rights they aren’t aware of, and employers must ensure they aren’t exposed to liability by running afoul of the law.

Earlier this year, the Minister of Immigration, Refugees and Citizenship stated that immigrant workers will be needed to alleviate labour shortages caused by COVID-19. As the use of temporary help agencies and recruiters in Ontario increases, workers and companies alike will need legal guidance to navigate the rights and restrictions set out in the various employment and labour laws in Ontario.

For over 30 years, Grosman Gale Fletcher Hopkins LLP has established itself as one of the leading labour and employment law firms in Canada. Whether you are an employee seeking advice about your rights under existing and proposed legislation, or an employer concerned about your responsibilities under worker protection laws, we can help. Our lawyers are committed to providing clear, dependable guidance to our clients. Contact us at 416-364-9599 or online to schedule a consultation.