Oct 21, 2021  By John Hyde

Employers may Need to Think Twice about Hiring through Agencies and Recruiters

On October 18, 2021, the Ontario government proposed legislation that would require both temporary help agencies (THAs) and recruiters to become licensed prior to operating in the province. Under the proposed regime, enforcement officers will investigate whether THAs and recruiters are engaged in exploiting and trafficking both domestic and foreign workers.

As will become clear, Ontario employers have a number of important responsibilities when using THAs and recruiters, especially in relation to foreign national workers. Indeed, the government’s proposal would assign employers important duties, and thus add to the requirements provided under the Employment Protection for Foreign Nationals Act (EPFNA).

Employer Responsibilities under the Employment Protection for Foreign Nationals Act

Under the EPFNA, employers are subject to stringent record-keeping requirements which will become all the more important if the province’s proposed legislation passes.

As the law currently stands, businesses employ foreign national workers are required to record the name and address of the company to which they have paid a fee for providing the worker, as well as the date of the payment and the amount.

In addition, employers are required to retain these records for seven years after they no longer employ the worker, or the worker becomes a permanent resident. Under both the EPFNA and the Employment Standards Act, employers are also required to ensure that such records are readily available for inspection by an employment standards officer.

As the above makes clear, employers not only have a legal relationship with workers, but also with the agencies and recruiters who supply the labour. While the aforementioned record-keeping requirements are important for employers to keep in mind, the legislation proposed by the provincial government will impact employers in far more significant ways, if passed.

Ontario’s Proposed Legislation will Penalize Employers for Using Unlicensed Agencies and Recruiters

The proposed licensing mandate is important for employers, as it can impact their operations and liability in significant ways.

To begin, Ontario’s regime would allow officers to penalize employers for using unlicensed THAs and recruiters, as well as the unlicensed parties themselves. Thus, the requirement for employers to keep tabs on who has supplied workers to them, will serve to make illegal choices more transparent under the new law, should it pass.

In this way, the proposed legislation requires employers to act responsibly when selecting the agencies and recruiters they use. It should be clear that an agency or recruiter that does not become licensed creates a significant problem for employers who use their services.

If the legislation in question passes, Ontario employers will need to be increasingly diligent when agreeing to accept workers from various agencies and recruiters. Stated differently, employers will not be able to turn a blind eye to the actions or credentials of those supplying workers and, expect to get away with it.

As well, if an employer has used a THA or recruiter in the past who does not comply with the licensing requirement, the employer must find a licensed alternative or risk being penalized under the law. 

Employers can also be Required to Repay Workers for Illegal Fees Charged by Recruiters

In addition to the proposed changes centering upon licensing, employers also need to understand that they may have to repay workers if they have used a deceitful recruiter who charged illegal fees. Again, this forces employers to be more considerate of who they use to supply workers, and to make these choices more thoughtfully. 

Much like the above, this potential liability serves as a reminder that employers have an active role in protecting vulnerable workers, and cannot simply rely upon those who supply the labour to make the right choices. Make no mistake: though the proposed legislation is geared towards THAs and recruiters, there is much at stake for employers, as well.

The Bottom Line for Employers

If you are an employer who uses these services when working on various jobs, you must understand the important legal implications currently at play, and those which may shortly impact your duties and liabilities. Moving forward, we will continue monitoring the legislation and any updates.

If you have any questions or concerns about your workplace or workforce, please do not hesitate to contact us for expert legal advice and guidance.

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