Temp agency workers work months, sometimes years, alongside co-workers doing the same job but for less pay, fewer or no benefits, little protection against violation of their employment rights and no protection against termination. Temp workers typically earn 40% less than their co-workers hired directly by the company. That is why the Workers’ Action Centre and allies were happy to see two important proposals tabled in Bill 146 last December that would reduce incentives for employers to contract out unsafe work to temp agency workers and to avoid liability when workers wages go unpaid.
What’s in Bill 146 for temp agency workers
The government’s Bill 146 introduced some much needed reforms for temp agency workers:
- When wages go unpaid, both the temp agency and client company will be jointly responsible for paying the worker’s unpaid wages and overtime pay.
- Reduce incentives to contract out unsafe work to temp agency workers by putting injury and accident costs from workplace injury to temp workers on to the client company (not the temp agency as is currently the case).
But to fulfill the government’s goal of “enhancing protection of temporary help agency workers” and “help level the playing field for good employers” Bill 146 does not go far enough.
Client companies should be jointly and severally liable for all monetary and non-monetary entitlements under the ESA not just unpaid wages and overtime as Bill 146 puts forward. Without full joint and several liability for all standards, some employers who hire indirectly through agencies will still be able to avoid complying with the ESA.
But more than that, the government must seize the opportunity to remove employer’s incentives to drive down wages and income security for temp agency workers. Temp agency work is on the rise and replacing more stable and higher paying jobs. That is why Liberal MPP Harinder Thakar introduced private member’s Bill 159 to improve protections for temp agency workers.
New temp agency changes proposed under Bill 159
Bill 159 proposes to:
- Make sure that a temp agency worker gets 80% of the total wages that the agency gets for the work that is done. Currently there is no cap and workers can get less than half of what the agency receives from the company for the work that is done by the worker.
- Ensure that no more than 25% of the total staffing of a company is done by temp agency workers. Small business would be exempt from this requirement.
- Require all temp agencies to have a license to operate in Ontario. That license can be taken away if the agency does not follow these new rules.
Bill 159 is important because it recognizes that temp agency workers should not be paid substantially less than the people they work with that are hired directly by the company.
Legislators and policy makers in European countries, the European Union and International Labour Organization recognize that regulating employment agencies, even within a framework of protecting agency workers from abuse, serves to legitimize temporary work agencies in the process. That is why most of these bodies have tried to balance this legitimization of temp agency work by requiring equal treatment in wages and working conditions for workers hired indirectly through employment agencies. Ontario should follow suit – equal pay and working conditions for temp agency workers.
Bill 159 also rightly recognizes that some employers use temp agency workers to replace much of their workforce to shift employer responsibility and liability to temp agencies and may keep temp workers employed for years. But limiting the use of temp agency workers to 25% of the company’s workforce won’t address ‘perma-temps’. Temp agency workers should be converted to directly hired status after a certain period of time.
Temp agencies continue to violate workers rights. In an investigation blitz of temp agencies, the Ministry of Labour found 74% of temp agencies were in violation of employment standards; 48 agencies owed their workers over $90,000 in unpaid wages. So requiring agencies to be licensed and report every six months on how they are following the law is an important step in protecting workers rights.
Action needed for temp agency workers
The government of Ontario should take the action that is necessary to protect temp agency workers and support an economy founded on decent jobs:
- Client companies should be jointly and severally liable for all monetary and non-monetary entitlements under the ESA
- Make the client company liable for workplace injury or accident costs and experience rating for temp agency workers
- Temporary agency workers should receive the same wages and working conditions that the client company provides to its directly hired workers
- Remove barriers to permanent employment” by repealing s 74.8(1)8 which allows agencies to restrict, through contracts and fees, a client company from hiring an assignment employee within six months of the worker starting at the client company.
- Temp agency workers should be converted to directly hired status after a certain period of time with the same company.
- Licensing regime that requires reporting on compliance with ESA