The Ontario government will introduce legislation that would require temporary help agencies (THAs) and recruiters to have a licence to operate in the province. Proposed changes would enable officers to levy penalties against an unlicensed THA or recruiter or a business that is using an unlicensed operator. Those who use deceitful recruiters could also be required to repay workers for illegal fees charged. Ontario is also proposing to hire a dedicated team of officers to crack down on THAs and recruiters who are exploiting and trafficking domestic and foreign workers.
The Ontario Trucking Association (OTA) is applauding the Ford Government and Monte McNaughton, Minister of Labour, Training and Skills Development for introducing these measures which will help the trucking industry in its fight against the underground economy scheme known as Driver Inc.
“Inspections by ministry officers have shown that there are multiple temporary help agencies in Ontario that are illegally paying people below the minimum wage and denying other basic employment rights,” says a government press release. “In doing so, they gain an unfair competitive advantage over law-abiding agencies by undercutting rates.”
This announcement made by Minister McNaughton will significantly help target temp agencies in the trucking industry that promote the Driver Inc. model, said Stephen Laskowski, president of the Ontario Trucking Association. “The Driver Inc. scheme is used to sidestep requirements like WSIB premiums, labour standards, and tax laws – all of which exploit vulnerable workers and warp the competitive playing field for compliant companies.”
As widely reported by both the OTA and the Canadian Trucking Alliance (CTA), the Workplace Safety and Insurance Board (WSIB) has been conducting targeted enforcement activities in the trucking industry on the Driver Inc. scheme and has already seen numerous noncompliant trucking companies receiving adjustments totalling millions of dollars, with some individual companies receiving adjustments of upwards of $800,000.
Similarly, Employment and Social Development Canada (ESDC) is currently conducting an enforcement pilot in Ontario which focuses on Labour Code compliance among Driver Inc. companies in the trucking sector.
Under the Ontario’s proposed legislation, THAs and recruiters would now be vetted before being issued a licence to operate. Applicants would need to provide an irrevocable letter of credit, that could be used to repay owed wages to workers. Penalties could be issued against unlicensed agencies and recruiters as well as the companies who use them, with proactive inspection measures to ensure compliance with applicable requirements.
Federally, the Canadian Trucking Alliance has been proposing a similar vetting process for trucking companies looking to access immigration channels, including the Temporary Foreign Worker Program (TFWP). CTA has proposed that a Known or Certified Employer program be established in trucking to ensure new arrivals to Canada are only employed by compliant companies which have been evaluated for compliance with safety and employment standards.
The growing number of Driver Inc. fleets are fueled by the underground economy. Many abuse their labour by not paying payroll taxes, workers’ compensation or employees vacation/overtime payments amongst a host of other noncompliant activities.
Both OTA and CTA are encouraged by the announcement by the Government of Ontario and believe these new measures will aid the industry in combating this growing Driver Inc. scheme. Through a safety analysis, CTA has found that Driver Inc. companies who abuse labour, tax and environmental rules also routinely have poor safety records, showing a direct correlation between non-compliance and public risk.
“Not only are measures like this good for workers and workers’ rights, it’s also good for society in general,” said Laskowski. “Driver Inc. siphons tax dollars away from vital Canadian services and infrastructure and is redirected into the underground economy while circumventing important labour, safety and environmental rules. This practice must end and we think this recently announcement is another enforcement tool to help with that cause.”
OTA is asking the trucking industry to uncover and report carriers and drivers engaged in the illegal Driver Inc. scheme. To go along with an anonymous tip line (1-888-SI-LEADS (1-888-745-3237), WSIB is also offering a web portal, Report Fraud , and contact directly by email, [email protected].