Established recruiting agencies that serve Ontario’s trucking industry are welcoming provincial plans to license related businesses beginning Jan. 1.

The province says it’s introducing the regime to crack down on temporary help agencies and recruiters that pay less than minimum wage, deny other employment rights, or charge illegal fees. Licence holders will need to provide a $25,000 irrevocable letter of credit that can be used to repay owed wages, while repeat offenders will face fines up to $50,000.

Liam O’Briain, chief operating officer at Kee Human Resources, says he has seen a surge in businesses paying workers under the table and below minimum wage over the last five years – particularly in the Greater Toronto Area.

“It’s been pretty frustrating,” O’Briain says. “They pay them like a vendor versus an employee. They’re not taking any deductions. They’re not paying WSIB, CPP, EI. Vacation time is not accumulated.”

But success will depend on enforcement, he adds.

“It’s going to take quite a bit of resources if they want to get this done properly,” O’Briain says. “Where they’ll have success is going after different carriers that use these agencies that are not acting above-board.”

It will be illegal for companies to knowingly use unlicensed businesses for staffing, and those that hire such services will be required to repay workers for any illegally charged fees.

‘Needs to be a significant-enough disincentive’

Dave MacDonald, president of Better Together Group — which includes Revolution Staffing — believes penalties for companies that use such services could even be higher.

“If the government is going to review employment agencies and only penalize the agency owner behind it, they’re not going to impact the issue,” he says. “It needs to be a significant-enough disincentive so the [employers] don’t do it.”

Close to half the workers who contact the agency ask if they will be paid in cash, he adds. “Of course we say no.” But the businesses that work that way can undercut costs by 20%.

“I look forward to agencies getting a better reputation with more guidelines in place. Everyone needs to be a little more strict,” adds Hannah MacDonald, Better Together Group’s senior sales and marketing manager.

“There is always room for improvement – no matter what process you’re looking at.”

Ontario had 2,300 placement agencies and temporary help businesses as of December 2022, according to Statistics Canada.

Temporary help agencies and recruiters that apply for a licence before Jan. 1 will be allowed to continue operating until the ministry issues a decision on the application. If a licence or renewal is refused, applicants will have 30 days to cease operations.

Applications will carry $750 fees.

• This story has been updated to include comments from Dave MacDonald.