Look out for this new requirement if you use temporary work agencies or recruiters
One of the most common challenges we’ve been seeing is the labour shortage. This means that more and more companies are turning to temporary work agencies to fill their ranks. Unfortunately, some less than reputable companies have taking advantage of foreign workers by “paying them below minimum wage and denying employment rights”.
In order to address these issues, the Government of Ontario has passed an amendment to the the Employment Standards Act, 2000 that might apply to you.
Here’s what you need to know.
What is the change?
As of July 1st, 2024, all temporary help agencies and recruiters are required to hold a licence to operate.
What should you do about it?
– If you use temporary help agencies or recruiters, reach out to them now to make sure they are working towards getting their licence.
– Follow up! Give yourself a reminder to follow up when the deadline approaches.
– Click on this link to check the current status of applications and licences
What happens if I use an unlicensed agency or recruiter?
As of July 1st, 2024, if you are knowingly using the services of an unlicensed agency or recruiter, you can face penalties of:
– $15,000 for a first contravention
– $25,000 for a second contravention in a three-year period
– $50,000 for a third contravention in a three-year period
Click here for more information on the upcoming changes.
How does this impact my management system (such as ISO 9001)?
The majority of management system standards have purchasing requirements defined. Work Agencies (a.k.a. Temp Agencies) are a supplier from which you purchase services. Now that there is this new regulated requirement in Ontario that needs to be included in the evaluation and selection of suppliers.
Additionally, in most generic terms and conditions of contracts, there are terms included where the supplier is required to meet all applicable regulatory requirements. Since this is a new legislated requirement, for purposes of due diligence, verifying that your suppliers are in compliance with these new requirements is prudent.
ISO 9001:2015 – 8.4 Control of externally provided processes, products and services
8.4.1 General
The Organization shall ensure that externally provided processes, products and services conform to requirements.
…
The organization shall determine and apply criteria for the evaluation, selection, monitoring of performance, and re-evaluation of external providers, based on their ability to provide processes or products and services in accordance with requirements. The organization shall retain documented information of these activities and any necessary actions arising from the evaluations.
Another example of an impacted standard is the ISO 45001:2018 management system standard for Occupational Health & Safety. Work Agencies provide workers for the organization to utilize. As per the standard, all workers, no matter a contractor, part time, student or temporary worker, are covered under this standard and their safety risks must be identified, evaluated and controlled. The intent of this new legislation is to protect these workers by ensuring that they are treated fairly under the Employment Standards Act, among other issues.
ISO 45001:2018 – 8.1.4 Procurement
8.1.4.1 General
The organization shall establish, implement and maintain a process(es) to control the procurement of products and services in order to ensure their conformity to its OH&S management system.
8.1.4.2 Contractors
The organization shall ensure that the requirements of its OH&S management system are met by contractors and their workers. The organization’s procurement process(es) shall define and apply occupational health and safety criteria for the selection of contractors.
Finally, this impacts most management systems, as this is a new issue and a great potential risk for being fined if using an unlicensed agency.
How do I change/update/continually improve my management system?
You should review your purchasing process to ensure that you are verifying the temp agency’s compliance with the new requirement. You can do so by:
– Reviewing your purchasing procedures and work instructions,
– Reviewing your supplier evaluation and re-evaluation process, and
– Ensuring that your current suppliers are licenced by July 1st, 2024.
– Identify this risk and issue to your business until all of the above are completed.
– Use your internal change management processes to manage this new requirement.