We last spoke on the issue of “assignment employees” almost a year ago, when we discussed amendments to the Employment Standards Act, 2000 (“ESA”), which would take effect at different times during 2015. A link to our last blog can be found in our blog entitled "New Obligations for Employers in Ontario - What Employers Need to Know".

As discussed in our previous blog, beginning on November 20, 2015, companies (“clients”) that use workers (“assignment employees”) employed by temporary help agencies will have new legal liabilities and responsibilities. These liabilities and responsibilities have been put in place to ensure that assignment employees receive their minimum entitlements under the ESA.

Under the ESA, temporary help agencies are considered the employer of the assignment employee and are responsible for his or her statutory entitlements, such as termination and severance pay. Until recently, clients who contracted the services of a temporary help agency had very little liability under the legislation. However, client liability has effectively changed with the new provisions of the ESA coming into force.

The Stronger Workplaces for a Stronger Economy Act, 2014 introduces two significant changes, which effectively widen the scope of client liabilities and responsibilities under the ESA.

Joint Liability for Wages

A client of a temporary help agency may now be jointly and severally liable for the following wages of an assignment employee earned during the relevant pay period:

1.  Regular wages;
2.  Overtime pay;
3.  Public holiday pay; and
4.  Premium pay.

A client is now jointly responsible, along with the agency, if the agency fails to pay the assignment employee some or all of the employee’s wages during a pay period. In addition, if an employee was assigned to perform work for more than one client during a pay period, each client is now jointly and severally liable with the agency for a share of the total wages owed to the assignment employee.

Although temporary help agencies are still primarily responsible for the wages of an assignment employee, proceedings against the agency do not have to be exhausted before proceedings can be commenced against the client.  For the purposes of enforcing liability under this section, the ESA deems the client to be the employer of the assignment employee.

Recordkeeping

The client of a temporary help agency is required to record the number of hours each assignment employee performed for the client. Such information is required to be retained by the client, or a person arranged to retain it by the client, for three (3) years after the day or week to which the information relates. The client must ensure that the records required to be retained are readily available for inspection as required by an employment standards officer.

As a result of the amendments, using the services of a temporary help agency may expose clients to a higher degree of liability. Accordingly, using the services of a temporary help agency should not be a decision taken lightly. Clients need to weigh the costs and benefits of such a decision and determine the appropriate strategy for the company as a whole.