Many temp agencies flying under WSIB radar; Audit shows companies often misreport payroll, don’t pay mandatory insurance premiums

Sara Mojtehedzadeh
The Toronto Star , Apr. 9, 2018

Temporary help agencies “create significant challenges” for the provincial compensation board and are more likely than other Ontario employers to break the law, according to an internal audit obtained by the Star.

The findings were the result of a “compliance intervention” strategy conducted by the Workplace Safety and Insurance Board from 2013 to 2016, and were released to the Star under freedom of information laws. The audit found that temp agencies were significantly more likely to misreport their payroll to the board, and more likely not to pay mandatory insurance premiums.

Employers are required by law to report their payroll, which is then used by the compensation board to calculate how much employers owe in premium payments. These premiums are used to fund benefits paid to injured workers across the province.

While overall employer compliance with WSIB audits in Ontario was 77 per cent, the audit found that only 38 per cent of temp agency employers followed suit.

The board also found that some 871 temp agencies closed between 2013 and 2016 – and that 51 per cent of them were audited before shutting down. But some appeared to subsequently reinvent themselves: the audit found that 25 per cent of new temp agencies
opening during the same period shared “similar tombstone information” with previously existing agencies.

Ellen MacEachen, a professor at the University of Waterloo who has conducted extensive research on the temp agency sector, said closing down and reopening under a different name allows temp agencies to avoid potential fines or penalties from the compensation board.

“Basically, temp agencies can be very invisible businesses. They can use a cellphone and run it out of their kitchens. They kind of fly under the radar,” she said.

“It all fits with things that we’ve been seeing for a long time.”

Last summer, as part of a yearlong investigation into the rise of temp work in Ontario, the Star sent a reporter to work undercover as a temp at a North York factory.

Our reporter, who was hired by a temp agency called Magnus Services, was paid in cash at a payday lender. The agency did not provide pay stubs and did not make any statutory deductions. The listed addresses for the business turned out to be a virtual office
and an empty unit in a strip mall.

In September 2016, 23-year-old refugee Amina Diaby died at the same facility, Fiera Foods, after being hired through a temp agency called OLA Staffing. She worked at the factory for just two weeks when her headscarf got caught in an unguarded machine, strangling her.

A WSIB briefing note obtained by the Star said OLA had a number of “associated accounts” with the board that “have been investigated for reporting inaccurate payroll and providing false or misleading information related to workers’ claim for benefits,” resulting in three convictions under the Workplace Safety and Insurance Act.

One of OLA Staffing’s “associated” firms, Opportunity Labour Agency Service, was previously convicted under health and safety laws after a Brampton temp worker was crushed to death by a stack of plywood in 2006. According to the briefing note, the worker had an expired visa and the agency claimed he was “unbeknownst” to them.

OLA Staffing was incorporated in 2007. Julian Porter, the lawyer representing OLA Staffing director Sangeetha Thushyanthan, said his client had directed the business “responsibly for over 10 years” and that OLA Staffing was the “only temporary employment agency owned and operated” by Thushyanthan.

Porter said no charges were laid against OLA Staffing following Diaby’s death and that the agency has never been charged with a contravention of health and safety or workers’ compensation legislation.

“The charges under the Workplace Safety & Insurance Act, 1997 that you refer to relate to conduct in 2005 and 2006 by corporations owned and controlled by a relative of (Thushyanthan), who is no longer active in the industry of providing temporary employee services. Likewise the unfortunate fatality you refer to occurred on Aug. 31, 2006, prior to the incorporation of OLA Staffing Inc.,” Porter said in a written response to the Star.

Corporate registry records do not list Thushyanthan as the director of the “associated” temp agencies, which dissolved in 2007 and 2008. But the businesses registered office addresses or personal addresses to properties owned by Thushyanthan.

The Star’s 2017 investigation obtained the names and addresses of Ontario’s 2,588 temp agency accounts registered at the WSIB. More than a hundred appeared to be residential addresses, including suburban homes or condo buildings. Around a dozen were simply a P.O. box or were registered to a UPS mailbox service. At least one listed address was an empty plot of land.

“Temp agencies are unique in that they have no infrastructure, no machinery or equipment. Other businesses can’t (shut down and reopen) quite as easily,” MacEachen said.

The Star met with one temp agency owner who said he was forced to move his business out of the GTA because he could no longer compete with temp agencies who offered clients cheap labour rates by avoiding legal obligations.

“It’s the lack of enforcement that’s given us a bad name,” the owner said.

The pattern can also strand workers seeking unpaid wages.

Scarborough resident Mohammed Siraj got a job through a temp agency painting signs after he came to Canada as a refugee from Sudan. Over the course of a month, he says he worked around 100 hours. He says he received one cheque for around three days work, but it bounced.

After failing to pay him, he says the temp agency moved locations and didn’t answer their phone. It took him two months to find their new office.

“She said, ‘I’ll give you next week. Next week. Next week,’ ” he said of the temp agency owner.

Siraj filed a successful claim to the Ministry of Labour in January 2016, which issued his agency a so-called order to pay. But Siraj has never received the $1,287 he was owed.

“This is a human rights country. A freedom country. But the first time I got a job, I didn’t get my money,” said Siraj, who has three children under 10 living with him in Canada.

Ondine Almeida, who came to Canada in 2005 from Goa, India, said her experience is similar. Last May, the Ministry of Labour found she was owed almost $6,000 from her former temp agency, but it too shut down. She has yet to recover her wages.

Almeida said her teeth are falling out and she needs dentures, but can’t afford to go to the dentist.

“My mom is all worried, my brother and sisters are all worried. Each has their own family so I can’t keep worrying my family all the time. I just need my money.”

“Many of these small temp agencies are run in their own community and use new immigrants and many times workers don’t come forward and complain when they are new,” said Regini David of West Scarborough Community Legal Services, which helped both workers file their Ministry of Labour complaints.

“People also lose hope and trust. Ondine and Mohammed are a good example. They won. They have an order. But collection is an issue.”

The Ministry of Labour has committed to doubling its complement of employment standards inspectors to improve enforcement efforts. The ministry is also undertaking an in-depth investigation into the temp agency sector with results expected to be available in the spring.

On Friday, the provincial government officially enacted legislation requiring the compensation board to hold both temp agencies and their client companies accountable when a temp agency worker is hurt on the job.

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