The WSIB has undertaken a review of the rate setting approach for temporary employment agencies (TEAs). The review is in response to concerns raised by a subset of businesses in the TEA industry (in particular those that supply clerical labour) that the approach the WSIB originally planned to introduce in 2020 would result in significant rate increases for some TEAs.
A key component of the review was a stakeholder consultation, divided into two phases.
Phase one (May 6 to June 30, 2022): The WSIB sought information about the TEA industry to support its analysis of the rate setting approach for TEAs and possible modifications to the approach.
The WSIB reviewed the stakeholder submissions and used the feedback received to inform the development of a proposed modification to the rate setting approach for TEAs.
Phase two (October 12 to November 16, 2022): The WSIB sought feedback on the proposed modification, and on how TEAs transition to this revised approach. We are reviewing the submissions received and this page will be updated with the phase two feedback and next steps.
We remain committed to working with you to ensure a fair rate-setting approach for all businesses and to make Ontario the safest place to work.
Phase one feedback
The WSIB released six questions about the TEA industry and the original rate setting approach for TEAs as part of phase one of the consultation. Stakeholders had the opportunity to respond to any or all of the questions.
- Six were from the TEA industry perspective, including two from TEA industry associations: the Association of Canadian Search, Employment and Staffing Services (ACSESS), and the National Association of Canadian Consulting Businesses (NACCB). Four were from individual TEAs.
- 15 were from the worker perspective. Specifically, five were from worker organizations and 10 were from individual workers.
Note: We are posting these submissions as received, if you require them in an alternate format please contact the firstname.lastname@example.org
TEA industry perspective
The key concern raised by the TEA industry related to the potential for significant rate increases applied to their clerical labour (including certain knowledge-based job roles, like IT professionals).
Under the pre-2020 classification system, that labour was generally classified under the Supply of Clerical Labour Operations classification unit, which was assigned a $0.13 rate in 2019.
The rate setting approach for TEAs that the WSIB originally planned to introduce in 2020 was designed to generally align TEAs’ rates with the rates of their clients’ classes. However, the implication of that approach for TEAs that supply clerical labour to higher risk classes is they could be subject to significant rate increases.
For example, some TEAs that supply clerical labour to clients in Class D2 (Public Administration) would need to move from a $0.13 rate to a $3.51 rate, approximately, (the class rate of Class D2) for the portion of their operations supplied to that class.
The TEA industry argued that such rate increases:
- are not aligned with the risk and claim costs of their clerical labour,
- cannot be absorbed by TEAs, since they are too significant, and
- put them at a competitive disadvantage with their non-TEA competitors that employ people in similar roles and are classified in Class L (Professional, Scientific and Technical), which has a $0.22 class rate in 2022.
Several submissions suggested a separate rate for TEAs’ clerical labour. There was some variation in how they described the rate and how they defined clerical labour, however, the main theme was that the rate should reflect the low-risk nature of the labour.
Notably, there was limited discussion of higher risk types of labour in the submissions.
All submissions were critical of the TEA industry in general, arguing it allows businesses to avoid costs by outsourcing dangerous work to TEAs. Notably, the submissions focused on the supply of higher risk labour and largely did not address the supply of low-risk clerical labour.
Several submissions indicated the consultation is unnecessary as the WSIB’s previous consultation, as part of the new rate-setting model, was comprehensive and achieved a fair result for TEAs. There was concern that the WSIB is planning to change the approach originally planned for TEAs, which was designed to reduce the premium cost incentives for clients to use TEA labour.
Several submissions indicated the WSIB should implement the original approach planned for TEAs to promote health and safety.
The WSIB continues to support the objective of generally aligning TEAs’ rates with the rates of their clients’ classes. However, significant rate increases for TEAs that supply clerical labour (including certain knowledge-based job roles) would be misaligned with the low-risk nature of those activities. As a result, it is reasonable to introduce an exception for clerical labour.
The following modification is proposed:
- Create a new classification code for the supply of clerical labour. The activities included in the code would be similar to the activities included in the pre-2020 Supply of Clerical Labour Operations classification unit (e.g., clerical labour and certain knowledge-based job roles).
- TEAs would report all their clerical labour under this new code, regardless of the classification of the client. However, for all the other types of labour they supply, TEAs would continue to report based on the classification of the client.
- The new classification code would be added to Class L, which has a risk profile that is comparable to this activity.
- The new classification code would be rated separately from the existing supply of labour to Class L classification code.
The new classification code would allow TEAs to be assigned a rate for their clerical labour comparable to the rate they were assigned pre-2020. As was previously mentioned, the 2019 rate for the supply of clerical labour was $0.13 and the 2022 class rate for Class L is $0.22.
The addition of the classification code to Class L is expected to have a marginal impact on the current rates in Class L and the other classes/subclasses.
An amendment to Ontario Regulation 175/98 would be required to allow the exception to be implemented and the WSIB would engage with the Ontario government on this issue.
If the Ontario government approves the necessary amendment to Ontario Regulation 175/98, there would be further communication with stakeholders about certain implementation issues.
- The year the modification would be implemented (no earlier than 2024).
- The details of the new classification code that would be added to the Employer Classification Manual.
- The treatment of TEAs’ experience from 2020 to 2023 and beyond for the supply of clerical labour.
- Any transitional risk band movement rules that may be applied to TEAs.
Our premiums and payment FAQs provide more information about 2022 and 2023 TEA rate setting, for your reference.