Temporary Employment Agency rate setting consultation

The WSIB introduced a new rate setting model for all businesses (the rate framework) in 2020.

Temporary Employment Agencies (TEAs) are subject to certain distinct classification and rate setting rules under the new model.

Businesses in the TEA industry have raised concerns about the rate setting approach for TEAs that the WSIB originally planned to introduce in 2020. In particular, they have indicated the approach would result in significant rate increases for some TEAs. In response to those concerns, the WSIB deferred the implementation of the approach and is now reviewing it for potential modification.

The WSIB recently announced that the rates for TEAs in 2023 will be set using the same approach as all other businesses, as they were in 2022. As a result, any modified approach for TEAs will be introduced in 2024 at the earliest.

As part of the review, the WSIB is seeking information and feedback from stakeholders in two phases.

Phase one (Q2 2022): The WSIB will seek information about the TEA industry to support its analysis of the rate setting approach for TEAs and possible modifications to the approach.

Phase two (anticipated to be initiated in Q4 2022): The WSIB will seek feedback on possible modifications to the rate setting approach for TEAs that it is considering.

Background

Prior to 2020, TEAs were classified based on the activities their workers performed for their clients, not the classification of their clients. They were often classified differently than their clients and paid different rates. For example, there were supply of labour classifications for clerical, non-clerical, construction, restaurant/catering, trucking, and other activities.

TEAs’ rates were significantly less than the rates of their clients in some cases, creating an incentive for some clients to use TEA workers to reduce their premium costs.

The rate setting approach for TEAs introduced in 2020 was originally designed to address this issue by classifying TEAs based on the industry classes of their clients and assigning them a separate rate for each class. This would generally align TEAs’ rates with the rates of their clients’ classes.

To transition businesses smoothly to the new model, a starting rate was established for each business based on their pre-2020 experience. Businesses started roughly at the same net rate position they were in prior to the new model. However, it was identified that this approach for TEAs would result in some being assigned starting rates significantly below the rates of their clients’ classes. Since the new model only allows gradual rate increases each year, it would take many years until the rates of some TEAs increased enough to generally align with the rates of their clients’ classes.

To address this issue and achieve the rate alignment objective discussed above, the WSIB planned to assign all TEAs the class rate of each class to which they supply labour as their starting rate in the new model. TEAs would then move towards their projected rate based on their individual experience. However, that approach was deferred in 2020 and 2021 and then paused in 2022, as discussed above and outlined in the Temporary Employment Agencies Transition to the Rate Framework policy.

Questions for stakeholders

Below are several questions about the TEA industry to support the WSIB’s analysis and possible modifications of the rate setting approach for TEAs.

If you are a business in the TEA industry, you may choose to respond to any of the questions from the perspective of your business and/or the TEA industry more generally.

  1. What do you think the WSIB should be aware of about how the TEA industry generally operates (e.g. the typical types of supplied labour, business models, employment relationships with supplied labour, health and safety practices)?
  2. In cases where a TEA supplies multiple types of labour to a client, do they generally obtain one contract for all the labour supplied to the client, or do they obtain multiple contracts (one for each type of labour being supplied)?
  3. Are multi-year contracts between TEAs and clients common? If yes, how long do they typically last?
  4. In cases where TEAs have multi-year contracts with clients, how do they currently account for increases or decreases in WSIB premium costs and/or other business costs that occur during the term of the contract? For example, if a TEA’s costs increase one year, does the rate charged to the client also increase, or is it fixed for the entire term of the contract?
  5. Do you have any feedback about the approach of classifying TEAs in the same classes as their clients and generally aligning their rates with the rates of their clients’ classes? For example, are there circumstances, or types of supplied labour, where you believe that approach is not appropriate?
  6. Is there any other information the WSIB should be aware of when assessing the rate setting approach for TEAs?

How to respond

We invite interested stakeholders to respond to any of the questions to help support our review. All stakeholder feedback is valuable to us and will be carefully considered.

Please submit your response to the WSIB’s Consultation Secretariat. Written submissions will be accepted until June 30, 2022. We look forward to hearing from you.

Please note that all stakeholder submissions will be posted on this page following the consultation.

Please email the Consultation Secretariat if you would like to be added to the TEA consultation mailing list to receive updates about this consultation.

Our premiums and payment FAQs provide more information about 2022 and 2023 TEA rate setting.

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.