The “Working for Workers Act, 2021” brought in by the Ontario government, is a new employment standards act with significant implications for anyone employing workers in the province. 

To show how the new Ontario staffing regulations will affect you, we’ll provide an overview of the key components of this new act, explore proposed changes (including licensing requirements for staffing firms and recruiters), explain the act’s ban on noncompete agreements, and discuss the act’s ‘disconnect’ policies that address after-hours communications.

It is essential to stay informed about the evolving regulations and be proactive in updating employee and employment contracts and agreements to reflect the new requirements. Understanding these changes will allow you to adapt to the new requirements smoothly, ensuring your company is in compliance while reaping the potential benefits of a more equitable and competitive job market.

1. Licensing Requirements for Staffing Firms

The introduction of licensing requirements by the Ontario Government will help protect both workers and businesses by ensuring that every employee, employer, and staffing firm is held accountable for their actions and obligations.

Under the “Working for Workers Act, 2021,” staffing firms and recruiters in Ontario will be required to obtain a license to operate. This new licensing requirement ensures these firms comply with workplace safety standards and treat temporary workers fairly and equitably. 

This directly impacts companies that use staffing agencies to fill their work rosters. Client companies that use unlicensed staffing firms may face consequences, such as fines or penalties. 

The government plans to begin enforcing this requirement by 2024 at the earliest. Until then, businesses should start preparing for the change by reviewing their current staffing arrangements and ensuring they are working with licensed firms. 

Impact on Companies Who Use Staffing Agencies

As a result of the act’s new licensing requirements, companies should ensure staffing firms represent their valid license in contracts with client companies. Additionally, client companies may request indemnification agreements from staffing firms to protect themselves from potential fines or penalties for using unlicensed firms. This added layer of protection ensures that both parties are aware of their obligations and risks under the new law and regulations.

To ensure compliance with the new regulations, businesses should perform due diligence when working with staffing firms. This may include checking the government’s website for a list of licensed staffing firms or requesting proof of an employer’s establishment or licensure from potential partners. By taking these precautions, businesses can minimize their risk of penalties and ensure they are working with reputable staffing partners.

2. Ban on Non-Compete Agreements

The Ontario government is taking a significant step towards fostering a more open and competitive job market by banning non-compete agreements. 

Effective October 25, 2021, the “Working for Workers Act, 2021” banned non-compete agreements entered into employment contracts in Ontario. This move aligns the province with jurisdictions such as California and some European countries like France, where non-compete agreements in employment insurance are also prohibited. 

This ban on any non-compete agreement has several upsides for employers, particularly for attracting tech companies to Ontario. Without non-compete clauses, employees can freely move between companies in the same industry, fostering innovation and collaboration. Removing non-competes can help create a more competitive job market, attracting top talent to the region. 

Employers in Ontario should review their current employment contracts and update them accordingly to comply with this new regulation.

3. Disconnect Policies for After-Hours Communications

Ontario legislators are responding with the ever-increasing intrusion of digital communication, such as mobile phones and email, into our personal lives and off-hours. By implementing disconnect policies, businesses can promote a healthy work-life balance for their employees to reduce the risk of burnout by disconnecting from work.

The new legislation will require employers with 25 or more employees to develop a written policy to implement controls on after-hours communications with employees. Disconnect policies should outline expectations for companies and guidelines for employees regarding work-related communications outside of regular working hours. 

While specific guidelines for disconnect policies have not yet been released, businesses should begin preparing by reviewing their current policies and practices. The deadline for companies to have their disconnect policies in place was June 2, 2022. As more information becomes available, employers should be prepared to adjust their policies to meet the requirements set forth by the government.

Challenges and Opportunities for Businesses

Adapting to the new regulations may present some challenges for businesses and recruiters. These challenges could include revising existing policies, investing in additional resources for compliance, and understanding the complexities of the new rules. However, there are also several potential benefits associated with these changes.

The “Working for Workers Act, 2021” creates improved working conditions for employees, increased employer accountability, and more transparent hiring processes for all. By embracing the new regulations, businesses, and recruiters will play a key role in creating Ontario’s more equitable and competitive job market. 

This more equitable and competitive job market will, in turn, attract top talent and foster business innovation and skills development within the region. 

Stay Informed Going Forward

The “Working for Workers Act, 2021” introduces several significant changes to Ontario law, impacting businesses, staffing firms, remote employees, and recruiters. By understanding these proposed changes and adapting to the new requirements, stakeholders can ensure compliance while reaping the potential benefits of a more equitable and competitive job market. 

It is essential for businesses and recruiters to stay informed as more information becomes available and to take proactive steps to prepare for the upcoming changes to employment laws. With careful planning and a commitment to understanding the new regulations, businesses can successfully navigate the “Working for Workers Act, 2021” and thrive in the evolving Ontario job market.

Please note: This article is not intended to provide legal advice or interpretation of the law. Please consult qualified legal guidance to ensure compliance with your local employment standards legislation.