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How a Low Temp Agency Billing Rate Can Mean High Risk

At the risk of sounding cliché, you get what you pay for. This definitely applies to your temp agency billing rate. On the surface you might assume that a low temp agency billing rate means you are saving money. The reality is the exact opposite. A low billing rate can expose your company to a number of unwanted risks.

It is important to have confidence that your temporary staffing agency is observing all requirements that are outlined by the Workplace Safety and Insurance Board (WSIB), Ministry of Labour (MOL) and Canada Revenue Agency (CRA). Too low of a temp agency billing rate could indicate the following risks:

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  • Temporary staffing agency is taking short cuts in connection with WSIB regulations
  • Temporary staffing agency is ‘under reporting” temp earnings to the CRA
  • Temporary staffing agency is paying their temps less than minimum wage
  • Temporary staffing agency is using workers that are illegal to work in Canada

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Temporary Staffing Agency is Taking Short Cuts in Connection With WSIB Regulations

The low temp agency billing rate could very well be an indicator that the temporary staffing agency is ignoring important safety requirements. It could also be a warning sign that the agency is not properly paying the proper amount of WSIB premiums for the temporary workers they employ and assign to your workplace.

These shortcuts would increase your risk in the event of workplace related accident of the temporary worker at your worksite. It could also result in costly fines in the event of a WSIB audit. Any short term savings as a result of a low temp agency billing rate would quickly disappear.

Temporary Staffing Agency is Under-Reporting Temp Earnings to the CRA

If your company’s temporary staffing agency is under-reporting the earnings of their temps, that could expose you to obvious risks. You don’t want to get levied with costly fines during a CRA audit because of short cuts taken by the agency. At the risk of sounding like a broken record, the short term savings of a low temp agency billing rate can result in considerable costs and penalties.

Temporary Staffing Agency is Paying Their Temps Less than Minimum Wage

If you are audited by the MOL you do not want to take a hit because your temp agency is paying their temps less than minimum wage. It could also lead to negative PR if it ever gets reported to the media.

Along with the legal ramifications, there are also other serious risks in connection with a low temp agency billing rate. If the agency is paying less than minimum wage, or are paying a wage which is considered low by industry standards, you are taking the risk of being stuck with low quality workers. If these low quality workers lack the necessary skills, this could have a negative impact on your company’s bottom line.

Temporary Staffing Agency is Using Workers That Are Illegal to Work in Canada

The employing of illegal workers is another area where you could face costly fines if you are audited by the MOL or worse, Immigration Canada. It is also good to consider the risk to your company’s reputation if news of your company using illegal temps gets reported to the media. Also if using illegal temps becomes public knowledge to your permanent staff this could lead to lower employee morale.

It is imperative to consider these risks before choosing a temporary staffing agency which offers a low temp billing rate. You get what you pay for, and with too low of a temp agency billing rate you are paying for high risks and low rewards.

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