Alberta Crackdown on Employment Agencies: Could Atlantic Canada Be Next?

Welcome to Bienvenue à Nova Scotia
Welcome to Bienvenue à Nova Scotia (Photo credit: Wikipedia)

September 21, 2012
Written by Lana MacLellan

Alberta is cracking down on unscrupulous provincial employment agencies with some of the strictest rules to date in Canada.

New regulations under Alberta’s Immigration Act came into effect on September 1st and are primarily designed to protect temporary foreign workers.  However, they also protect any worker who uses and employment agency in Alberta. They build on existing rules that require employment agencies to be licensed, and prohibit them from charging employees a fee to find a job.

Most significantly, the new regulations require employment agencies to:

Keep better records;
Operate under a licensed name;
Register agents; and
Have written contracts with job seekers.
In addition, agencies recruiting internationally will be required to provide the government with a $25,000 security.

The new regulations also make it illegal to mislead temporary foreign workers about their chances of becoming permanent residents or Canadian citizens. Agencies cannot mislead workers about their rights, intimidate or threaten them, ask for a performance bond, or pressure them to lie to Canadian officials.

Under the Fair Trading Act, companies that break the rules can expect to be fined up to $100,000, repay up to three times the profits earned in an offense, and/or forfeit the $25,000 security.

So why should employers in Atlantic Canada pay attention to what is happening in Alberta? Because it may very well be an indication of new rules and regulations that could be headed our way.

More and more Canadian provinces are implementing new rules for employment agencies and employers recruiting overseas that aim to protect temporary foreign workers. Manitoba was the first province to enact this type of legislation in April 2009 with the introduction of the Worker Recruitment and Protection Act (WRPA). Under WRPA, all Manitoba employers wanting to recruit temporary foreign workers are first required to register with the province and anyone engaged in foreign worker recruitment, including agencies, is required to obtain a license from the province. Recruiters must provide an irrevocable letter of credit in the amount of $10,000 and employers and recruiters are prohibited from charging fees from foreign workers to find them work. Fines for breaching obligations under WRPA are as high as $25,000 to $50,000.

Variations on the Manitoba model have been implemented by British Columbia and Alberta, and will soon be implemented in Nova Scotia though Bill 53, which makes a series of amendments to the Labour Standards Code. The details of the Nova Scotia regime have yet to finalized, however, they will likely be based on the Manitoba model.

We anticipate draft regulations will go to Cabinet sometime this fall, and be proclaimed shortly after. It appears the new regulations will require every employer who recruits foreign workers to register with the province. The registration process is designed to be as facilitative as possible for employers, and will likely be done online without a fee. In addition, recruiters will be required to have a license to recruit Nova Scotian employers, whether the recruiter is based in Nova Scotia, elsewhere in Canada, or overseas. A nominal fee will be charged for the license and a security will be required. Again, the details of this process will not be known until the regulations are before Cabinet later this fall.  However it seems the license fee will be approximately $100 and the security will be roughly $5000. After the registration and licensing regimes are introduced, there will be a transition period before each becomes a requirement for employers and recruiters.

These new regulations in Nova Scotia will create additional immigration hurdles for prospective and current employers of foreign workers. Employers that recruit and hire foreign workers must ensure they are registered and that they only work with licensed recruiters. Employers must comply with provincial laws to remain eligible to hire foreign workers and avoid fines.

Although Nova Scotia is currently the only Atlantic province with this type of legislation in the works, employers in other provinces may want to turn their attention to the new changes. Given the rate at which provinces across Canada are implementing similar rules, it may be just a matter of time before New Brunswick, Prince Edward Island, and Newfoundland and Labrador develop their own provincial regimes.


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