Who Pays WSIB, Vacation and Holiday Pay for Temp Workers in Ontario?

When you use a temp agency in Ontario, the agency is the employer of record for the workers it sends you. It pays their wages, vacation pay, public holiday pay, payroll taxes and WSIB premiums, and recovers those costs through the hourly bill rate you pay. You are still responsible for the work site, for training workers on your equipment and for health and safety on your premises.

This guide explains who pays what, how public holiday and vacation pay are worked out, what to ask an agency about WSIB and where your own duties begin. It is general information, not legal advice.

Who is the employer on a temp assignment?

The Employment Standards Act treats a temporary help agency as the employer of its assignment employees. The agency hires them, pays them and handles payroll. You direct their daily work, but you do not put them on your payroll unless you later hire them.

What the agency pays, and what the bill rate covers

• Wages for every hour worked, including overtime when it applies
• Vacation pay and public holiday pay
• Employer-side CPP and EI
• Employer Health Tax, where it applies
• WSIB premiums
• Payroll administration, recruiting and the agency’s margin

You pay one invoice at an agreed hourly rate for the hours worked. For a worked example, read how much staffing agencies charge employers in Canada.

Who pays WSIB?

The agency registers with the WSIB and pays premiums on the wages of the workers it employs. If an assignment employee is injured on your site, they claim through the agency’s WSIB account. That does not remove your duties. You still have to keep the workplace safe, train workers on your equipment and report serious incidents as the law requires.

Before you start, ask the agency for proof that its WSIB account is in good standing. A WSIB clearance certificate is the usual way to show it. WSIB’s rules about who counts as the employer can be detailed, so check wsib.ca or ask your own advisor if your situation is unusual.

How vacation pay works

Under the Act, vacation pay is at least 4% of an employee’s wages in their first five years with an employer, and 6% after that. The agency pays this, usually on each pay cheque or as a lump sum, depending on what was agreed. It is part of the cost built into your rate.

How public holiday pay works

Ontario has nine public holidays. An assignment employee who qualifies is paid public holiday pay by the agency. The usual formula is regular wages plus vacation pay payable in the four weeks before the holiday, divided by 20.

As an illustration only, if a worker earned $3,200 in regular wages and vacation pay in those four weeks, public holiday pay would be $3,200 ÷ 20, or $160. If the worker works on the holiday, a premium rate applies, and the Act has a separate rule on how it is paid. Ask your agency how it handles each case so the invoice has no surprises.

What you still own as the client

• Site safety. You control the workplace, so you must provide a safe site, hazard information and equipment training.
• Training on your equipment. A forklift certificate is not the same as training on your trucks and racking.
• Direction of the work. You supervise daily tasks. Pay, discipline and employment decisions go through the agency.
• Accurate hours. Approve timesheets promptly so workers are paid correctly.

Questions to ask an agency before you sign

1. Is your WSIB account in good standing, and can I see the clearance certificate?
2. Do you pay vacation and public holiday pay, and is it included in the bill rate?
3. How are overtime and holidays billed?
4. What happens if a worker does not suit us? Is there a replacement policy?
5. If we want to hire a worker, what are the terms?

For Supreme Employment, we are the employer of record for temporary workers, so wages, vacation pay and WSIB are on our side and you receive one invoice. If a placement does not work out within 30 days, we replace the worker at no cost.

Common questions

Do I pay vacation pay to a temp worker?

The agency pays it, and it is built into the bill rate. You do not pay the worker directly.

Am I liable if a temp worker is injured on my site?

The worker claims through the agency’s WSIB account, but you still carry safety duties on your premises. Make sure the worker is trained, and report incidents as required.

What if I want to hire the worker?

You can. See temp-to-hire and permanent staffing for how conversion works, and agree the terms with the agency at the start.

Is a temp agency cheaper than hiring directly?

It depends. You pay a higher hourly rate, but you avoid recruiting, payroll and onboarding costs, and you can scale up and down. Read what is a temp agency for a fuller comparison.

Need workers? See warehouse staffing, manufacturing staffing or general labour staffing.

This guide is general information, not legal advice. Check ontario.ca and wsib.ca for current rules.