Maybe the more appropriate question would be, why do people continue to make recruitment companies rich by paying ridiculously high fees? If we were to ask this question at least five years ago, we could easily mention names of people who actually paid fortunes to recruiters just to get them a job in Canada.
Today, things are supposed to change, with the Canadian Government making it a crime for any person or recruitment agency to demands payment for their services. The new rule was instituted on March 22, 2010 via the Employment Protection for Foreign Nationals Act, which covers live-in caregivers and other foreign workers in Canada.
According to this law, recruiters cannot charge recruits any fees, whether directly or indirectly, for any service rendered, including employer-hunting, resume preparation assistance or any other service related to job placements and immigration. Recruiters may, however, charge employers for their services, but these employers cannot recover such fees from the workers.
Recruiters are also not allowed to opt out of coverage under this Act, and workers must not be threatened nor punished for claiming their rights as provided for by this particular law.
If and when a recruiter charges fees against a foreign worker, the agency will be ordered to return them and can be prosecuted with a fine of no more than $50,000 and a sentence of 12 months imprisonment. For corporations, there will be more serious legal consequences
So, why are people still paying recruitment fees?
With this new law in place, it is easy to presume that issues regarding exorbitant fees charged by recruiters would easily vanish. Truth is, they continue to thrive. It is also natural to think that the new law would leave unscrupulous recruiters no other choice but to close shop and get into another type of business, but of course, this is not the case.
In fact, it looks like nothing has changed. Recruitment fees are even growing and growing, making recruiters richer and richer by the day. It’s actually funny how they continue to fatten their bank accounts through the same old ways that are now supposed to be illegal.
These agencies are treading dangerous grounds. If caught, they will be forced to return the money to the foreign worker, pay a maximum of $50,000 in fines and spend a year behind bars.
If you have paid any amount to a recruiter and question them about it, be prepared to hear all types of excuses. They may tell you that your payment covered administrative costs or translation services. Don’t buy it. Obviously, $7,000 for paperwork is absurd. They may also tell you that your payment covered their services for getting a Labor Market Opinion. Absurd just the same. According to the law, no recruiter is allowed to charge ANY FEE for ANY reason.
Even if they had to pay for an LMO, the fee wouldn’t be as high as thousands of dollars. The element of deception is evident in the way recruiters deliberately omit their names on Service Canada applications they process as third party representatives. According to Service Canada, only qualified representatives may collect a fee from job applicants. If fees were paid, then these recruiters’ names must be disclosed. Otherwise, it is obvious that something fishy is going on.
Again, we go back to the question: why do people still pay recruiters fees to find them an employer? Based on research, there are two possible reasons for this.
1. Ignorance of the law
Sometimes, it all boils down to workers not knowing the law that protects them against recruiters. Most of these workers are outside of Canada and have little connections from within, so finding a recruitment agency that can help them is often viewed as a precious opportunity. They are simply unaware that there is a law that prohibits recruiters from charging fees.
2. Desperation to enter Canada
In other cases, workers are aware of the law that protects them against recruitment fees, but they willing to ignore it. They know that it is a crime for agencies to charge fees, and that they are actually paying for a “ghost employer”, but they don’t mind playing along because all they want is to get to Canada on a work permit.
When they arrive in Canada and are released by the ghost employer, they go out on their own to find a real employer who takes over their work permit. It is indeed easier to get a job in Canada when an applicant can be immediately available for an interview and the rest of the application process.
Ghost employers are actually part of the scheme where they agree to participate in accomplishing the needed documents. In reality, they do not really intend to employ the applicants and will be releasing them upon arrival. The workers will then be given the status, “RUA” or released upon arrival.
For most people, there seems to be nothing wrong with this system. After all, Canada is in need of workers, so it all seems innocent for an agency to assist the government in filling labor gaps by facilitating ghost employment. However, in reality, things are not always that simple.
Let’s take a look at some of the common scenarios where people who come to the country through ghost employers eventually fail to achieve their main objectives (finding real employment and becoming permanent residents):
● A worker pays an agency thousands of dollars to get him a job. He gets an offer, but doesn’t know that it’s from a ghost employer. When he enters Canada, he is released upon arrival and has no place to stay nor an income to live on. He ends up in an apartment shared with other workers who are in the same situation. He is charged rent and promised employment in exchange for more money. If he doesn’t pay, the agency threatens to report him to immigration and have him deported.
● A worker pays a recruiter thousands of dollars in exchange for a job from a ghost employer. He knows it is a fake employer, but doesn’t mind. The agency demands more money from him, he refuses to pay and the agency threatens to tell the fake employer to “cancel” employment and report him to immigration. When he arrives in Canada, he is refused entry and has no choice but to return home.
● Worker pays recruiter to get him a ghost employer and arrives in Canada, knowing he doesn’t really have a job. He gets a work permit, but the agency wants him to pay more money so he could have a real employer, in exchange for a ridiculously high fee. He refuses to pay, and the recruiter threatens to report him to immigration for being on “fake employer entry.” The worker ends up staying in Canada but having to hide from authorities and uncertain about his future.
There is one sad thing in common if you look into all three scenarios – the worker is the victim and the recruiter is always on the manipulating end of the equation. The recruiter dictates and the worker vulnerably follows, thinking he has no choice, if he wants to stay in Canada.
Why? Because thousands of dollars has already been paid right from the start of the whole scheme. For this very reason, the Canadian government has taken concrete steps to stop the practice through the Employment Protection for Foreign Nationals Act. It is just lamentable that many people are still oblivious to this reality.