American firm hired by Ford government to privatize welfare services was fined for stealing employee pay
The Ford government’s plan to privatize welfare services in Ontario is receiving heightened backlash after it came to light that one of the firms involved has an alarming past. Fedcap, a Manhattan-based human resources firm is leading the consortium charged with administering welfare services in the Hamilton-Niagara region.
In 2018, Fedcap was investigated by the U.S. Department of Labor. The investigation found that Fedcap had been failing to pay and illegally deducting fees from 443 workers. Fedcap was forced to hand back nearly $3 million of withheld or deducted pay to its employees.
This same firm is now responsible for finding employment for welfare recipients in Ontario. Opposition MPP Lisa Gretzky slammed the choice as “another ill-conceived costly mistake” by the Ford government. “They swindled their own employees and this Conservative government has put them in charge of finding jobs for vulnerable people in our province.”
The Ford gov’s plan to privatize ODSP & OW employment services is yet another irresponsible and costly mistake.— Lisa Gretzky (@LGretzky) February 25, 2020
It’s a strategy that has failed in Australia and the UK – and while multinational companies have the most to gain, vulnerable Ontarians will struggle. #onpoli #yqg pic.twitter.com/GdNivj6agT
The new welfare pilot program is also being criticized for its similarities to failed programs in Australia and the United Kingdom. In Australia, a comparable program called JobActive has been ‘bureaucratic nightmare’, according to a senate report. The $7.3 billion scheme has resulted in a welfare system where contractors are “rewarded financially for churning people through jobs that don’t last”.