Ontario’s new licensing requirements for temporary help agencies and recruiters

The Government of Ontario has announced that, beginning January 1, 2024, it will require temporary help agencies (“THA”) and recruiters to have a licence to operate in the province.

The new licensing system will require THAs and recruiters to submit an application online to the Ministry of Labour, Immigration, Training and Skills Development (the “Ministry”). Licences must be renewed annually. The fee for each application or renewal is $750. With their application, THAs and recruiters are required to provide an electronic irrevocable letter of credit in the amount of $25,000 to the Director of Employment Standards that may be used to repay owed wages to employees, if necessary.

Every legal entity that operates as a THA or that acts as a recruiter must apply for a licence. If a legal entity operates as both a THA and a recruiter, it must submit two separate applications.

THAs and recruiters that apply for a licence before January 1, 2024, may continue operating until they receive a decision from the Ministry on their application. If the licence is refused, the THA or recruiter may continue to operate for 30 days after the date the Ministry serves notice of the refusal. For applications made on or after January 1, 2024, THAs and recruiters may not operate until a licence is issued. Applicants who have been refused a licence or renewal may file an application with the Ontario Labour Relations Board to review the decision.

Information about the status of applications and a list of licence holders is posted on the Ministry’s website.

Penalties

The following actions will be prohibited by the new rules in the Employment Standards Act and Regulation O. Reg. 99/23:

• Providing false or misleading information in the context of application for a THA or recruiter licence
• Operating as a THA without a licence
• Acting as a recruiter without a licence
• Clients knowingly using an unlicensed THA
• Employers, prospective employers or other recruiters knowingly engaging or using the services of an unlicensed recruiter

Violations of these rules may result in an enforcement action, including compliance orders, monetary penalties or prosecution. The person or employer in violation of these rules may be subject to a $15,000 penalty for a first contravention, a $25,000 penalty for a second contravention within a three-year period, or a $50,000 penalty for a third contravention within a three-year period.  

Takeaways

THAs and recruiters should be preparing their applications now, given the January 1, 2024, deadline.

Employers should ensure that as of January 1, 2024, they are engaging the services of only licensed THAs and recruiters by checking the Ministry’s online database. Accepting any temporary workers from a non-licensed THA or recruiter could result in significant penalties.

For more information about new licensing requirements for temporary help agencies and recruiters in Ontario, please reach out to a member of Torkin Manes’  Labour & Employment Group.