Starting January 1, 2024, Ontario businesses functioning as temporary help agencies or recruiters must obtain a license to operate.
This requirement stems from the Working for Workers Act, 2021, which amended the Employment Standards Act, 2000 (ESA) to mandate these entities to possess a valid license.
How does this new regulatory change impact your business? Keep reading to find out!
Subject to certain exceptions, under the ESA and Regulation O. Reg. 99/23 (the “Regulation”):
- Temporary help agencies are defined as “an employer that employs persons for the purpose of assigning them to perform work on a temporary basis for clients of the employer.”
- Recruiters are defined as “any person who, for a fee, finds, or attempts to find, employment in Ontario for prospective employees” or “any person who, for a fee, finds, or attempts to find, employees for prospective employers in Ontario.”
The licensing process occurs in two stages:
- The first stage began on July 1, 2023, allowing agencies and recruiters to submit online applications throughout the remainder of this year.
- The second stage starts on January 1, 2024, requiring these businesses to hold a valid license to continue operations.
- Those that applied before December 31, 2023, can continue operating until they receive a response.
Application Process and Fees
- Each application or renewal costs $750, payable upon submission.
- Every legal entity that operates as a temporary help agency or recruiter must apply for a separate license.
- Applicants must provide a security deposit of an electronic irrevocable letter of credit worth $25,000 to the Director of Employment Standards.
- Licenses are valid for one year from the issuance date, with potential for longer validity as prescribed.
- The Ontario government will maintain a searchable database of licensed businesses, ensuring transparency and easy verification.
Grounds for Refusal of Application or Renewal
An application or renewal may be refused for various reasons, including:
- Possession or retention of a foreign national’s passport or work permit in violation of the Employment Protection for Foreign Nationals Act, 2009.
- Conviction of specified offences under the Criminal Code or Immigration and Refugee Protection Act without a record suspension.
- Non-registration with the Workplace Safety and Insurance Board (WSIB) or failure to provide required information.
- The applicant hasn’t filed their tax return on time.
Notice and Compliance Period
Applicants and registrants receive a 60-day written notice if the Director intends to refuse, suspend, or revoke a license. This period allows businesses to demonstrate compliance with licensing requirements and justify their eligibility for the license.
Failure to Comply
This new requirement for Ontario employers sets penalties for the following actions:
- Providing false or misleading information in license applications.
- Engaging with unlicensed recruiters knowingly. Penalties for these actions range from $15,000 for a first contravention to $50,000 for second or third contraventions within a 3-year period.
Considerations for Ontario Employers
To ensure legal compliance, it’s crucial for employers to make well-informed choices when collaborating with recruiters and temporary help agencies.
Take advantage of the Ontario government’s online database, designed to empower employers with real-time information about licensed recruiters and temporary help agencies. A quick search can confirm the validity of their licenses, granting you the confidence to proceed with a partnership.
Remember, negligence can lead to more than just missed opportunities – we’re talking hefty penalties that are totally avoidable. So, invest a little time upfront to ensure a seamless and compliant collaboration, protecting both your business and the talented individuals you work with!
Questions? We’re here to help you stay compliant! Get in touch with our team today.