Ontario Puts Into Force New Licensing Requirements for Temporary Help Agencies and Recruiters
On December 2, 2021 Ontario’s Working for Workers Act, 2021 (the “Act”) received Royal Assent. The Act amended the Employment Standards Act, 2000 (“ESA”), including by introducing a licensing regime for temporary help agencies (“THA”) and recruiters. The Ontario government recently proclaimed this licensing legislation into force, thus setting dates for when THAs and recruiters must be licensed in Ontario.
What’s Happening and When?
The legislation is being rolled out in two parts, with the first part coming into force on July 1, 2023 and the second part on January 1, 2024.
The provisions coming into force on July 1, 2023 will allow THAs and recruiters to create and submit their licensing application. Among other things, the provisions provide specific guidance on how to apply for a licence, outline the circumstances under which a licence will or will not be granted, and note when a licence will expire.
Starting on January 1, 2024, no person will be permitted to operate as a THA or act as a recruiter unless they hold a licence for that purpose, except pursuant to the following limited exception. O. Reg. 99/23 provides for a transition period. This period will allow THAs or recruiters to operate without a licence after January 1, 2024 provided that they have applied for a licence by December 31, 2023.
The Ontario government published three regulations to provide additional guidance on the licensing regime, which all come into force on July 1, 2023.
O. Reg. 99/23: “Licensing – Temporary Help Agencies and Recruiters”, provides the following guidance:
- Under the ESA, a recruiter is defined as (1) “any person who, for a fee, finds, or attempts to find, employment in Ontario for prospective employees” or (2) “any person who, for a fee, finds, or attempts to find, employees for prospective employers in Ontario”. It is important to note that there are specific exceptions to the definition of recruiter set out in the regulation.
- The prescribed fee for both applications is $750 and will be payable at the time that the application is submitted.
- When applying for a new licence, the applicant must provide an electronic irrevocable letter of credit in the amount of $25,000.
- Some examples of when a licence might not be granted or renewed include if the applicant (1) has ever taken possession of or retained a passport or a work permit of a foreign national in contravention of the Employment Protection for Foreign Nationals Act, 2009, (2) is not registered with the Workplace Safety and Insurance Board, (3) is in default of filing a return under a tax statute, or (4) has been convicted of select Criminal Code (Canada) or Immigration and Refugee Protection Act(Canada)
- The Government of Ontario will create a public record on their website of every person licensed under the Act, as well as those who have had their licence
O. Reg. 288/01: “Termination and Severance of Employment”, provides the following guidance:
- In the event that the employment is severed because the Director of Employment Standards “has refused to issue or renew, or has revoked or suspended, a licence to operate a temporary help agency or act as a recruiter”, then the “contract of employment has not become impossible to perform or been frustrated”.
O. Reg. 289/01: “Penalties and Reciprocal Enforcement”, outlines the penalties for contravening the Act, some of which include:
- A $15,000 penalty for providing false or misleading information under the Act. Additional fines of $25,000 and $50,000 will be applied for the second and third violation in a three-year period, respectively.
- A $250 penalty for any other contravention of the Act. Additional fines of $500 and $1,000 will be applied for the second and third violation in a three-year period, respectively.
Takeaways for Employers
The new regulations impact employers broadly. Businesses that use THAs or recruiters should be aware that as of January 1, 2024, it will be a violation of the ESA to knowingly engage or use the services of a THA or recruiter who is not licensed. We recommend checking with your service provider to ensure they are aware of and in compliance with the new licensing requirements.
If you are a business that performs temporary help or recruitment services, or that engages other businesses for these services and you have any questions about this update, please contact any member of our Ontario Labour and Employment team.