Licensing Deadline for Ontario Temporary Help Agencies, Recruiters Nears

The deadline for temporary help agencies and recruiters in Ontario to comply with the new licensing requirements imposed by the government of Ontario is July 1. Applicants must submit their online application by the pending deadline in order to continue operating until their application is either accepted or declined.

Under the new licensing regime, a “temporary help agency” and a “recruiter” are statutorily defined terms.

Essentially, a “recruiter” is any person or organization that attempts to find prospective candidates employment in Ontario—for a fee. Note that a recruiter is not an employee who recruits other employees for their own organization.

A “temporary help agency” is an employer that outsources the services of its own employees to its clients on a temporary basis.

Any temporary help agency or recruiter operating in Ontario should begin the application process as soon as possible, if they have not done so already. If compliance gaps exist, there is still time to remedy those issues prior to the July 1 deadline. The government of Ontario has created a useful resource for understanding the pending licensing obligations.

Ontario employers that leverage temporary help agencies or recruiters should confirm the status of their licensing applications. Service agreements going forward should reflect the new licensing reality. If vendors cannot confirm that their licensing application has been submitted by the deadline, or if vendors fail to maintain their license in good standing thereafter, the employer should have an expressed contractual right to terminate the service agreement without notice or charge. Employers are prohibited from knowingly engaging or using the services of any temporary help agencies or recruiters that do not have a license as of July 1. Contraventions of this obligation can trigger significant fines.

Temporary help agencies and recruiters should also take note that the government of Ontario enacted recent regulations which will impact the licensing process.

ESA Regulation 182/24

Ontario Regulation 182/24 (the “Regulation”) recently came into force and had a few narrow but important changes to the licensing regime.

The Regulation requires enhanced disclosure from applicants with respect to licensing applications in other Canadian jurisdictions and/or the recruitment of foreign nationals. Much like the licensing process in general, the Regulation is intended to protect the most vulnerable workers and ensure applicants seeking a license to operate as a temporary help agency or recruiter have a record of respecting worker protections.

The Regulation also helps applicants applying to operate as both a temporary help agency and recruiter. Where businesses are applying for both licenses concurrently, these applicants are only required to provide one security ($25,000) and one licensing fee ($750). The Regulation also broadens the form of security that may be provided by applicants. Specifically, in addition to the electronic irrevocable letter of credit, applicants can now submit a bond of an insurer under the Insurance Act to write surety and fidelity insurance.

Finally, the Regulation provides two instances in which the $25,000 security requirement is not required to submit a licensing application:

1)    The recruiter will not recruit foreign nationals during the term of the license; or

2)    The recruiter will recruit foreign nationals but only for positions with wages at or above the median hourly wage.

For clarity, a “foreign national” means any individual who is not a Canadian citizen or a permanent resident within the meaning of the Immigration and Refugee Protection Act. And, as of April 2, the median hourly wage in Ontario is $28.39.

Alex Kagan and Jessica Schissler are attorneys with Aird & Berlis LLP in Toronto. Hannah Downard is an articling student at Aird & Berlis LLP in Toronto. © 2024 Aird & Berlis LLP. All rights reserved. Reposted with permission of Lexology.