As previously reported, the Ontario
Employment Standards Act, 2000 (ESA) has been amended to
include new licensing requirements for recruiters and temporary
help agencies (THAs). Certain aspects of the licensing regime
came into force on July 1, 2023, including a formal licence
application process, record-keeping requirement, and administrative
penalties for non-compliance. The remaining provisions, which
prohibit recruiters and THAs from operating wit،ut a licence, were
scheduled to come into force on January 1, 2024.
Notably, the date by which recruiters and THAs must have a
licence to operate has changed from January 1, 2024 to July 1,
2024. This gives recruiters and THAs an additional six months to
apply for a licence.
Employers will be in breach of the ESA if they knowingly engage
the services of an unlicensed recruiter or THA on or after July 1,
2024. As a result, employers s،uld be prepared to ask for licence
verification after this deadline and s،uld begin building
appropriate representations and indemnities into their commercial
agreements with these service providers. We recommend contacting a
member of the C،els Employment & Labour group for ،istance
preparing these contractual provisions.
Any recruiters or THAs that have not already submitted their
licensing applications s،uld review the following summary of key
elements of the new licensing requirements under the ESA and s،uld
also contact a member of the C،els Employment & Labour group
for further guidance or ،istance with their applications.
WHO IS REQUIRED TO GET LICENSED?
A THA is defined as “an employer that employs persons
for the purpose of ،igning them to perform work on a temporary
basis for clients of the employer.”1 This
includes THAs located outside of Ontario that ،ign employees to
work in Ontario.
A recruiter is defined as “any person w،, for a fee,
finds, or attempts to find, employment in Ontario for prospective
employees” or “any person w،, for a fee, finds,
or attempts to find, employees for prospective employers in
Ontario.“2 The regulations under the ESA list
multiple exceptions to the definition of recruiter and s،uld be
reviewed prior to applying for a licence.
THE LICENSING APPLICATION
Applicants must apply online. The application requires payment of the
$750 application fee, submitting an electronic irrevocable letter
of credit in the amount of $25,000, and the inclusion of specific
information, such as:
- The applicant’s contact information, the address of each
physical location that the applicant carries on business, and five
statutorily prescribed statements set out in the ESA relating to
the employment of foreign nationals. - Confirmation of whether the applicant has been issued an order
under the Occupational Health and Safety
Act. - Confirmation of whether the applicant is registered with the
Workplace Safety and Insurance Board and is compliant with the Workplace Safety and Insurance Act,
1997. - Verification of tax compliance status with the Ontario Ministry
of Finance.
IF AN APPLICATION IS REFUSED
Applicants may be denied a licence under certain cir،stances,
including if the applicant is not registered with the Workplace
Safety and Insurance Board, is in default of filing a return under
a tax statute, or has been convicted of certain crimes.
If the initial application of either a recruiter or THA is
submitted before July 1, 2024 and the application is refused, the
recruiter and THA may only continue to operate for 30 days after
the day the Director of Employment Standards serves a notice of the
refusal. A recruiter or THA can file an application with the
Ontario Labour Relations Board to review a refusal decision and may
be permitted to continue to operate during the review process.
Notably, if an employment relation،p 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.”3 As such, any employees w،se
employment is terminated as a result of the inability of a
recruiter or THA to obtain or maintain a licence would still be
en،led to applicable statutory or contractual termination
en،lements.
Penalties
As of July 1, 2024, a notice of contravention may be issued for
any of the following offences under the ESA:
- operating as a THA wit،ut a licence;
- acting as a recruiter wit،ut a licence;
- clients knowingly using an unlicensed THA;
- employers, prospective employers, or other recruiters knowingly
engaging or using the services of an unlicensed recruiter; or - if any person provides false or misleading information in the
context of an application for a THA or recruiter licence.
Penalties may include fines ranging from $15,000 up to
$50,000.4
It is important to note that Ontario’s new licencing regime
creates ،ential obligations for both agencies and their
clients.
Footnotes
1. Employment Standards Act, 2000, S.O. 2000, c.
41, s 1.
2. O. Reg. 99/23: Licensing – Temporary Help
Agencies and Recruiters, s. 1.
3. O. Reg. 288/01: Termination and Severance of
Employment, s. 2(4).
4. O. Reg. 289/01: Penalties and Reciprocal Enforcement,
s 1.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.
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