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Ontario to require temporary help agencies, recruiters to have license to operate starting in 2024

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July 6, 2023
By Todd Humber

Photo: M Einero/peopleimages.com/Adobe Stock

Ontario will require temporary help agencies (THAs) and recruiters to have a license to operate in the province starting next year.

The government said the move is designed to protect vulnerable and temporary foreign workers. Inspections by Ministry of Labour, Immigration, Training and Skills Development officers have shown that multiple temporary help agencies in the province are illegally paying people below the minimum wage and denying other basic employment rights to gain an unfair competitive advantage over law-abiding agencies by undercutting rates.

“While temporary help agencies are vital to Ontario’s businesses and jobseekers looking to get their foot in the door, for too long they have operated in a grey zone that allows criminals to prey on vulnerable workers,” said Monte McNaughton, Minister of Labour, Immigration, Training and Skills Development.

“Our government’s licensing system will ensure law-abiding businesses can have confidence in the THAs and recruiters they work with and that those who abuse workers face the harshest fines in Canada and are banned from operating in our province.”


Online database

Many businesses and jobseekers in Ontario are often unaware if an agency or recruiter they are working with is meeting their employment standards obligations or has a history of violations, the province said.

They will now be able to check the ministry’s online database before working with one, to see if they have met the province’s stringent licensing requirements. It will be against the law for companies to knowingly use unlicensed businesses for staffing, and those who hire deceitful recruiters will be required to repay workers for any illegal fees charged to them, it said.

The move was applauded by the Association of Canadian Search, Employment and Staffing Services (ACSESS).

“ACSESS strongly endorses the establishment of a licensing regime ensuring that all temporary help agencies comply with their legal obligations,” said Mary McIninch, executive-director of government relations. “This initiative creates a level playing field and results in a fairer industry for THAs, their clients and assignment employees alike. We applaud the government for taking a bold approach that includes enforcement initiatives against THAs that operate illegally and the client companies that use them.”

Jonathan Blackham, director policy and public affairs at the Ontario Trucking Association (OTA), said the move will protect workers from “unscrupulous companies who sidestep their essential responsibilities by exploiting workers and denying them their labour rights.”

“This announcement is another important step toward achieving our common goals of protecting workers and ensuring companies are competing on a level playing field,” he said.

Irrevocable letter of credit

To operate their businesses, THAs and recruiters will need to provide $25,000 in the form of an irrevocable letter of credit that can be used to repay owed wages to employees. Offenders could face up to a $50,000 penalty based on repeat violations – the highest amount in Canada, according to the Ontario government.

Quick Facts

  • THAs and recruiters can find more information and apply here.
  • Those that apply for a licence before January 1, 2024, may continue operating until they receive a decision from the ministry on their application.
  • If a licence or licence renewal is refused, the applicant has 30 days to cease operating as a THA or recruiter.
  • Applicants have to apply to renew their licence each year.
  • There were approximately 2,300 placement agencies and temporary help business locations operating in Ontario in December 2022 according to Statistics Canada.
  • There were about 114,000 full-time employees employed by temporary help agencies in 2022.
  • In 2020-21, ministry inspections on THA use in farms, food processing, storage and warehousing and retirement homes found $4.2 million was owed to more than 10,000 employees.

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