All About Temporary Help Agency and Recruiter Licensing in Ontario

When searching for a job, individuals may turn to a temporary help agency or a recruiter for help.

A temporary help agency is defined in the Employment Standards Act, 2000 (“ESA”), as an “employer that employs persons for the purpose of assigning them to perform work on a temporary basis for clients of the employer”. Individuals that are employed by a temporary help agency, for the purpose of being given work on a temporary basis, are called “assignment employees”.

Recruiters are described in Ontario Regulation 99/23 as “any person who, for a fee, finds, or attempts to find, employment in Ontario for prospective employees”. Individuals who are exceptions, and therefore not considered recruiters, include those who find employment for others as a duty of their own position, school boards, and registered charities.

The ESA sets a minimum standard of rights for employees in Ontario, including individuals employed by a temporary help agency or recruiter. Amendments to the ESA coming into force later this year bolster the protections for prospective assignment employees who use the services of temporary help agencies and prospective employees who use the services of recruiters.

Temporary Help Agency and Recruiter Licensing

Beginning on July 1, 2024, temporary help agencies and recruiters must have a licence to operate. To apply for a license, the agency or recruiter must provide information and documentation that includes a contact person’s information, the organization’s business address, the names and addresses of certain individuals in the organization, and proof of compliance with other legislation. Additionally, a fee of $750 and a security of $25,000 must be paid. All legal entities must apply separately for a temporary help agency or recruiter license, even if they are associated or related businesses.

The amendments coming into effect on July 1 also address how the licensing requirement impacts prospective clients, recruiters, and employers. Section 74.1.1 and 74.1.2 of the ESA state that no client, recruiter, employer, or prospective employer shall knowingly engage or use the services of a temporary help agency or recruiter unless that agency or recruiter is licensed for that purpose.

How To Know if a Temporary Help Agency or Recruiter is Licensed

The Government of Ontario created a searchable public record with the current status of applications and licenses for temporary help agencies and recruiters.

Ontario’s searchable public record provides information about the temporary help agency’s legal name, operating name, business address, licence information, and application status. The contact information name, phone number, and email address of an individual from the temporary help agency or of the recruiter can also be found.

What Happens if a Temporary Help Agency or Recruiter Does Not Comply With Licensing Requirements?

If a temporary help agency or recruiter does not comply with the licensing requirements, then they are subject to penalties outlined in Ontario Regulation 289/01.

Penalties include:

• A $15,000 penalty for the first instance of providing false or misleading information pertaining to their compliance with the licensing requirements
• A $25,000 penalty for the second instance of providing false or misleading information within a three-year period
• A $50,000 penalty for the third (or greater) instance of providing false or misleading information within a three-year period
• A $250 penalty for the first instance of contravening the act in a way other than providing false or misleading information
• A $500 penalty for the second instance of contravening the act in a way other than providing false or misleading information within a three-year period
• A $1,000 penalty for the third (or greater) instance of contravening the act in a way other than providing false or misleading information within a three-year period

Can a Temporary Help Agency or Recruiter Lose Their License?

The license of the temporary help agency or recruiter is subject to expiry one year after the date of issue or of last renewal. In order for the license to remain active, an application for a renewal may be filed.

A license application or license renewal application may be rejected for a wide range of reasons, including:

• Noncompliance with an order issued under the ESA or the Employment Protection for Foreign Nationals Act
• Charging a fee for recruitment services for a foreign national or taking possession of a passport or a work permit of a foreign national, in contravention of the Employment Protection for Foreign Nationals Act
• Not meeting the requirements of the ESA and associated regulations
• Not being registered with the Workplace Safety and Insurance Board

A temporary help agency or recruiter that already holds an active license can also have their license revoked or suspended for the reasons listed above.

In the event of a revocation or suspension, the license holder is entitled to written notice 60 days before the date that that the license is no longer valid. This notice gives the license holder time to show evidence that the licensing requirements were complied with.