Temporary Help Agencies & Recruiters: Licensing Requirements

confused businessman checking time on wristwatch

As of July 1, 2024, amendments to the Employment Standards Act, 2000 (“ESA”) relating to temporary help agency (“THA”) and recruiter licensing are in effect. Companies who act as THAs are required to be licensed through a process established by the Government of Ontario. In addition, recruiters also require licences as of the same date. Details on licensing can be obtained directly on the Government of Ontario’s website at this link.

What is a Temporary Help Agency?

The ESA defines a THA as follows: “temporary help agency” means an employer that employs persons for the purpose of assigning them to perform work on a temporary basis for clients of the employer.

In essence this captures companies that employ individuals for the purpose of assigning those employees to work for other companies temporarily. For example, a company who hires cleaning staff who are the assigned to work temporarily at a work site of one of the company’s clients for a fixed duration would fit the definition. The employee in this case, i.e. the “assignment employee” is an employee of the THA and not an employee of the end client. When the assignment ends, the employee continues to be an employee of the THA unless or until the employment relationship is terminated.

If your business matches this description, there is a good chance that your business is a type of THA that needs to be licensed under the new ESA rules. Applications should be made as soon as possible to ensure that there is no interruption to your business or issues stemming from a failure to obtain a licence in a timely manner.

What is a Recruiter?

The ESA has a lengthy definition of recruiter in O. Reg. 99/23. The basic definition includes any individual, whether a corporation, partnership, or sole proprietorship, who finds or attempts to find employment for employees or finds employees for employers in exchange for a fee. It does not include internal members of an HR department, for example, seeking employees directly for the employer, or an employer seeking to find employees for themselves.

The licensing requirements apply beyond Ontario. A recruiter does not need to be located in Ontario to be required to obtain a licence.

Application Requirements

THAs and recruiters must apply for a licence as soon as possible, and if possible, prior to or on July 1, 2024. Transitional rules currently in effect allow THAs and recruiters who apply prior to or on July 1, 2024, to continue to operate until the Ministry of Labour either issues or refuses to issue their licence. However, a failure to apply prior to or on July 1, 2024 means that the THA or recruiter must cease to operate until the Ministry of Labour makes a decision on their licence.  

How to Apply

Application can be submitted online at this link. Employers must have a number of documents to complete their application and should have them ready. The Ministry of Labour has provided a sample listing of documents which may be required:

  • contact information, including email addresses, for one or more individuals who may be contacted if the ministry has questions about the application
  • the address of each location where the applicant carries on business inside and outside of Canada
  • if the applicant is a corporation, the name and address of each corporate officer and director
  • if the applicant is a partnership, the name and address of each partner
  • information about the applicant, corporate officers and directors, partners and similar applications and licences in other Canadian jurisdictions
  • if the applicant is a recruiter, whether the applicant will act as a recruiter in respect of foreign nationals during the term of the licence and if so, whether the recruitment is only in respect of positions with wages at or above the median hourly wage.
  • information about certain criminal convictions of the applicant, corporate officers and directors, or partners, and whether they are subject to a ban under the Ontario Immigration Act, 2015
  • information about other legal persons (which include businesses and individuals) the applicant engages or uses in connection with the recruitment or employment of foreign nationals
  • information about compliance with the:
    • Employment Standards Act, 2000
    • Employment Protection for Foreign Nationals Act, 2009
    • Occupational Health and Safety Act
    • Workplace Safety and Insurance Act, 1997
  • tax compliance verification number obtained from the Ontario Ministry of Finance showing tax compliance
  • in some cases, a security in the amount of $25,000, which can take the form of an electronic irrevocable letter of credit or a surety bond

Security Requirement

THAs who apply for an initial licence to operate are required to provide a security of $25,000 to the Director of Employment Standards. Information on the specific of the security requirements are provided by the Director of Employment Standards.

Recruiters are also required to provide a security requirement of the same amount except in two scenarios: (1) the recruiter will not act as a recruiter of foreign nationals during the term of the licence, or (2) the recruiter will act as a recruiter of foreign nationals during the term of the licence, but only in respect of positions at or above the median hourly wage. The median hourly wage is published by the Government of Canada at this link.

Security can be provided as an electronic irrevocable letter of credit or as a surety bond. The Government of Ontario has provided templates of both types of securities: Irrevocable Standby Letter of Credit and Surety Bond Template.

Application Fee

A non-refundable application fee of $750 applies to initial applications as well as to annual review applications.

At Bridge Legal & HR Solutions we can help you untangle and understand the web of obligations that applies to your employment relationships. To find out how we can help, contact us through our contact form or call us at 647-794-5442.

Latest Posts

Two people at a table.

The Underrealized Value of Employee Coaching

Leadership in the workplace transcends traditional management, focusing on motivation, empowerment, and continuous learning. Effective leaders coach employees, fostering engagement and improved performance. Key traits include visionary guidance, empathy, adaptability, clear communication, and mentorship. Integrating coaching boosts employee confidence, commitment, and productivity. Regular evaluations ensure coaching effectiveness, benefiting both individual and organizational success.

Read More »
confused businessman checking time on wristwatch

Temporary Help Agencies & Recruiters: Licensing Requirements

As of July 1, 2024, amendments to the Employment Standards Act, 2000 requiring temporary help agencies (THAs) and recruiters in Ontario to be licensed come into effect. Applications must be submitted with various documents and a $750 fee. THAs must provide a $25,000 security and recruiters must also do so unless certain conditions are met. Find out more inside.

Read More »