The Working for Workers Act, 2021 (the “Act”) of Ontario was ratified on December 2, 2021. The Employment Standards Act, 2000 (“ESA”) was revised by the Act, which included establishing a licensing system for temporary help agencies (“THA”) and recruiters.

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The law will be implemented in two phases, the first of which will take effect on July 1st, 2023, and the second of which will do so on January 1st, 2024.

On July 1st, 2023: THAs and recruiters will be able to create and submit their licensing applications. It offers detailed instructions on how to apply for a license, outlines the conditions in which a license will or won’t be granted, and expiry of a license.

Effective January 1, 2024: To operate as a THA or working as a recruiter in Ontario will require a valid license, except for a limited exception. During a transition period, as outlined in O. Reg. 99/23, THAs and recruiters who have submitted their license applications by December 31, 2023, will be allowed to continue their operations without a license after January 1, 2024.                                                                                                                                                                                                                                                       

To provide additional guidance on the licensing regime, the Ontario government has published three regulations, all of which will come into effect on July 1, 2023.

O. Reg. 99/23: “Licensing – Temporary Help Agencies and Recruiters” offers the following guidance:

• • A recruiter, as defined under the ESA, is an individual or entity that, for a fee, seeks employment opportunities for prospective employees in Ontario or finds employees for prospective employers in Ontario. Exceptions to this definition are outlined in the regulation.

• • The prescribed application fee for both THAs and recruiters is $750, payable at the time of submission.

• • For new license applications, the applicant must provide an electronic irrevocable letter of credit amounting to $25,000.

• • Circumstances in which a license may not be granted or renewed include possession or retention of a passport or work permit of a foreign national in violation of the Employment Protection for Foreign Nationals Act, 2009, failure to register with the Workplace Safety and Insurance Board, default in filing a tax return, or conviction under specific provisions of the Criminal Code (Canada) or the Immigration and Refugee Protection Act (Canada).

• • The Government of Ontario will maintain a public record on their website, listing all licensed individuals and those whose licenses have been affected.

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O. Reg. 288/01: “Termination and Severance of Employment” provides the following guidance:

• • If the Director of Employment Standards refuses to issue or renew a license for a temporary help agency or recruiter, resulting in employment termination, the contract of employment will not be considered impossible to perform or frustrated.

O. Reg. 289/01: “Penalties and Reciprocal Enforcement” outlines the penalties for violating the Act, including:

• • A $15,000 penalty for providing false or misleading information under the Act. For subsequent violations within a three-year period, fines of $25,000 and $50,000 will be imposed.

• A $250 penalty for any other contravention of the Act. For subsequent violations within a three-year period, fines of $500 and $1,000 will be imposed.

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• Employers should be aware that these new regulations have broad implications. From January 1, 2024, it will be against the ESA to knowingly engage or use the services of an unlicensed THA or recruiter.