Beginning on January 1, 2024, the Ontario Government will require temporary help agencies to obtain licensing through the Ministry of Labour, Immigration, Training and Skills Development (the “Ministry”) to operate under new amendments to the Employment Standards Act. This blog post looks at the latest changes imposed by the provincial government for the upcoming year.

Legislative Framework and Prior Amendments

The changes pertaining to temporary help agencies come after the initial amendments to the Employment Standards Act in December 2021. Through recent years, the Ministry has reportedly uncovered issues relating to basic employment rights, such as minimum wage payment, to workers in particular sectors.

These legislative amendments set out new licensing requirements for temporary help agencies and recruiters to provide additional protection for vulnerable workers. Since then, the government has been rolling out and implementing corresponding regulations.

New Amendments to the Employment Standards Act

As of January 1, 2024, section 74.1.1 of the Employment Standards Act will require temporary help agencies to hold an operating license. Additionally, recruiters must hold a license authorizing them to act as a recruiter.

Under the new regime, prospective employers and current clients of temporary help agencies will be prohibited from “knowingly engag[ing] or us[ing] the services of a temporary help agency unless the person who operates the temporary help agency holds a license for that purpose.”

What Temporary Help Agencies & Recruiters Are Required to Hold a License?

All temporary help agencies and recruiters must hold licenses under the legislative amendments. Generally, a temporary help agency is an employer who employs persons for the purpose of assigning them to a client requiring work on a temporary basis. The licensing requirement also applies to temporary help agencies located outside of Ontario but who assign employees to work within Ontario.

A recruiter is generally known as a person who finds or attempts to find prospective employees who work in Ontario or finds prospective employers for employees in Ontario. Both of these entities are further defined in the Employment Standards Act.

Applying for a License

The first stage of these amendments to the licensing application process began in July 2023 when applications opened. As of January 1, 2024, temporary help agencies and recruiters will be prohibited from operating without a license unless the transitional rule applies to their circumstances.

It is important to note that every legal entity that operates as a temporary help agency or recruiter must apply for a license. Further, legal entities who are considered to be one employer, under section 4 of the Employment Standards Act, must each apply separately. For example, a legal entity that operates as a temporary help agency and also acts as a recruiter must submit two separate licensing applications, each requiring its own letter of credit and application fee.

What Is the Transitional Rule?

Those who have submitted a licensing application before January 1, 2024, but have yet to receive a decision from the Ministry by that date will be permitted to continue operations as a temporary help agency or as a recruiter on and after January 1, 2024. This is referred to as the “transitional rule,” which will apply until the Ministry notifies the applicant that their license has been issued or their application has been refused.

Submitting an Application on or After January 1, 2024

The transitional rule will not apply to applicants who submit a license application on or after January 1, 2024. Instead, the temporary help agency or recruiter will be prohibited from operating until they are issued a license.

Penalties for Violations of the Employment Standards Act

If a person provides false or misleading information during the application process, an employment standards officer may issue a notice of contravention with a resulting penalty. These penalties may range from $15,000 for a first contravention, to $25,000 for a second contravention within a three-year period, to $50,000 for a third contravention in a three-year period.

Similar penalties will also apply to any infringement related to entities operating as a temporary help agency or recruiter without a license. Penalties may also be issued against those who knowingly engage or use the services of an unlicensed temporary help agency or recruiter.

Refused Applications

If an application is refused, the applicant may commence an application with the Ontario Labour Relations Board. If the application was submitted before January 1, 2024, the entity may be permitted to continue operating for 30 days after the date the Ministry serves notice of the refused application. If the entity chooses to commence an application with the Ontario Labour Relations Board, it may also continue to operate during the review process unless otherwise directed by the Board.

Contact the Lawyers at Grosman Gale Fletcher Hopkins LLP in Toronto for Trusted Advice on Temporary Help Agencies & Recruiters

The legislative framework governing employment matters in Ontario is constantly evolving at both the federal and provincial levels. An example of the most recent changes impacting temporary help agencies, recruiters, and employers who engage the services of these entities is the upcoming amendments to the Employment Standards Act.

The experienced labour and employment lawyers at Grosman Gale Fletcher Hopkins LLP remain up-to-date on legislative developments impacting employees and employers across the province. By doing so, our lawyers ensure that they provide clients with comprehensive advice on how legislative updates may impact their employment or day-to-day operations. To schedule a consultation with a member of our labour and employment team, contact us online or call us at 416.364.9599.