Temporary staffing firms and recruiters must have a license to operate in Ontario starting Jan. 1, 2024, according to the province in a formal announcement in July.
“Our government’s licensing system will ensure law-abiding businesses can have confidence in the [staffing firms] 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,” said Monte McNaughton, minister of labour, immigration, training and skills development.
Concerns had been raised by the government that some staffing firms paid workers below minimum wage and denied workers basic employment rights to gain an unfair advantage.
ACSESS, the Canadian staffing association, worked closely with the Ontario government on the new licensing framework, Mary McIninch, executive director and director of government relations at ACSESS, noted to SIA.
“ACSESS strongly endorses the establishment of a licensing regime ensuring that all temporary help agencies comply with their legal obligations,” McIninch said in a formal announcement. “This initiative creates a level playing field and results in a fairer industry for [staffing firms], their clients and assignment employees alike. We applaud the government for taking a bold approach that includes enforcement initiatives against [staffing firms] that operate illegally and the client companies that use them.”
Other industry associations lauded the move as well.
“Recruiters and temporary help agencies are critical to helping tourism and hospitality businesses access the skilled workers they need to thrive in Ontario year-round,” said Chris Bloore, president and CEO of the Tourism Industry Association of Ontario. “This new and robust licensing system is a welcome tool to protect some of the most essential workers in our industry and to support businesses in choosing reputable recruitment partners.”
Under the new licensing regime, it will be illegal for companies to knowingly use unlicensed staffing firms. Workers will also be able to check if the firms they are using are licensed.
To obtain a license and operate their business, staffing firms and recruiters will need to provide C$25,000 (US$18,850) 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 C$50,000 (US$37,700) penalty based on repeat violations — the highest amount in Canada.
More information on licensing can be found online on Ontario's website.
Staffing firms that apply for a license before Jan. 1 may continue operating until they receive a decision from the ministry on their application, according to the province. If a license or renewal is refused, an applicant has 30 days to cease operations. Licenses must be renewed each year.
The Ministry of Labour, Immigration, Training and Skills Development also noted:
- Ontario had approximately 2,300 staffing firms as of December 2022.
- Staffing firms employed 114,000 full-time employees in 2022.
- Inspections of staffing firms in 2021 and 2022 at farms, food processing, storage and warehousing facilities and retirement homes found that C$4.2 million (US$3.2 million) was owed to more than 10,000 employees.
