The Working for Workers Act, 2021 previously amended the Employment Standards Act, 2000 [ESA] to introduce a mandatory licensing regime for temporary help agencies (“THAs”) and recruiters operating/acting in Ontario. We provided a detailed summary of this new licensing requirement in our previous blog and noted that as of January 1, 2024, THAs and recruiters must be licensed to operate/act in Ontario. This grace period has since been extended, and THAs and recruiters now have until July 1, 2024, to obtain their licenses.
Transitional Rule May Apply for Applications Submitted before July 1, 2024
Since July 1, 2023, THAs and recruiters have been able to apply for their respective licenses. Starting July 1, 2024, THAs and recruiters will not be able to operate/act in Ontario without a license, unless the transitional rule applies.
The transitional rule outlines that if a THA or recruiter submits a licensing application before July 1, 2024, and has not received a decision by July 1, 2024, they may continue to operate/act beyond July 1, 2024. This applies until the THA or recruiter is notified by the Ministry of Labour Immigration, Training, and Skills Development (the “Ministry”) that the license has either been issued or refused.
If an application is refused but was submitted before July 1, 2024, the THA or recruiter may continue to operate/act for 30 days after the notice of refusal is served. THAs and recruiters may also file an application with the Ontario Labour Relations Board (“OLRB”) for a review of the decision, in which case, the THA or recruiter may continue to operate/act during the review process unless the OLRB orders otherwise.
Submitting an Application On or After July 1, 2024
If a THA or recruiter submits an application on or after July 1, 2024, they are prohibited from operating/acting until the Ministry issues them a license. In this case, even if the THA or recruiter files an application with the OLRB to review the decision, they may not operate/act unless they obtain a license.
Using THAs and Recruiters
Unless the transitional rule is in effect, employers are prohibited from knowingly engaging or using the services of any recruiter unless the recruiter holds a license to act as a recruiter. Where the THA or the recruiter submitted their licensing application before July 1, 2024, the prohibition is not in effect during:
- the 30-day period after the day the Ministry serves the notice of the refusal; and
- the period during which an application to review the refusal is ongoing with the OLRB, unless the OLRB orders otherwise.
Employers and prospective employers can verify whether a THA or recruiter is licensed or whether their licensing application is under review through an online portal, which is currently available through the Ministry’s website.
Penalties
Violations of the licensing framework under the ESA may result in enforcement action, which can include:
- Ordering compliance;
- Issuing monetary penalties, ranging from $15,000 for a first contravention and up to $50,000 for a third convention in a three-year period; and
- Prosecution.
Takeaways for Employers
Starting July 1, 2024, it will be a violation of the ESA for employers to knowingly use the services of unlicensed THAs or recruiters, unless any of the exceptions outlined above apply. After July 1, 2024, to ensure compliance with the licensing requirements, employers who use the services of THAs or recruiters will be required to verify the licensing status of the THA or recruiter. This can be done through the Ministry’s online portal and by engaging with the THA or recruiter.
Additionally, organizations that operate as a THA or recruiting agency in Ontario must be aware of their licensing obligations under the ESA and should prepare to ensure compliance with the licensing framework well in advance of July 1, 2024.
This blog is provided as an information service and summary of workplace legal issues.
This information is not intended as legal advice.
