Understanding Ontario’s New Licensing for Recruiters and Temporary Staffing Agencies (Updated)

ontario licensing
ontario licensing

On April 29, 2024, significant amendments to Ontario’s licensing regime for recruiters and temporary help agencies (THAs) will take effect, as outlined in O. Reg 182/24. These changes, particularly concerning security requirements, are set to reshape how recruitment and temporary staffing services operate within the province. This article aims to demystify these amendments, providing a clear and comprehensive overview for employers, recruiters, and THAs alike.

Check out our coverage of Ontario’s Bill 27 in past blog posts. See here and here. It was extended once, and now is extended to July 1, 2024. If you’re a business owner in Ontario utilizing the services of a staffing agency, you can’t ignore these new rules.

Background and Implementation Timeline

The amendments build on the foundation laid by Bill 27, the Working for Workers Act, 2021, which introduced a licensing requirement for recruiters and THAs. The goal of these regulations is to ensure fair treatment and protection for workers, especially those recruited from abroad. By July 1, 2024, all recruiters and THAs must be licensed to operate, emphasizing the urgency for these entities to understand and comply with the new requirements.

Key Changes to the Licensing Regime

The recent amendments introduce several notable changes, particularly regarding the security requirements for obtaining a license. Here’s what you need to know:

  • Exemption from Providing Security: Applicants for a recruiter license who do not recruit foreign nationals, or who recruit foreign nationals for positions paying at or above Ontario’s median hourly wage ($28.39 as of April 2, 2024), are now exempt from providing security at the time of application.
  • Conditions for Exemption: Those exempt from posting security will have a term and condition added to their license regarding the recruitment of foreign nationals. Licensees can later expand their scope by providing written notice and posting the required security.
  • Alternative Security Options: In addition to an electronic irrevocable letter of credit, security can now also be posted in the form of a bond from an insurer licensed to write surety and fidelity insurance, with the total security required being $25,000.

What Employers Need to Know

The amendments are a welcome development for many in the industry, simplifying and clarifying the requirements for providing security. Here are the key takeaways for employers:

  • Ensure any recruiters or THAs you engage are properly licensed by the July 1, 2024 deadline. This includes preparing and filing application packages in advance of this date.
  • Be aware that engaging with unlicensed recruiters or THAs after the deadline is prohibited, with monetary penalties starting at $15,000 for a first contravention.
  • Consider incorporating safeguards into agreements with recruiters and THAs to ensure compliance with the new licensing regime.

The Ontario government is facilitating compliance by maintaining a searchable database of licensed recruiters and THAs on its website, making it easier for employers to verify the licensing status of their service providers.

See our separate posts about how these new rules affect HR Managers, home builders, warehousing and logistics, and construction companies in particular.

Conclusion

The amendments to Ontario’s licensing regime for recruiters and temporary help agencies represent a significant step towards enhancing worker protections and ensuring fair practices within the recruitment and temporary staffing industry. By understanding and adhering to these changes, recruiters, THAs, and employers can contribute to a more equitable and transparent labor market in Ontario.

For those seeking further guidance on navigating the new licensing requirements or preparing an application, consult with legal experts in employment and labor law.

MGR Workforce is a fully certified staffing agency that is properly licensed. Contact us today for all your staffing needs.

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