Important Amendments Made to the Temporary Help Agency and Recruiter Licensing Framework in Ontario

By: Jessica M. Toldo, Paul E. Broad

On July 1, 2023, a new licensing regime was introduced under the Employment Standards Act, 2000 for any temporary help agency (THA) or recruiter operating in Ontario. Of significant concern to many recruiters and THAs was the requirement to provide a $25,000 irrevocable line of credit in order to be licensed.

While the new regime was to take effect January 1, 2024, this deadline was extended to July 1, 2024 to allow for further consultation. On April 29, 2024, the Ontario government enacted regulatory changes that modify the security requirement to permit surety bonds to be used, eliminate the requirement for a single organization to pay duplicate THA and recruiter licensing fees and securities, and exempt certain recruiters from the requirement to provide security as a condition to becoming licensed.

We have outlined key regulatory amendments below.

Amended Security Requirements

Pursuant to regulatory amendments to O. Reg. 99/23, Licensing – Temporary Help Agencies and Recruiters, security may now be provided in either one of two forms:

• an electronic irrevocable line of credit (ILOC) issued by a bank or credit union
• a bond of an insurer licensed under the Insurance Act to write surety and fidelity insurance

In either case, the ILOC or surety bond must contain a provision that provides for automatic renewal after the expiry date and permits partial drawing without any conditions. The amount of the required security remains unchanged at $25,000.

Duplicate Licensing Fees and Security No Longer Required

The regulation was also amended to ensure that where a single organization applies both for a THA licence and a recruiter licence, it will not be required to pay duplicate fees or provide duplicate security. It is also anticipated that the application process may be streamlined for these organizations.

In respect of fees, the revised regulation provides that a THA or recruiter who is applying for a licence will not be required to pay the application fee (currently $750) if the following criteria are met:

• The applicant has paid a fee in respect of another application for a licence or renewal and holds a licence that was issued less than a year after the date of the application or there is a decision pending on the other application.
• The two fees are for different aspects of the business (i.e., the initial fee was paid for a recruiter licence and the second application is for a THA licence, or vice versa).

This exemption cannot apply to two consecutive applications made by an applicant.

In respect of security, the amending regulation clarifies that the security requirement will apply to licensees directly and that if a single licensee applies for both a THA and a recruiter licence, it will need to provide only one form of security.

Limitation on Requirement for Recruiters to Provide Security

A recruiter is no longer required to provide security if:

• the recruiter will not recruit foreign nationals during the term of the licence
• the recruiter will recruit foreign nationals but only in respect of positions with wages at or above the median hourly wage as published on a Government of Canada website as of the date of application (currently $28.39 per hour)

If a recruiter applies for a licence and does not provide the security, it is a condition of the licence that, if the recruiter does recruit foreign nationals, it may do so only in respect of positions with wages at or above the median hourly wage.

If a recruiter does intend to recruit foreign nationals for positions that may fall below the median hourly wage, it will need to provide the necessary security.

The regulatory amendments also provide for transitional provisions where a recruiter has provided the security and, during the term of the licence, provides written notice to the Director of Employment Standards that it will no longer act as a recruiter of foreign nationals during the term of the licence or will limit any such recruitment to only positions with wages at or above the median hourly wage.

Key Takeaways

These regulatory amendments are good news for many THAs and recruiters who may have been concerned about some of the previous requirements, such as the requirement to provide a $25,000 ILOC as security for a licence.

For any THA or recruiter who needs to apply for a licence, the government’s portal for licensing applications is not currently accepting new applications, but likely will again in the near term. However, it is important to note that the July 1, 2024 implementation date has not changed.

Should you have any questions about the impact of this regulatory change on your workplace, please contact your regular Hicks Morley lawyer for assistance.

The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ?

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Tags: Employment Standards Act, Insurance Act, Temporary Help Agency