Beginning January 1, 2024, Temporary Help Agencies (“THAs”) in Ontario must be licensed by the Ontario Government to continue operating their business. The Canadian Broadcasting Company states that this change was made in response to the multiple instances authorities have found of THAs paying temporary foreign workers below minimum wage and otherwise denying them of their employment rights.
These new licensing requirements will impact approximately 2,300 THAs and 114,000 temporary workers across the province. They also have wide-spreading effects for businesses who work with recruitment agencies which hire temporary employees.
This article provides an overview of what Ontario’s new licensing requirements are, and how they will impact employers who want to work with THAs. For advice on how these new laws will impact your business specifically, and how to ensure compliance with Ontario employment laws, please contact our employer lawsuit lawyers at Walker Law.
What Do the New Laws Mean for THAs and Recruiters?
A “THA” is a company that hires people for the purpose of assigning them to work for other employers (who are called “clients” of the THA) on a temporary basis.
Starting on January 1, 2024, all THAs must be licensed under the Employment Standards Act in order to continue their operations legally. The new licensing process will require agencies to provide a letter of credit for $25,000, which can be used by the Director of Employment Standards to pay outstanding (unpaid) wages to employees. The licensing process will also require agencies to give information about certain criminal offences of some members of their agency, and information about their agency’s compliance with various employment statutes, such as the Employment Standards Act and the Employment Protection for Foreign Nationals Act. Violations of these new licensing laws will be penalized heavily, with repeat violations costing up to $50,000.
Furthermore, starting January 1, 2024, anyone who wants to act as a recruiter must have a license to do so. A “recruiter,” generally, is any person who finds employment for prospective employees, or employees for prospective employers, for a fee. There are several exceptions to this definition, which can be found here. The recruiter licensing process includes having the individual acknowledge that they cannot charge a foreign national worker a fee for their services. Any recruiter who contravenes this rule and charges a foreign national worker a fee may have their license suspended or revoked.
How Do the New Laws Impact Employers of Temporary Employees?
The Employment Standards Act states that beginning on January 1, 2024, companies or individuals who want to hire temporary employees cannot knowingly engage or use the services of a THA unless the person who operates the THA has a license to operate a THA.
However, it is unlikely that employers who turn a blind eye to the unlicensed statuses of THAs will be absolved of liability. The penalty of knowingly working with an unlicensed THA for employers is $250 for the first worker impacted, and $500 and $1,000 respectively for the second and third worker impacted during a three-year period. Penalties for further contraventions of these new laws can be found here.
Employers who work with THAs or recruiters should protect themselves by doing their due diligence. This includes making sure any THAs or recruiters they work with are properly licensed under the Employment Standards Act and comply with all applicable laws relating to hiring temporary employees. To help employers ensure that they only work with licensed THAs, the Ontario Ministry of Labour, Immigration, Training and Skills Development will have an online database for employers to consult before deciding to work with a THA, to confirm that they have met the Province’s licensing requirements and are licensed to carry on business as THAs.
For more guidance on how your organization can ensure compliance with these new employment laws, please contact the employment litigation lawyers at Walker Law.