Ontario to require licensing of Temporary Help Agencies

Ontario to require licensing of Temporary Help Agencies

Promises toughest penalties in Canada for agencies and recruiters who exploit workers

The Ontario government announced it will  require temporary help agencies (THAs) and recruiters to have a licence to operate in the province as of January 1, 2024, for the purpose of protecting vulnerable and temporary foreign workers.

A press announcement issued last July 5  by the Ministry of Labour, Immigration, Training and Skills Development said that investigations by its inspection officers have shown that multiple temporary help agencies in Ontario are illegally paying workers below the minimum wage and denying other basic employment rights to gain an unfair competitive advantage over law-abiding agencies by undercutting rates.

“While temporary help agencies are vital to Ontario’s businesses and jobseekers looking to get their foot in the door, for too long they have operated in a grey zone that allows criminals to prey on vulnerable workers,” said Monte McNaughton, Minister of Labour, Immigration, Training and Skills Development.

“Our government’s licensing system will ensure law-abiding businesses can have confidence in the THAs 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.”

The official press announcement stated that many businesses and jobseekers in Ontario are often unaware if an agency or recruiter they are working with is meeting their employment standards obligations or has a history of violations.

With the licensing requirement, these businesses will now be able to check the ministry’s online database before working with one, to see if they have met the province’s stringent licensing requirements.

“It will be against the law for companies to knowingly use unlicensed businesses for staffing, and those who hire deceitful recruiters will be required to repay workers for any illegal fees charged to them,” the statement said.

To operate their businesses, THAs and recruiters will need to provide $25,000 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 $50,000 penalty based on repeat violations – the highest amount in Canada.

In 2022, the government launched a task force to work with law enforcement agencies and community partners to detect and address illegal practices and recover unpaid wages for exploited employees.

This initiative has resulted in multiple investigations that had helped remove hundreds of vulnerable and migrant workers from hazardous working situations.

In a related development, Ontario also recently introduced legislation to strengthen pernalties for withholding worker passports by recruiters.

• There were approximately 2,300 placement agencies and temporary help business locations operating in Ontario in December 2022, according to Statistics Canada.

• There were about 114,000 full-time employees employed by temporary help agencies in 2022.

• In 2020-21, ministry inspections on THA use in farms, food processing, storage and warehousing and retirement homes found $4.2 million was owed to more than 10,000 employees.

Commenting on the licensing requirement of THA’s,  Julia Drydyk

Executive Director, The Canadian Centre to End Human Traffickingsays:

“The Canadian Centre to End Human Trafficking supports Ontario’s efforts to bring greater accountability to the recruitment industry. The new registry will help instill transparency and ensure the government has more information to protect foreign nationals from fraudulent recruiters. This initiative is one of many important steps that we need to take to combat labour trafficking and abusive labour practices in this province.”