Recruiters in Canada’s largest province are now required to get government licenses before they can hire staff – and if they aren’t, companies working with them could be on the hook.


Since July 1, all recruiters and temporary help agencies operating in Ontario need to be approved by the Ministry of Labour, Immigration, Training and Skills Development. If they aren’t, and continue to operate, they could face fines as high as $50,000 for repeated violations.

“You want to make sure that you’re working with a reputable agency,” says Tanya Cerniuk, country head of Adecco Canada and national board member of the Association of Canadian Search, Employment & Staffing Services. “The licensing absolutely gives you that extra level of assurance that they’re compliant with all regulations.”

These new rules are well-known in the recruiting and temporary help agency world, where they’ve been seen as everything from a cash grab by the provincial government to a way for Ontario’s recruiting and temporary help agency sector to improve its reputation.

Here’s what the new rules mean for companies who depend on recruiters and temporary help agencies – and how HR managers can ensure they stay on the right side of the law.

What exactly are the new rules?

According to the Ministry’s website, any recruiter or temporary help agency applying for a license needs to provide contact information, corporate or partnership information, and whether applicants are recruiting foreign workers. Applicants also need to list details on whether they’ve fallen afoul of the Employment Standards Act, Occupational Health and Safety Act, the Workplace Safety and Insurance Act, or the Employment Protection for Foreign Nationals Act.

There are two different licenses: one for recruiters, and one for temporary help agencies. Applicants to either one must pay a $750 fee, but the latter is also required to provide a $25,000 security, through a letter of credit or surety bond. (Recruiters are not required to put up a security if they are not recruiting foreign nationals, or only do so for positions that pay above Ontario’s median wage of around $28 per hour).

Once the Ministry approves a recruiter or temporary help agency’s license, it’ll be valid for one year. Applicants that are refused a license can file a review with the Ontario Labour Relations Board.

To the provincial government, the new licensing system is a way to protect workers. “This is what gives our industry a bad name, for temporary help agencies as well as recruiters, because they can be taken advantage of in any number of ways,” Cerniuk says.

Not all recruiters agree. Jason Noble, CEO of Noble Search Group, says the provincial government decided to regulate the profession after reports of temporary foreign workers being exploited by agencies. He says the new rules were created without consulting most Ontario recruiters or temporary help agencies, and the original rules would have required all recruiters to pay a $25,000 security deposit – a lot of money for small businesses.

“Generally, we feel this is a cash grab by the government,” Noble says.

How do these new rules affect Ontario employers?

The new rules bind employers who use recruiters or temporary help agencies, too. According to the Ministry’s website, employers – as well as prospective employers and other recruiters – are prohibited from “knowingly engaging or using the services of any recruiter that does not hold a license.”

Employment standards officers are responsible for investigating violations, and the penalties are steep for employers who get caught. For a first violation, an employer can be fined $15,000. A second violation within three years earns a $25,000 fine. The next fine after that is $50,000.

Tips on complying with the new rules

First, Noble says, companies looking to hire recruiters should check on the Ontario government’s website to ensure they’re hiring someone with the proper license. It’s the only way to know for sure that a recruiter or temporary help agency is formally licensed with the Ministry.

But he also suggests HR departments do their own due diligence. Just like checking a prospective candidate’s resume, HR managers shouldn’t just accept the Ontario government’s word that a recruiter or temporary help agency is honest.

“If you’re hiring a construction company, you’re going to do reference checks,” Noble says. “Do the same thing with recruiters. Talk to people in your network. Get reference checks. Talk to as many people as you can, so that you feel comfortable that someone you’re working with is legit.”

All in all, Noble says most recruiters are honest and upstanding business owners who aren’t in the industry to exploit their clients, or the workers they hire or staff. “These are the recruiters that companies tend to work with,” he says. “But you still have to do your due diligence.”  





Enter some text...

Did you find this article useful?