Temporary help agencies (THAs) and recruiters will need to be licensed in Ontario as of Jan. 1, in a bid to crack down on agencies that pay below minimum wage and deny other employment rights.

Licence holders will be recorded in a provincial database, and it will be illegal for companies to knowingly use unlicensed businesses for staffing. Those who hire “deceitful recruiters” will also have to repay workers for any illegally charged fees.

The annual licences will be issued to those who provide $25,000 in the form of an irrevocable letter of credit that can be used to repay outstanding wages, while repeat offenders could face $50,000 penalties – something the province says in the highest amount in Canada.

“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,” Monte McNaughton, minister of labour, immigration, training and skills development, said in a statement.

“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.”

OTA applauds the plan

Ontario had 2,300 placement agencies and temporary help businesses in December 2022, according to Statistics Canada.

THAs and recruiters that apply for a licence before Jan. 1 will be allowed to continue operating until the ministry issues a decision on the application. If a licence or renewal is refused, applicants will have 30 days to cease operations.

A provincial task force launched in 2022 led to multiple investigations that helped hundreds of vulnerable and migrant workers escape hazardous situations, the ministry adds.

The Ontario Trucking Association (OTA) applauded the approach.

“We applaud the Government of Ontario for today’s announcement to protect vulnerable and temporary foreign workers from unscrupulous companies who sidestep their essential responsibilities by exploiting workers and denying them their labour rights,” OTA director – policy and public affairs Jonathan Blackham said in statement.

“This announcement is another important step toward achieving our common goals of protecting workers and ensuring companies are competing on a level playing field.”