New Ontario Recruitment License Requirement: What You Need to Know

Starting from July 1st, 2024, Ontario will enforce a new requirement for recruiters to hold a license under the Employment Standards Act (ESA). This change aims to regulate the recruitment industry and ensure fair practices. This is in addition to temporary help agencies who also require a license to conduct business in Ontario. For more information on temporary help agencies, please refer to the province’s guidance.  

As an Employer of Record in Canada, we keep our finger on the pulse of the recruitment landscape. Here's a detailed guide to help you understand what this new requirement means and how it affects recruitment agencies operating in the province of Ontario. 

What Does the New Ontario Recruitment License Mean? 

The new regulation mandates that anyone acting as a ‘recruiter’ must obtain a license to operate in Ontario. A ‘recruiter’ is defined as any person – which includes a corporation, partnership, and individual/sole proprietorship – who, for a fee, finds or attempts to find employment, on a temporary or permanent basis, in Ontario for prospective employees, or finds, or attempts to find, employees to be employed on a temporary or permanent basis for prospective employers in Ontario.  

Who Needs a License? 

Any legal entity that operates as a temporary help agency or is engaged in recruitment activities for a fee must be licensed. This includes: 

  • Individuals 

  • Corporations 

  • Partnerships 

  • Sole proprietorships 

However, there are specific exemptions. This includes employees who perform recruitment functions as part of their job duties for their employer do not need a license. We have included two examples below where this exemption comes into play, courtesy of the Ontario Ministry of Labour Temporary Help Agency & Recruiter Licensing Unit. 

 

 Example 1

Chris is an employee of a recruiting company. In his job, he finds, or attempts to find, employees for prospective employers in Ontario. He is excluded from the definition of recruiter and is not required to have a license. (His employer is required to have a license, however.) 

 

 Example 2

Sarah is an employee in the human resources department of a manufacturing company. As part of her job, she finds or attempts to find employees for her employer. She is excluded from the definition of recruiter and is not required to have a license. 

Click here for a more detailed overview of the license requirement’s exemptions. 

When Does the Ontario Recruitment License Requirement Come into Effect? 

The license requirement comes into effect on July 1, 2024. From this date, recruiters must hold a valid license to legally operate in Ontario.  

If an application was submitted before July 1, 2024 and has not received a decision from the ministry by July 1, 2024, the applicant is allowed to continue to operate as a temporary help agency or act as a recruiter on and after July 1, 2024. This applies until the ministry notifies the applicant either that a license has been issued or that the application for a license has been refused. 

 

If an application was submitted on or after July 1, 2024, the applicant is prohibited from operating as a temporary help agency or acting as a recruiter unless and until the ministry issues a license.  

Do Recruiters Need a License if they are not Physically in Ontario? 

Yes, even if the recruiters are not physically located in Ontario, they will need a license if recruiting for positions in Ontario. The licensing requirement applies to any recruiter operating in Ontario, regardless of their physical location. 

Ontario Recruitment License Application Requirements 

To apply for a recruiter license, the following information may need to be provided:  

  • Contact information for individuals who can be contacted by the ministry 

  • Business addresses inside and outside of Canada 

  • Names and addresses of corporate officers, directors, or partners if applicable 

  • Information about the applicant, corporate officers and directors, partners, and similar applications and licenses in other Canadian jurisdictions 

  • Whether the applicant will act as a recruiter in respect of foreign nationals (individuals who are not Canadian citizens or permanent residents) during the term of the license, and if so, whether the recruitment is only in respect of positions with wages at or above the median hourly wage* 

  • Information about compliance with various employment laws 

  • Information about certain criminal convictions 

  • Information about other legal services the applicant engages within the recruitment of foreign nationals 

  • Tax compliance verification number from the Ontario Ministry of Finance 

  • Security in the amount of $25,000 in certain cases, dependent on the type of work the recruiter will engage in during the term of the license. 

*Median hourly wage means, on the date the application is submitted, the median hourly wage for Ontario published on a Government of Canada website. The median hourly wage for Ontario on April 2, 2024, is $28.39 per hour. Recruiter applicants should visit the Government of Canada's website to see the current median hourly wage for Ontario. 

How Much Does the Ontario Recruitment License Cost? 

The application fee for a recruiter license is $750. This fee is required for both initial applications and annual renewals. If a legal entity operates both as a temporary help agency and as a recruiter, it needs to submit two separate applications but only pay the $750 fee once if submitted within specific timeframes. 

Operating in Ontario Without a Recruitment License 

Operating as a recruiter without a license can result in significant penalties: 

  • $15,000 for the first contravention 

  • $25,000 for the second contravention within three years 

  • $50,000 for the third contravention within three years 

Employers, prospective employers, or other recruiters who knowingly engage unlicensed recruiters will also face these penalties. These parties have an active duty to verify the compliance of the recruiters they engage with. 

Need Help Operating in the Canadian Recruitment Market? 

The introduction of the recruiter license requirement in Ontario marks a significant change in the Canadian recruitment landscape. Recruiters must be prepared to comply with these new regulations by July 1, 2024, to avoid hefty fines and ensure smooth operation within Ontario's labour market.  

PGC offers an easy solution to payrolling workers in Canada. Book a call with one of our North American expansion experts to discuss how we can help your business access the Canadian recruitment market. 

Please be advised that PGC, as your Employer of Record, is obtaining the temporary help agency license. Nonetheless, there may be obligations for your company pursuant to the Employment Standards Agreement’s definitions and the Ontario Labour Relations Board’s interpretations of these definitions. Our best practice guidance would be to review the license requirements with your legal counsel to determine the licenses’ applicability to your company. 

Disclaimer: All information written here is for general informational purposes only and is not intended to be a substitute for professional and/or legal services.   

Francis McConville