Ontario Recruitment License FAQ

Hiring agencies and recruiters in Ontario face new rules. Starting July 1, 2024, they must have a valid Ontario Recruitment License to operate. This page explains these rules and helps you understand the steps to comply.

Key Takeaways

• Starting July 1, 2024, all Ontario recruiters and temporary help agencies must have an Ontario Recruitment License. A $25,000 security deposit is required for agencies unless exempt.
• Applications sent before June 30, 2024, let businesses operate during review. Late submissions after July 1 need approval before starting operations.
• The license fee is $750 per application or renewal. Dual-role entities acting as both agency and recruiter need two licenses but pay only one fee if done together.
• Penalties for non-compliance include fines from $15,000 to $50,000. Operating without a license or working with unlicensed agencies is also punishable.
• Employers must hire only licensed recruiters or agencies after July 1, 2024. Verify their status using the Ministry’s public database to avoid legal risks.

Ontario Recruitment License FAQ

The Ontario Recruitment License is a must for specific businesses involved in recruitment. Learn who needs it, key rules, and timelines.

What is the Ontario Recruitment License?

The Ontario Recruitment License is a legal requirement for temporary help agencies and recruiters in Ontario. It ensures they meet specific rules under Bill 27, the Working for Workers Act, 2021.

Starting July 1, 2024, all agencies and recruiters must have this license to operate. A $25,000 security deposit is required during the application process. Those applying before June 30, 2024, can keep working while their application is reviewed.

Failure to comply can lead to fines from $15,000 to $50,000.

Who Must Obtain a Recruitment License?

Recruiters in Ontario must have a license starting July 1, 2024. This applies to individuals, corporations, partnerships, and sole proprietorships who charge fees for recruitment services.

Recruiters outside Ontario also need a license if hiring for jobs within the province. Exempt groups include employees recruiting as part of their regular job duties, schools, trade unions, charities, government agreement parties, and those helping people with developmental disabilities.

Are Temporary Help Agencies and Recruiters Both Covered?

Temporary help agencies and recruiters must have a valid Ontario Recruitment License by July 1, 2024. This rule applies if they assign employees to work in Ontario, even if the agency or recruiter is based outside the province.

Employers cannot work with unlicensed agencies or recruiters. Violations, like charging illegal recruitment fees, can lead to losing the license. Educational institutions and registered charities are exempt from this licensing rule.

The Ministry of Labor offers a public database to check license status.

When Did the Licensing Requirement Begin?

Licensing requirements under Ontario’s Bill 27 start on July 1, 2024. Agencies and recruiters must submit applications by June 30, 2024, to operate during the transitional period.

From July 1, 2024, operating without a license will lead to penalties. Applications sent after this date need approval before starting operations. The Ministry of Labor manages public verification for licenses.

Legal Entities Requiring Separate Licenses

Some businesses need separate licenses to meet Ontario’s recruitment rules. See if this applies to you.

Entities Operating as Both Agency and Recruiter

Businesses acting as both a temporary help agency and a recruiter must get two separate licenses. Each function, agency and recruiter, requires its own application under ESA rules.

The fee for each license is $750. If applied together or within the same period, only one fee is needed. A $25,000 security deposit for each license applies unless exempt. Starting July 1, 2024, all entities must meet these requirements to stay compliant.

Failure can lead to fines and orders by authorities under employment standards law.

Agencies and Recruiters Located Outside Ontario

Licensing rules cover agencies and recruiters outside Ontario if they assign or recruit workers for Ontario jobs. These businesses must have a valid Ontario license starting July 1, 2024.

Out-of-province entities follow the same rules as Ontario-based ones. They must pay application fees and provide security deposits. They must also notify clients and workers within 30 days if their license is refused, suspended, or revoked.

Penalties apply equally for violations.

Key Licensing Requirements

Understand the key documents, fees, and security needed to get licensed—click to learn the details.

Required Application Documentation

Applicants must provide specific details to complete the application. The process is fully online and requires accurate information.

1. Include all contact details such as names, phone numbers, and emails.
2. Provide addresses for the business, both inside and outside Canada.
3. Share information about the legal entity, such as its structure.
4. Corporations must list corporate officers or directors. Partnerships must name all partners.
5. Include employment history for the business and other licenses held in other areas.
6. State if recruiting foreign workers and mention wage levels for these roles.
7. Get a tax compliance verification number from the Ontario Ministry of Finance.
8. Disclose any criminal history and compliance with related laws.
9. Submit an irrevocable letter of credit or a $25,000 surety bond as security.
10. Ensure all areas of the application are filled out correctly online.

Acceptable Forms of Security

Security is required to apply for a recruitment or agency license in Ontario. The requirements ensure compliance with the law.

1. Security must be irrevocable and allow partial draws. It should be in English or French.
2. Accepted forms include an electronic irrevocable letter of credit or a surety bond.
3. Surety bonds must come from insurers licensed in Ontario for surety and fidelity insurance.
4. The $25,000 security is needed for Temporary Help Agency licenses.
5. Recruiters need security only if hiring foreign workers for jobs below the median hourly wage.
6. Applications cannot proceed without meeting the security requirements.
7. The Director of Employment Standards holds the security. It is used only under specific conditions.

Application Fees

The application fee is $750. This applies to both new and renewal applications. Entities applying for both agency and recruiter licenses at the same time only pay one $750 fee. Payment must be made online during the application process.

Application fees cannot be refunded. If you fail to pay, your application will be rejected. The Ministry of Labor enforces this fee under ESA rules. No extra payment is needed for renewals if already paid in the same period for another license.

Security Requirements Explained

A $25,000 security is required for all Temporary Help Agency license applications. Recruiters only need to provide security if they recruit foreign nationals for jobs paying less than Ontario’s median hourly wage.

Security can be an electronic irrevocable letter of credit or a surety bond. It must be submitted before the license is issued or renewed. A held $25,000 security covers renewals unless complaints exist.

Security may cover unpaid wages, fees, or compensation orders and could return 12 months after a license expires or cancels if no complaints exist.

Understanding the Application Process

The application process is straightforward but requires attention to detail. Ensure all required information is accurate to avoid delays.

Applying Online: Step-by-Step

The process to apply for an Ontario Recruitment License is fully online. Follow these steps to complete the application quickly.

1. Create an account on the Ministry’s online licensing portal.
2. Gather all necessary documents before starting. This will save time.
3. Prepare to pay the $750 application fee online.
4. If required, have the $25,000 security deposit ready to submit.
5. Start your application and fill in all requested details.
6. Save your progress if needed. You can return within 14 days to complete it.
7. Submit your application once all sections are filled and payment is made.
8. Check your application status on the portal regularly after submission.
9. Respond promptly if the Ministry requests more details to review your application.

Information Needed for the Application

Applicants must provide clear and truthful information. Failing to do so can lead to serious penalties.

• State the legal name and address of all business locations.
• Provide business registration details, like incorporation or partnership papers.
• Include compliance history with employment and recruitment laws.
• Disclose recruitment activities for foreign nationals, such as wage details.
• Declare if any similar license was ever denied, revoked, or suspended.
• Report any criminal convictions related to recruitment or employment.
• Submit operational details, including employee numbers and areas served.
• Ensure all data is accurate and complete to avoid fines.

Transitional Rules and Important Dates

Rules have changed for applying before and after July 1, 2024. Specific dates impact how applications are handled.

Applications Submitted Before July 1, 2024

Applications submitted before July 1, 2024, allow agencies and recruiters to operate while waiting for a licensing decision. Each legal entity must submit a complete and accurate application by this deadline to qualify for this transitional rule.

A $25,000 security deposit must be included unless exempt. The Ministry updates the status of applications on its public website. Licenses issued during this period will remain valid for one year from the date issued.

Violating licensing rules may result in penalties or compliance orders.

Applications Submitted On or After July 1, 2024

Starting operations without a license after July 1, 2024, is not allowed. All applications must be approved before any business activities begin.

Include the $25,000 security deposit with your application unless you qualify for an exemption. Dual-role businesses, acting as both agency and recruiter, need two separate licenses.

Delayed submissions have no transitional rights and may face fines from $15,000 to $50,000. The Ministry will enforce rules immediately and add applicants to a public database.

All materials must be submitted online for approval.

License Duration and Renewal

Licenses have a set validity period and need renewal before they expire. Missing the renewal deadline may lead to penalties or disruptions in operations.

Validity Period of License

A license stays valid for one year from the issue or renewal date. Each entity must renew yearly to keep operating legally.

Renew before expiry to avoid disruption. The Ministry sends reminders 90 and 30 days before expiration. A warning flag appears on the portal 90 days prior. Missing the deadline stops agencies and recruiters from running their business.

Renewal costs $750 every year per license.

Renewal Application Process

Renewing your recruitment license is essential to keep operating without interruptions. The process is simple and must follow specific rules.

1. Submit your renewal application before the license expires.
2. Pay the $750 renewal fee, unless you qualify as a dual-license holder.
3. Update all application details to ensure accuracy.
4. Renewal applications follow the same steps as the initial application.
5. If submitted before expiration, you can keep operating while the ministry reviews your renewal.
6. You will not need to provide new security if the Director already holds the $25,000 security.
7. The ministry sends a final reminder email 30 days before your license expires.
8. Failing to renew on time will result in lost operational privileges.

Submitting Renewals Before Expiry

Submit renewal applications before the license expiration date to keep operations running. If submitted on time, you can continue working until the Ministry makes a decision.

Renewal reminders come 90 days and 30 days before expiry through the online portal. The fee is $750 unless exceptions apply for dual-licensed entities. All documents must be updated and meet application criteria to avoid delays or denials.

If your license lapses due to missed deadlines, operations must stop immediately.

Refused, Revoked, or Suspended Licenses

Learn what can lead to a refused, revoked, or suspended license. How it impacts your business.

Reasons for License Refusal or Revocation

Licenses can be refused or revoked for many reasons. These issues often relate to compliance, violations, or criminal behavior.

1. Non-compliance with Employment Standards Act orders can lead to refusal or revocation.
2. Violating the Employment Protection for Foreign Nationals Act is a serious issue.
3. Charging illegal recruitment fees can result in penalties.
4. Keeping workers’ passports without permission can cause license refusal.
5. Convictions for human trafficking or kidnapping are disqualifying factors.
6. Failing to register with the Workplace Safety Insurance Board is prohibited.
7. Providing false or misleading information on the application is grounds for denial.
8. Unpaid taxes or tax non-compliance can lead to license denial.
9. Past criminal offenses under the Criminal Code or Immigration and Refugee Protection Act are reviewed.

60-Day Compliance Window

Applicants receive 60 days to fix any issues after a notice of refusal, revocation, or suspension. During this time, they must submit written proof of compliance to avoid final action.

This window does not apply to certain criminal convictions. Applicants can choose to waive the period by providing written notice. If no action is taken within the 60 days, rejection or cancellation becomes effective.

The Ministry explains all decisions in writing and will review compliance evidence if provided in time.

Impact of Refusal or Revocation

Licenses that are refused, revoked, or suspended have serious effects. Employers must stop operations immediately if refusal or revocation becomes final. Employees and clients affected must be notified within 30 days.

Violating these rules leads to enforcement actions or fines of at least $15,000 for false details.

Employee rights stay protected even during license issues. Employment contracts are not canceled due to licensing problems. Agencies without a valid license cannot operate legally.

The Ministry watches closely and investigates violations to ensure compliance with the law.

Voluntary License Cancellation

License holders can cancel their license by writing to the Director. The cancellation takes effect only after the Director approves it.

All rights and duties under the ESA remain until the process is final. Clients and workers must get a notice of cancellation within 30 days. Outstanding liabilities or enforcement actions do not go away even after cancellation.

Security deposits may be returned based on standard rules, and public records will update once canceled. A two-year ban applies for re-applying if relevant.

Two-Year Ban on Re-Application

Applicants face a two-year ban if their license is refused or revoked. This applies to both new and renewal applications across Ontario under the ESA rules. The Ministry sends written notifications about the ban, which it records in a public database.

The ban can be lifted if strong new evidence satisfies the Director. Voluntary cancellations do not trigger this unless following a refusal or revocation. Appeals must go to the Ontario Labor Relations Board within 30 days of notification.

Use and Release of Security

Learn when and why security might be used or released. Know your rights and obligations.

Circumstances for Using Security

Security protects workers and ensures compliance. The Director of Employment Standards uses it only for valid orders or judgments. This can include unpaid wages, fees, or compensation under the ESA and EPFNA.

The $25,000 security may also enforce recruitment fee rules. If no claims exist within 12 months after a license expires or is canceled, the security is returned. Complaints delay this process by up to a year after the final decision.

All usage must be reported to the affected licensee.

Changes to License or Entity Status

Report any changes in business structure, address, or ownership to the Ministry right away. Update details through the online portal to stay compliant.

Material changes that affect license eligibility or security must be disclosed quickly. The Director may reassess your license or security needs after these updates. Not reporting changes can lead to suspension or revocation of your license.

Users of Temporary Help Agencies and Recruiters

Check if the agency or recruiter has a valid license. How to protect your business.

How to Verify License Status

The Ministry offers a public database for checking the license status of agencies and recruiters. Employers can search by name or license number to confirm if they are authorized. The system shows current statuses, pending applications, and revoked licenses.

Use the official Ministry website with cookies enabled for proper access. Data updates in real time, helping employers stay compliant before hiring any agency or recruiter.

Legal Obligations for Employers

Employers cannot hire unlicensed temporary help agencies or recruiters starting July 1, 2024. Fines for breaking this rule range from $15,000 to $50,000. Employers must check if agencies or recruiters have proper licenses.

Keeping proof of licenses is required for compliance with Bill 27 and the ESA. Using licensed services helps protect workplaces and avoids legal risks.

Ignoring these rules can hurt a company’s reputation and lead to legal action. The Ministry closely watches hiring practices to enforce these laws. Employers must change their processes to meet these new rules.

Hiring licensed agencies also ensures fairness and safety for workers.

Penalties for Non-Compliance

Non-compliance can lead to serious fines or penalties. What risks to avoid.

Types of Penalties and Consequences

Violating recruitment license rules has serious penalties. Fines, legal actions, and other consequences can follow non-compliance.

1. Fines for false or misleading information start at $15,000 for the first violation. They can go up to $50,000 for the third violation within three years.
2. Operating without a license after July 1, 2024, or working with unlicensed agencies has the same penalties as providing false information.
3. Compliance orders may force businesses to fix violations immediately.
4. Monetary penalties are used to ensure rules are followed.
5. License revocation or suspension can stop operations. A 60-day period is given to fix issues if a license is revoked or suspended.
6. Temporary help agencies refused a license before July 1, 2024, can operate for 30 days post-notice.
7. Legal prosecution can result in further consequences for not following licensing rules.

Exceptions and Exemptions

Some businesses do not need a recruitment license. Specific roles and industries may also be exempt. Check the details to ensure compliance.

Exempt Entities and Business Types

Some businesses and entities do not need an Ontario Recruitment License. Rules apply based on their activities or services.

1. Educational institutions do not need a license to recruit for their internal work.
2. Employers hiring workers directly for their own business are exempt.
3. Trade unions recruiting for collective agreements are not covered.
4. Registered charities are excluded from licensing requirements.
5. Individuals helping those with developmental disabilities are exempt when supporting these efforts.
6. Foreign governments and international organizations do not need a license for their recruitment activities.
7. Business or IT consultants may avoid licensing if they meet specific conditions.
8. Temporary help agencies outside Ontario must hold a valid license to operate in the province.
9. Agencies or employers not recruiting foreign nationals or hiring workers above the median hourly wage may skip the security deposit.

Business and IT Consultants Exception

Business and IT consultants are exempt from needing a license under the Employment Standards Act (ESA) if they meet certain conditions. Temporary help agencies only employing these consultants do not require a license either.

This exemption does not apply to recruiters, who must still follow licensing rules. Starting July 1, 2024, clients cannot use unlicensed agencies even if they claim this exception.

Agencies with other employees outside this exemption must get licensed. Licensing status is public on the ministry’s website for verification purposes.

Appealing Licensing Decisions

You can challenge decisions about your license through an appeal process. Follow the outlined steps to present your case effectively.

Process for Appeals to Director Decisions

Applicants may appeal if their license application is refused. The Ontario Labour Relations Board handles such appeals.

1. A written notice will explain the refusal and reasons for the decision.
2. Applicants have 30 days to file an appeal after receiving the notice.
3. If refused, those who applied before July 1, 2024, can still operate for 30 days while waiting for the appeal review.
4. Appeals must comply with the rules set by the Ontario Labour Relations Board.
5. The Director of Employment Standards can refuse licenses based on non-compliance with orders or requirements.

Support and Legal Guidance

Professional help can simplify the licensing process. Legal experts can ensure compliance and address concerns.

Resources for Compliance and Application

You need the right resources to meet licensing rules in Ontario. This ensures your agency or recruitment work is legal and follows the law.

1. Review the Employment Standards Act, 2000 (ESA), for rules about the license starting July 1, 2024.
2. Pay the CAD 750 application fee for new or renewal licenses.
3. Provide CAD 25,000 as security. Use a letter of credit or surety bond.
4. Use online systems to submit license applications and required forms.
5. Verify median hourly wages through Statistics Canada for offered jobs.
6. Check your documents. Ensure all details and security proof are correct.
7. Confirm all applications meet July 1, 2024, deadlines. Penalties apply for delays.
8. Avoid hiring unlicensed agencies or recruiters to prevent legal risks.
9. Follow updates from trusted legal services for further guidance.

How Hadri Law Professional Corporation Can Help

Our firm provides legal advice on recruitment licensing in Ontario. They guide agencies and recruiters through the application process, including required documents, fees, and security deposits.

We help clients meet compliance rules under the Employment Standards Act starting July 1, 2024. Support includes handling compliance checks and appealing license refusals to the Ontario Labor Relations Board.

Conclusion

Understanding the Ontario Recruitment License rules is key for agencies and employers. These rules protect workers and ensure fair business practices. Hadri Law Professional Corporation can help you stay compliant and avoid penalties. Reach out to us for trusted legal guidance. Stay ahead by following the requirements.

Reach out to Hadri Law for a no-cost consultation to explore your business legal needs. Call 437-974-2374 or send an email to contact@hadrilaw.com to get started.