The province of Ontario’s government approved a new law that requires recruiters and temporary staffing firms to be licensed and prohibits client companies from knowingly using unlicensed providers.

The “Working for Workers Act, 2021” was passed by the Ontario government on Nov. 30, and the legislation received final approval on Dec. 2.

“We are protecting workers’ rights, while positioning Ontario as the top destination for global talent and investment,” said Monte McNaughton, minister of labor, training and skills development, in a statement when the legislation passed.

The system for licensing of staffing firms and recruiters will come into force on a date to be set by Ontario’s lieutenant governor, but the license requirement could come into effect as early as 2024, according to the “North America Legal Update Q4 2021” released by Fiona Coombe, director, legal and regulatory research, at Staffing Industry Analysts.

Besides licensing, the new law contains several other provisions such as requiring companies to develop policies to allow employees to disconnect from work and banning noncompete agreements. However, the biggest impact on staffing is the licensing.

“By far, the licensing is a huge step forward in protecting workers because there’s also going to be language that puts the clients at risk of fines if they are doing business with agencies that are not licensed and regulated,” said Jeff Nugent, a longtime staffing industry executive and board member of the Association of Canadian Search, Employment and Staffing Services.

Nugent also chairs ACSESS’ education and certification committee.

The update to Ontario’s Employment Standards Act, deemed the “Working for Workers Act,” came forward over concerns that some staffing providers weren’t acting ethically, particularly in the case of foreign workers, some of whom didn’t have proper work visas and weren’t working in healthy conditions. Nugent says licensing will help ensure all are acting ethically.

It’s also likely the government will lean on ACSESS as part of the licensing process. The organization already has a certification program in place for its members and has been part of the legislative consultation process for some time.

And while there has been some concern raised about whether the licensing process will result in more costs being passed along to client companies, Nugent said he doesn’t see that as a major issue. While some countries — for example, Italy, which requires a sizeable bond in order to obtain a staffing license — have more costly licensing, he doesn’t expect Ontario’s licensing costs for staffing firms to be burdensome. For buyers, the potential fines represent the biggest concern.

Still, ACSESS backs the legislation.

“ACSESS strongly endorses the establishment of a licensing regime ensuring that all temporary help agencies comply with their legal obligations,” said Mary McIninch, executive director, government relations at ACSESS, in a statement released when the legislation was first introduced.

“This initiative creates a level playing field and results in a fairer industry for [temporary help agencies], their clients and assignment employees alike,” McIninch continued. “We applaud the government for taking a bold approach that includes enforcement initiatives against [temporary help agencies] that operate illegally and the client companies that use them.”

The Ontario Ministry of Labor, Training and Skills Development reported prior to passage of the legislation that multiple temporary staffing firms in the province were illegally paying people below the minimum wage and denying basic employment rights. As a result, they had an unfair advantage over firms that played by the rules.

“We are glad to see government take this important step to protect workers and to support businesses striving to provide safe and positive work experiences. Having this legislation in place will help ensure we engage with licensed agencies that align with our standard of employee care,” said James Henry, VP, hospitality, for Blue Mountain Resort in a statement that was included with information released by the ministry.

In addition to licensing for temporary staffing firms, other aspects of the legislation include:

  • Prohibits use of recruiters who charge foreign nationals a fee.
  • Requires employers with 25 or more employees to have a written policy about employees disconnecting from their job at the end of the workday.
  • Bans the use of noncompete agreements that prevent people from exploring other work opportunities.
  • Removes barriers, such as Canadian experience requirements, for internationally trained individuals to get licensed in a regulated profession and get access to jobs that match their qualifications and skills.
  • Requires business owners to allow delivery workers to use a company’s restroom if they are delivering or picking up items.