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Ontario temp agency licensing: what employers must check before they sign
Since July 2024, Ontario businesses can be fined $15,000 for knowingly using an unlicensed temp agency. How to verify a licence and limit your risk.
Most conversations about choosing a staffing agency start with price. In Ontario, they should start with a licence number.
Since 1 July 2024, temporary help agencies and recruiters must hold a licence under the Employment Standards Act — and the law puts an obligation on you, the client, as well as on them.
What changed
Ontario now requires any business acting as a temporary help agency or a recruiter to hold a valid licence issued by the Director of Employment Standards. To get one, an agency has to post $25,000 in security — an irrevocable letter of credit or a surety bond — which exists to cover unpaid wages owed to workers.
Every licence and its current status is listed on a public government page. Anyone can search it in about a minute.
What it means for you as the client
This is the part employers miss: the law prohibits a business from knowingly engaging or using the services of an unlicensed temporary help agency, and from knowingly using an unlicensed recruiter.
Penalties for contravening escalate:
| Contravention | Penalty |
|---|---|
| First | $15,000 |
| Second within three years | $25,000 |
| Third within three years | $50,000 |
Those are penalties issued by employment standards officers through a notice of contravention. They apply to the client business, not only to the agency.
The bigger exposure: joint liability for wages
Separately from licensing, the ESA makes a client jointly and severally liable with the agency for unpaid regular wages, overtime pay and public holiday pay for the hours assignment employees worked at that client’s site.
Joint and several liability
If your staffing supplier does not pay the crew, the liability can come back to you — even though you already paid the agency’s invoice.
Employer of the assignment employee
Regular wages · overtime pay · public holiday pay
For hours worked at your site
Read that again, because it is the practical risk. If your staffing supplier runs into trouble and does not pay the crew that worked in your warehouse, that liability can come back to you — even though you already paid the agency’s invoice.
This is why a cheap rate from an unlicensed or thinly capitalised supplier is not a saving. It is an unpriced risk sitting on your balance sheet.
How to check a licence in two minutes
- Ask the agency for its legal business name and licence number — a licensed agency will have both on its agreements and invoices.
- Search the Ontario public licensing status page for the legal name, not the brand name. Many agencies operate under an operating name that differs from the licensee.
- Confirm the status reads as licensed, not suspended, revoked or expired.
- Check that the licence type matches what they are doing for you — temporary help agency, recruiter, or both.
- Save a screenshot with the date. If a question ever comes up, you want evidence of what you checked and when.
Do this at onboarding and again at renewal. A licence can be revoked mid-term.
Seven questions to ask a staffing supplier
- What is your legal name and licence number, and what is the licence status today?
- Do you pay workers weekly, and what is your payroll funding arrangement?
- Are your workers employees of your agency, or are they engaged as independent contractors?
- Who carries WSIB coverage for the people you place, and at what rate class?
- What ESA documents do you give assignment employees before they start?
- What is your conversion policy if we want to hire someone permanently?
- Can you provide proof of your WSIB clearance certificate on request?
A licensed, properly run agency answers all seven without hesitating. Hesitation on any of them is your answer.
What the licence does not do
A licence confirms the agency has met the requirements and posted security. It is a floor, not a guarantee of quality. It does not tell you whether the agency screens properly, pays on time, or replaces a no-show inside the hour.
Two related rules are worth knowing, because they signal how a supplier operates:
- An agency cannot charge a worker for becoming an employee, for being assigned work, or for resume and interview help. If your supplier’s workers mention paying for anything, that is a serious problem.
- Recruiters cannot charge prospective employees a fee for finding or attempting to find work for them, and additional protections apply to the recruitment of foreign nationals.
If any part of your workforce is recruited from outside Canada, check that the recruiter involved holds a recruiter licence as well — the obligation not to knowingly use an unlicensed recruiter sits with you too.
Using agencies outside Ontario
Licensing is provincial. An Ontario licence covers assignment employees working in Ontario; other provinces have their own rules, and some have none. If you staff multiple provinces, ask each supplier how they are registered in each jurisdiction where your people work, and confirm workers’ compensation coverage is in place province by province. A national supplier should be able to answer that in one email.
Red flags worth walking away from
- No licence number on the agreement or the invoice.
- Workers classified as independent contractors for work that is plainly employment — you inherit the misclassification risk.
- A bill rate that could not plausibly cover minimum wage plus statutory costs.
- Cash payments to workers, or workers who say they are paid irregularly.
- No written client services agreement at all.
What good looks like
Nova Staffing is licensed under Ontario’s Employment Standards Act as both a Temporary Help Agency and a Recruiter. Our licence appears on our public listing and our licence number is on our agreements and invoices. Our assignment employees are our employees: we pay them weekly, we carry WSIB coverage for them, and we issue their T4s.
That is not a marketing claim — it is something you can verify before you sign, and you should verify it for every supplier you use.
This article is general information, not legal advice. Confirm your own obligations with your employment counsel.
Frequently asked questions
Is Nova Staffing licensed as a temporary help agency in Ontario?
Yes. Nova Staffing is licensed under Ontario’s Employment Standards Act as both a Temporary Help Agency and a Recruiter. Our licence can be verified on the Ontario Ministry of Labour’s public licensing status page, and our licence number appears on our agreements and invoices.
Can our business be fined for using an unlicensed temp agency in Ontario?
Yes. Since 1 July 2024 it has been illegal for a business to knowingly use an unlicensed temporary help agency or recruiter in Ontario. Penalties for clients start at $15,000 for a first contravention and rise to $25,000 and $50,000 for further contraventions within three years.
Are we liable if the agency fails to pay its workers?
Under the ESA, a client is jointly and severally liable with the agency for unpaid regular wages, overtime pay and public holiday pay for hours the assignment employees worked for that client. Working with a licensed, bonded agency that pays weekly protects you from that exposure.
Who is the legal employer of the temporary workers on our site?
Nova Staffing is. We hire the worker, pay their wages, handle source deductions and remain their employer between assignments unless the employment is ended. You direct the day-to-day work and control the workplace; we carry the employment relationship and the ESA obligations that go with it.
Who is responsible for health and safety and for workplace injuries?
Health and safety is shared. As the workplace owner you provide site-specific hazard training, supervision and PPE and must report incidents. Nova provides general safety orientation, carries WSIB coverage for assignment employees, and manages claims and return-to-work with you.
Who is responsible for training a temporary employee on workplace procedures?
We deliver general orientation — WHMIS, workplace violence and harassment awareness, general safety conduct. Site-specific training on your equipment, your procedures and your emergency plan stays with you, as required under Ontario’s health and safety legislation.
What notice is required to end an assignment?
If an assignment was estimated to last three months or more and it ends early, the ESA requires the agency to give the assignment employee one week’s written notice, termination pay, or a combination. Give us as much advance notice as you can so we can redeploy the worker.