In an effort to safeguard temporary and vulnerable workers, as of 1 July 2024, temporary work agencies and recruiters must obtain a license to deploy staff for work within the Canadian province of Ontario.

An amended employment standards act prohibits clients from engaging unlicensed services and businesses are required to submit a C$750 (US$560) application fee alongside a C$25,000 (US$18,700) letter of credit (L/C) to potentially cover outstanding wages owed to employees.

No exceptions

Each initial application must be accompanied by an electronic irrevocable L/C that meets specific requirements. There are no exceptions, according to a notice issued by Ontario's director of employment standards. No other type of financial security is accepted.

Applicants can provide an electronic version of a paper-based L/C, for example by uploading a PDF version of an irrevocable L/C that is printed on paper into the online application system.

Acceptability

To be acceptable, the L/C must include a statement that it is being provided for the obligations of the applicant under relevant employment law.

The L/C should automatically renew when it expires except when it includes a statement that it will not automatically renew when it expires if the bank provides notice to the director of employment standards, but only if the amount of notice specified is 90 days or more.

The L/C should also permit partial drawings without any conditions, meaning that the director of employment standards can, for reasons set out in the regulation and in accordance with the prescribed processes, demand and receive a payment less than the entire amount specified in the L/C.

Full details on Ontario's Licensing for temporary help agencies and recruiters, can be found here.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.