Starting a staffing agency in Ontario? You need a licence first

Staffing is a popular business to start in Ontario, but it is also a regulated one. Since January 1, 2024, temporary help agencies and recruiters operating in Ontario must hold a licence under the Employment Standards Act.

Who needs a licence

• Temporary help agencies: businesses that employ people and assign them to work on a temporary basis for clients.
• Recruiters: anyone who, for a fee, finds or tries to find jobs for workers or workers for employers in Ontario.

A business that does both needs two separate licences. The rules also apply to agencies located outside Ontario that place workers here.

What the licence involves

• An application to the Ministry for each legal entity
• An irrevocable letter of credit of $25,000, which can be used to repay wages owed to employees
• Ongoing compliance with employment standards

Why it matters for your clients

Businesses that knowingly use an unlicensed agency or recruiter can face penalties, and the government keeps a public list of licensed businesses. Clients will check.

Plan ahead

Arrange the letter of credit with your bank early, incorporate first if you plan to operate through a corporation, and have payroll and WSIB ready before your first placement.

We help staffing agencies incorporate, apply for their licences and run payroll. See our business licensing service.