In Ontario, the Working for Workers Act, 2021 (also known as Bill 27) brought in major changes affecting recruiters and temporary help agencies (THAs).
Under amendments to the Employment Standards Act, 2000 (ESA), as of July 1, 2024, it became mandatory for any temporary help agency to hold a valid licence to operate.
Likewise, any recruiter must hold a licence to act as a recruiter under Ontario’s law.
And clients, such as employers looking for temporary staff, are prohibited from knowingly engaging or using the services of a THA that is not licensed.
The same prohibition applies to employers or other recruiters who use a recruiter that lacks a licence.
In this blog, we’ll explore everything you need to know about Ontario’s Working for Workers Act, 2021.
What is the Working for Workers Act, 2021?
The Working for Workers Act, 2021 (also known as “Bill 27”) is a law passed in Ontario to strengthen labour standards and protections for workers, especially those who use recruitment agencies or temporary‑help agencies (THAs).
What does the Act do?
The Act makes several changes to the province’s key employment law, the Employment Standards Act, 2000 (ESA), with amendments to other laws.
Among its main goals: improve worker safety and fair treatment, set clear standards for recruitment and temporary staffing agencies, and hold employers and recruiters more accountable.
Who is required to have a Licence?
Under the Act (as part of the amendments to the Employment Standards Act, 2000, ESA), the following entities are required to hold a licence:
Temporary Help Agency (THA)
A temporary help agency (THA), defined as an employer that hires people and assigns them to perform work on a temporary basis for clients, must hold a licence to operate.
This applies even if the agency is based outside Ontario but assigns employees to temporary work in Ontario.
Recruiters
A recruiter, meaning a person or entity (corporation, partnership, or sole proprietorship) that, for a fee, finds or attempts to find employment (temporary or permanent) in Ontario for prospective employees, or finds or attempts to find employees for prospective employers in Ontario, must hold a licence to act as a recruiter.
This requirement applies even if the recruiter is located outside Ontario, as long as they are operating in Ontario for positions there.
However, some entities are excluded from this definition and thus do not require a licence: for example, a regular employer hiring its own staff, an employee doing recruiting as part of their employer-role, certain educational institutions placing students or alumni, trade unions, registered charities, certain government-contract recruiters, and certain services arranging employment for persons with developmental disabilities under specific legislation.
Key Updates Under the Working for Workers Act, 2021, Affecting Recruiters and THAs
Here are the key updates under the Act that impact recruiters and temporary-help agencies (THAs):
1. Mandatory Licensing for Recruiters & Temporary Help Agencies
All THAs and recruiters must obtain a license to operate legally in Ontario. As of July 1, 2024, it is prohibited to operate as a THA or act as a recruiter without a licence.
Also, clients (e.g., employers) and users of recruitment services cannot knowingly engage or use services from unlicensed agencies or recruiters.
2. Ban on Recruiters Charging Fees to Temporary Foreign Workers
The Act amends the Employment Protection for Foreign Nationals Act, 2009 (EPFNA) so that recruiters (or employers) may not charge recruitment fees, directly or indirectly, to foreign nationals being recruited.
For licensing or licence renewal, recruiters must acknowledge this prohibition and confirm they have never charged such fees.
If they or any third-party recruiter engaged on their behalf has charged illegal fees, the licence may be refused or revoked.
3. Joint & Several Liability for Recruiters/Clients Involved in Foreign-National Recruitment
If a corporate recruiter uses another recruiter to bring in a foreign national, and that other recruiter has charged illegal fees, then the corporate recruiter and, potentially, its directors are jointly and severally liable to repay those fees.
This expands accountability beyond the recruiting agency that directly charged the fee; clients and other involved parties must do due diligence when hiring third-party recruiters.
4. Penalties, Fines, and Expanded Enforcement Powers
The government empowers inspectors from the Ontario Ministry of Labour, Immigration, Training, and Skills Development to enforce compliance, including inspections, audits, and investigations.
Violations, such as operating without a licence, using unlicensed recruiters/THAs, or charging prohibited fees, can lead to monetary penalties.
Here are the penalties:
- $15,000 for a first contravention
- $25,000 for a second contravention in a three-year period
- $50,000 for a third contravention in a three-year period
5. Compliance Requirements for Recruiters & THAs
Recruiters and THAs must keep proper records and documentation. This includes:
- Employment and placement contracts.
- Fee policies, especially confirming no charges to foreign nationals.
- Worker records, pay details, and employer/employee information for assignments.
- Displaying or otherwise maintaining proof of licence as required under the licensing rules.
Moreover, if a recruiter or THA uses third-party partners (sub-recruiters or subcontractors) to place foreign nationals, those third parties must also comply with licensing and fee-prohibition rules.
Importantly, the Act aims to strengthen protections against unpaid wages, illegal fee-charging, and exploitative recruitment practices, particularly for vulnerable workers, such as temporary foreign workers.
How these Changes Improve the Recruitment Industry
The reforms under the Working for Workers Act, 2021, bring a number of benefits that strengthen the recruitment and staffing industry, not just for workers but also for recruiters, agencies, and client companies alike.
- More fairness for workers & reduced exploitation: Because only licensed recruiters and temporary-help agencies (THAs) can legally operate, the risk of worker exploitation is reduced.
- Increased trust in staffing & recruitment agencies: Clients (employers) can check whether a firm is licensed before engaging them.
- Higher industry standards and more accountability: Mandatory compliance raises the bar for all recruiters and THAs. They must operate transparently, comply with labour laws, and strengthen internal controls.
- Better long-term client relationships: Reliable staffing, fewer disputes, and consistent compliance lead to stronger, longer-lasting business relationships.
Conclusion
The Working for Workers Act, 2021, matters because it brings much‑needed structure, transparency, and accountability to Ontario’s recruitment and temporary‑staffing industry.
With mandatory licensing of recruiters and temporary‑help agencies (THAs), the law helps ensure that only legitimate, compliant firms operate, which protects workers, promotes fair treatment, and strengthens trust among clients, agencies, and employees.
For agencies and recruiters, the Act signals a shift: compliance is no longer optional, ethical recruitment is now the baseline.
This means agencies must tighten documentation, ensure compliance with labour and safety laws, and manage contracts and vendor relationships responsibly.
For employers and clients, the law highlights the importance of due diligence: engaging only with licensed recruiters or THAs reduces legal and reputational risk, improves staffing reliability, and supports long-term workforce stability.
Looking ahead, the Working for Workers Act lays the foundation for a safer, more transparent recruitment ecosystem in Ontario, one where workers’ rights are respected, agencies operate with integrity, and employers can build stable, compliant relationships with staffing partners.
