How to Start and Operate a Staffing Agency in Ontario ( Canada )
How Do Employment Agencies Work?

1. Recruiting vs Staffing
Difference between Recruiting and Staffing agency:
a. Recruiting agency – assists clients to identify and hire the most suitable candidate. The client will be the one hiring and employing the candidate, and the agency only receives a commission for its efforts.
b. Staffing or temporary employment agency - hires and employs temporary workers, pays for their work, and sends (assigns) then to clients to work at their premises or projects.
Different provinces in Canada have adopted different approaches with regards to the regulation of staffing agencies. Some (BC and AB) require staffing agency to obtain a license and, in some instances, to deposit a security deposit with regulators.
In Ontario, the law demanding license for staffing agencies have been repealed, and the regulator applied a very strict framework of compliance rules and documents that staffing agencies must retain.
This presentation will discuss the legal aspects of operating a staffing agency in Ontario , but due to the clear and express legal liabilities arising out of the nature of business operations of the staffing agency, similar logic could be applied to any other province in the country.
The legal environment:
1. Staffing agencies are governed by the Employment Standards Act of Ontario.
2. In accordance with the Act, a staffing agency is considered as the employer of the workers including during the time when the workers are being assigned to the actual place where they perform their work.
3. The workers are considered as “assigned” to the client of the staffing agency.
4. Staffing agency is responsible for the health and safety, training and other related issues associated with the work performed by a worker.
5. Staffing agency is responsible for all the payments due to a worker.
6. There are certain responsibilities imposed on a client, but the main focus of the law is the agency.


Information About Agency:
Below is the list of information that an Agency must collect, prepare and provide to a worker:
• the legal and operating name of the agency;
• contact information for the agency (address, telephone number and one or more contact names);
• a copy of the information sheet published by the Director of Employment Standards entitled "Your employment standards rights: Temporary help agency assignment employees".

Information about assignment:
• the legal and operating name of the client;
• contact information for the client, including its address, telephone number and one or more contact names;
• the hourly or other wage rate or commission and benefits associated with the assignment;
• the hours of work;
• a general description of the work;
• the estimated term of the assignment (if known when the offer is made); and,
• the pay period and pay day.
This information must be provided in writing as soon as possible. An Agency must retain this information for 3 years after the termination of the employment.

Continuation of employment:
Employment of a temporary assignment worker continues whether during the assignment or during the periods between assignments. Essentially, whether an employee was assigned or not, we calculate the whole term of the relationships between the agency and the employee. This might result in significantly higher “termination entitlements” than some might expect.

Basic employment rules apply to the stagging agency:
• Equal pay for equal work
• Public holidays
• Termination of assignment
• Pay in lieu of notice
• Termination of employment
• Severance of employment
• Reprisal by a client of an agency


Reprisal by a client of an agency
A temporary employment agency and its client(s) are not allowed to penalize an assignment employee for doing things such as asking questions about their ESA rights, filing a claim under the ESA or otherwise exercising their rights.

“Reprisal” or “Penalizing” means an agency/client are not allowed to:
• intimidate the employee;
• refuse to have the employee perform work;
• refuse to allow the employee to start an assignment;
• terminate the assignment of the employee; or,
• otherwise penalize or threaten to penalize the employee
• for any of the above stated reasons.



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All information provided in this video is for informational and reference purpose only. Nothing contained herein shall be considered as a legal advice or instructions to be acted upon. CBES – Canadian Business and Enterprise Services does not offer legal advice online or on its YouTube channel. Please consult a professional before you act in reliance on the information contained in our videos.

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