hi everyone welcome to business in Canada do it right and mein jakov today I would like to speak about staffing agency operations in Ontario and the new rules for the licensing and regulation of staffing agencies that were introduced into the employment standards Act of Ontario on July 1st 2023 so before I start talking about the rules and the licensing requirements I would like to remind you about the difference between Staffing and recruiting operations and the difference is important because the law treats these two different operations differently so recruiting is the situation where we uh help our clients to find their own employees who have been then employed by the client there are no relationship between us and employees during the whole process except for referral for the interviews with the client on the other side uh Staffing operations is the situation where we employ the employees and then refer them or assign how the law uses the word uh to the clients to perform the work and today's presentation although is dedicated for the staffing operations mostly relevant for both types I probably will put a short video separately for the recruitment but the rules the requirements and the processes are identical for two types of operations so is there license requirement in Ontario um as of now and the straight answer is yes maybe not right now but the uh employment standards act the law that regulates stuffing and recruiting operations has been changed uh in July 2023 and uh it will come into effect um gradually starting January 1st 2024 uh but at the end of that um process or or transition period the uh licensing and registration of staffing agencies will be mandatory in the province of Ontario uh the deadlines for the registration it's important to highlight because the original deadline was introduced as January 1st 2024 but um literally this week the ministry of labor changed the deadline and extended it by additional six months so as of right now the deadline to submit your application is July 1st 2024 but pay attention to the provisions of the transition Rule and the uh dates that the rule mentions so the way the transition rule is structured is that those businesses who applied before July 1st 2024 meaning by June 30th 2024 will be able to operate their businesses without a license for as long as the application has been submitted and is being reviewed by the ministry of labor on the other side those businesses that applied after July 1st or on July 1st 2024 will not be allowed to operate their businesses until the application is being reviewed and approved by the ministry keep in mind that um every everyone expects a flood of applications within the next couple of months so the process of approval might take time and uh essentially if you fail to submit before July 1st 2024 you might end up being unable to operate your business for an extended period of time which might not be a good idea for operating active businesses so what are the requirements to register the requirements are pretty straightforward you have to provide your basic corporate business information location responsible officers directors uh number of employees uh nothing special nothing too complicated you have to pay $750 of the registration fees uh to the government and you have to submit the most painful Point $25,000 of irrevocable letter of credit with the Ministry of Labor uh what is irrevocable letter of credit is a special document that is being issued by your bank to the government that essentially allows the government to take money all $25,000 or portion of them at any time and the way that the regulations are structured is anytime that there's a claim by an employee or worker that uh those people were un were not paid their salaries over time uh you charge them um unlawful fees the government will take money from the letter of credit you will have to provide additional U Top up to the letter of credit in order to continue to operate and to keep your license in effect um so um it is somewhat comp complicated process you have to talk to a bank not all the banks will be happy to issue those letter of credits but um the only way to get it is from the local Canadian Bank uh I was expecting that the government will allow also to apply for a bond with insurance companies but they decided to stay only with the letter of credit you will need to confirm your good standing status with the tax authorities the process will be done through the same uh portal I will talk about it in a moment and of course you have to keep your uh license and your corporate information up to date in order to operate in compliance with the law so how do we register the registration is done online only there is no other option uh government will not accept paper forms they do not exist technically you have to register for a my Ontario account at the link on the screen I will also provide the link in the description section below and you have to submit all the documents through online portal you have to obtain your letter of credit from the Canadian Bank in a form of PDF file which was then upload through the uh portal and you have to verify your good standing with the tax authorities they will essentially um provide a uh login information through the portal through that login information you will obtain a code or uh confirmation number which you then submit with the ministry of labor and they they validate it with the tax authorities so if you did not file your taxes on time if you still have some uh outstanding tax reporting which means corporate income tax uh all the employment related uh remittances reporting t4s whatever and HST do it before July 1 2024 in order to be able to obtain the uh good standing confirmation from the uh Ministry of Finance uh what are the additional rules so uh as always licensing um do not apply to the uh businesses operating Outsource of subcontractors because subcontractors are not part of the employment standards act and therefore the rules do not apply but keep in mind that under the Canadian laws the transition of a subcontractor to the status of employee could be very uh fast and unexpected Ed because the ministry of labor the tax authorities WCB for that purpose they do not care about what your agreements say what you say about the status of that individual they have their own tests based on which they determine the status of an employee uh of a person as an employee or a subcontractor of your company so um if you need our assistance to review your documents to make sure that they provide proper uh protection and and structure the relationship in a way that the person will not transition into an employee Without You intending so uh talk to us I will be able to assist uh license supplies both to recruiting and staffing agencies and separately to each which means that if you operate two of these operations you will need to apply twice you will need to pay two um licensing fees you will need to submit two separate letters of credit so $50,000 that the bank will take from you and put it on a separate account where you do not have access to this money most probably uh so be careful if you operate both operations the uh separate processes required for each of them uh so what are our insights from all this process and the News uh that were introduced to the employment standards act uh first of all unfortunately this is another money grab by our government instead of introducing proper system of compliance requirement of compliance documents employment agreements forms uh policies and procedur me that might have made uh make your business more compliant and streamlined the government concentrated its attention only on the licensing fees a letter of credit um taking more money from from the businesses um also to ensure that that the employees getting paid at the end of the day but I think that the opportunity was much greater and the use was uh poorly performed uh you must apply really must apply before July 1st 2024 unless government changes that deadline line again but uh July 1st 2024 is already too late okay so keep in mind the date June 30th 2024 in order to be able to operate your business after you applied and before the license was approved um so as I already said no license is required for the businesses Outsourcing subcontractors operations uh if you operate both uh types of operations you have to apply twice pay two times twice the fees and provide two letters of credit the new rules changed the way that the law applies and now the law applies to the staffing agencies and to the clients uh separately but at the same time which means essentially under the new regulations the clients are not allowed to use the services of unlicensed staffing agencies uh which essentially uh closes this whole situation for both sides you are not allowed to operate the licensing the staffing agency without the license but the client also is not allow allowed to use your services unless you are licensed so make sure you apply in order not to lose your clients when the time comes and so all other uh rules that I already discussed in my previous video the link is uh on the screen and I will put it in the description section below uh remain the same you must ensure that your documents comply with the employment standards act that you have a proper agreement that protects you and your interest both with your employees and also a separate agreement with your clients if you need our assist please give a call or contact me by email I will help you preparing those agreements to keep your business protected streamlined and in compliance with the employment standards act that completes our today's presentation thank you for being with me Eugene uh from cbes my contact information is on the screen please do not forget to subscribe uh like us if you like the video leave your comments in the comment section below H propose new topics for the presentation which I will do my best to accommodate thank you and see you next next time with new presentations bye-bye