Treadstone Associates
Ask an Expert · 3 min read

Is a temp staffing agency’s licence transferable on a sale, and is the client liable if the agency doesn’t pay its workers?

No to the transfer, and yes to the liability — both come from the same 2024 licensing regime, and both catch a buyer who checked the wrong entity’s licence.

Treadstone Associates · Updated 2026

Short answer

ESA s.74.1.9 provides that a temporary-help-agency licence “is not transferable” — an asset buyer is a new legal person and needs its own licence before operating as an agency, whatever the seller’s licence status was. Separately, s.74.18(1)–(2) makes every client of a licensed agency jointly and severally liable for wages the agency fails to pay, apportioned by hours used — a liability that reaches a buyer using someone else’s staffing agency, not just a buyer acquiring one.

Two different exposures, on two different sides of the same regime

A buyer confirming that a target’s staffing supplier holds a current licence is checking the client-side risk under s.74.18. A buyer acquiring the staffing agency itself is checking a different thing entirely: whether its own newly formed entity, not the seller corporation, will hold a licence in its own name from the day it starts invoicing clients and running payroll for placed workers. Verifying the seller’s licence is current answers the first question and says nothing about the second — s.74.1.9 makes the seller’s licence stay with the seller regardless.

Client liability does not require knowledge of the lapse to bite

Section 74.18 imposes joint and several liability on every client of an agency whose licence lapses, apportioned across all clients by hours used, without regard to whether any individual client knew the licence had lapsed. A separate, harsher provision catches a client that continues booking an agency it knows is unlicensed: s.74.1.1(2) makes that the client’s own strict-liability offence, independent of anything the agency itself did wrong.

Where this played out — Case Files

The client-liability side decided temp agency and recruiter licensing, and the client’s own liability. The non-transferability of the agency’s own licence is the subject of the agency licence that does not transfer with the assets.

Sources

  • • Employment Standards Act, 2000 (Ontario) — s.74.1.1(1)–(2) licensing and the client’s own offence for knowingly using an unlicensed agency; s.74.1.9 non-transferability; s.74.18(1)–(2) client joint and several liability for an agency’s unpaid wages.
  • • No treadstonelaw.ca page addresses the temporary-help-agency licensing regime specifically; its closest adjacent content covers general employee indemnities on an asset purchase rather than this ESA licensing mechanic.

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