When Should You Convert a Temp Worker to a Permanent Hire?

Most warehouse, plant and general labour employers decide on a temp-to-hire conversion somewhere between 8 and 13 weeks into the assignment. That is long enough to see attendance, safety habits and speed across a few volume swings, and it usually lines up with the point where the agency's conversion fee drops or disappears. In Ontario the law sets a hard outer limit: an agency can only charge you a fee for hiring its worker directly within the first six months of that worker's assignment with you.

The right timing for your site depends on three things: what the contract says, how quickly you can judge the role, and whether the work will still be there in three months.

Start with the conversion clause, not the calendar

Before you think about when, read how your staffing agreement prices a conversion. The clause usually takes one of these shapes:

• Hours-based buyout. The fee shrinks as the worker logs hours with you and reaches zero at a set threshold. Thresholds of 480 to 1,040 hours (roughly 3 to 6 months full time) are common for hourly roles.
• Percentage of first-year pay. A flat percentage of the worker's starting annual wage, sometimes on a sliding scale that steps down month by month.
• Flat fee. One fixed amount per conversion, regardless of timing. Less common for labour roles, more common for skilled trades or office staff.
• No fee after a minimum term. Some agreements simply say you can hire the worker free of charge after a stated number of weeks.

These are typical structures, not fixed prices. What moves the number is the role's pay rate, how hard the role was to fill, how long the agency has been carrying the worker on its payroll, and what you negotiated up front. The cheapest moment to settle conversion terms is before the first worker shows up, when you still have leverage.

The legal limits in Canada and the US

Ontario. The Employment Standards Act limits what a temporary help agency can charge. A fee for directly hiring an assignment employee is only allowed within six months of the day that worker started their assignment with your business. After six months, you can hire them with no fee, and a contract clause saying otherwise is not enforceable on that point. The ESA also bars agencies from stopping a worker from taking a job with a client. Our Ontario agency licence checklist covers the other items to verify.

Québec. Personnel placement agencies must hold a CNESST licence, and the labour standards rules restrict agreements that would keep a worker from being hired by the client business. Ask the agency to show where its conversion clause sits relative to those rules.

Other provinces and the US. Outside Ontario and Québec, conversion fees are mostly a matter of contract. US states generally leave it to the agreement between client and agency, so read the buyout schedule closely and get it in writing before the assignment starts.

Signs a temp is ready to convert

Waiting for the fee to hit zero is cheap, but holding back a strong worker too long carries its own cost. Good temps get offers elsewhere. Watch for these signals:

1. Attendance across a full cycle. Clean attendance through at least one high-volume stretch and one slow stretch tells you more than six perfect weeks in a quiet month.
2. Safety behaviour without reminders. Wearing PPE, following lockout and racking rules, and reporting near misses on their own.
3. Speed at or near your standard. Pick rates, units per hour or line output that match your trained staff, or a clear upward trend toward it.
4. Cross-training. They can cover a second station, a second shift role, or a piece of equipment you would otherwise have to train someone else on.
5. Supervisor pull. Leads ask for this person by name when building the schedule.

If three or more of these are true by week 8, it is usually time to talk numbers with the agency.

When to wait longer

There are good reasons to keep someone on the temp side a while longer.

• Seasonal volume is still uncertain. If you are hiring through the November and December peak, you may not know your January headcount until after the holidays. Converting in October and laying off in February costs more than carrying the temp a few extra weeks.
• The role itself is changing. A new WMS rollout, a line reconfiguration or a move to a new building can change what the job requires.
• Probation and benefits timing. Once converted, the worker becomes your employee, with your probation period and your benefits waiting period. Some employers time the conversion so the benefits start date lines up with a plan renewal.
• Licensing or certification still pending. For forklift, reach truck or other powered equipment roles, make sure your own training and evaluation are on file before the worker is on your payroll.

When to move faster

Sometimes paying a conversion fee early is the better deal:

• The worker has an outside offer and you would lose them.
• The fee is small next to what a fresh hire would cost you in recruiting, onboarding and lost output.
• You are filling a hard-to-recruit skilled role where a second chance to find the same person is unlikely.

Run the comparison on paper. Our guide to the true cost of a temp worker versus a direct hire walks through the payroll, statutory and recruiting costs on both sides.

How to handle the conversion cleanly

A conversion goes smoothly when everyone knows the plan.

• Tell the agency first. Most agreements require notice. Ask for the exact fee as of your intended start date, in writing.
• Confirm the worker's start date and pay. Many employers keep the hourly pay the worker had as a temp, or raise it slightly, since the agency markup no longer applies.
• Set the probation terms. Decide whether time on assignment counts toward probation. Write it in the offer letter.
• Handle the paperwork handover. New tax forms, direct deposit, benefits enrolment and your own safety orientation sign-off. Do not assume the agency's orientation records carry over.
• Plan the backfill. If the converted worker was covering a temp slot, order the replacement before their last agency shift so the line is not short.

Frequently asked questions

How long should a temp work before being hired permanently?

Many employers make the call between 8 and 13 weeks, which covers enough shifts and volume changes to judge attendance, safety and speed. Some wait until the conversion fee in their contract drops to zero, often around 3 to 6 months for full-time hours. In Ontario, any fee must end at six months from the worker's first day on assignment with you.

Do you have to pay a fee to hire a temp worker directly?

It depends on your agreement and your province or state. Most staffing contracts include a conversion fee or buyout that applies for a set period, then falls away. In Ontario, the Employment Standards Act only allows that fee within the first six months of the assignment.

Can a staffing agency stop you from hiring its worker?

In Ontario, no: the ESA prohibits agencies from preventing a client from hiring an assignment employee, and from stopping the worker from accepting the job. Québec's rules for licensed placement agencies also restrict clauses that keep a worker from being hired by the client. Elsewhere, the contract terms govern, so read the non-solicitation and buyout sections before you sign.

Does time as a temp count toward probation after conversion?

Not automatically. The temp was the agency's employee, so your probation clock normally starts on the conversion date unless your offer letter says otherwise. Many employers shorten or waive probation for workers who already proved themselves on assignment.

Plan your temp-to-hire terms up front

If you are building a crew for peak season and want the option to keep your best people, set the conversion terms before the first shift. Tell us about the roles, the site and the timeline on our contact form, or see how we staff sites in your area, starting with Toronto. We reply in writing with the rates and conversion terms laid out.