Temporary Foreign Worker Program Overhaul: What Employers Need to Know

For the past several months, the Canadian Temporary Foreign Worker Program (TFWP) has been the focus of intense media coverage due to program abuses in a variety of sectors.  On 20 June 2014, the Government of Canada responded by announcing a major overhaul of how applications for temporary work authorization will be handled going forward.

While some government measures are effective immediately, other reforms will not be implemented right away. Nevertheless, many Canadian employers and temporary foreign workers will be affected by the program’s new changes.

“The government remains committed to keeping the door open to foreign workers, particularly workers coming to Canada to fill skilled, well-paid jobs,” said Attorney David Cohen. “That being said, it is important that employers seeking to hire abroad are well versed in the new requirements, as well as how they may affect them at every step of the hiring process.”

Canadians currently employing foreign workers should be aware that the changes announced this month do not affect their current employees’ work permits. Although new procedures will apply to renewals in the future, current work permits remain valid until their expiry date.

If seeking to hire new workers, however, a number of new changes are currently in play. They include the following:  

Labour Market Impact Assessments (LMIAs)

Most employers require government approval before hiring a foreign worker. This approval comes in the form of a Labour Market Impact Assessment (LMIA), formerly known as a Labour Market Opinion (LMO). As with an LMO, the purpose of an LMIA is to justify the hiring of foreign workers by demonstrating that qualified Canadians are unavailable for specific jobs. This is done primarily by advertising the jobs in Canada and showing that Canadian applicants lacked the training or experience required.

The application fee for LMIA requests is now $1000 per worker, an increase from the $275 per worker fee for LMOs.

Under the new LMIA system, classification of jobs has been simplified. Jobs will now be divided into just two categories: high-wage and low-wage. Jobs are considered high wage if the salary meets or exceeds the median wage in the province where the job will be performed, and low-wage if the salary is below the median. Click here to view a chart of the median wages in each province/territory.

High-Wage LMIAs

For high-wage positions, the LMIA procedure is much like that of the old LMO. However, a few major changes have been made:

• Application forms are longer and more in-depth;
• Employers must complete a ‘transition plan’ that will explain how they intend to permanently fill the job being held by the temporary foreign worker;
• Employers are required to keep more detailed records during the foreign worker’s stay in Canada;
• Certain applications will be processed more quickly. Foreign workers in skilled trades, high paid workers with salaries in the top 10% of Canadian earnings, and workers coming for 120 days or less will all receive LMIA decisions in 10 business days; and
• A new time limit for high-wage work permits may be imposed, but has not yet been announced.

Generally speaking, the type of information required for high-wage workers is not a departure from previous requirements. Instead, the new procedures will formalize requirements that were already routinely imposed on many employers on a discretionary basis.

Low-Wage LMIAs

The picture for low-wage workers is quite different. Since much of the controversy in the last year revolved around employer abuse of low-wage workers, the government has implemented measures that may make it harder for certain employers to hire these sorts of employees. The most important changes include:

• Positive LMIAs for low-wage jobs will now allow employers to hire a foreign worker for only one year at a time.
• For organizations with more than 10 employees, low-wage foreign workers can make up no more than 10% of the work force. Transitional measures will apply to employers whose work forces do not comply with this new rule.
• Employers in the accommodation and food service sector as well as the retail trade sector will no longer be allowed to apply for LMIAs for jobs in 10 lower-skill occupations.
• As with high-wage LMIA applications, employers must now pay a higher application fee, complete longer application forms, and keep detailed records about their recruitment practices.

Hiring without an LMIA

There are a number of ways for employers to bring their workers to Canada without the need to obtain an LMIA. Individuals whose work permits may be exempt from LMIA requirements include:

• Workers covered under the NAFTA agreement;
• Intra-Company Transferees;
• International Experience Canada participants (also known as Working Holiday permit holders);
• Post-Graduate work permit holders;
• Bridging Open Work Permit holders; and
• Participants in certain academic exchanges such as post-doctoral fellows and visiting professors.

Programs such as those above have now been reclassified as ‘International Mobility Programs’. Some of these programs will now receive greater government oversight. For instance, recent changes to the Specialized Knowledge Stream of the Intra-Company Transfer program are being put into place.

In addition, beginning in summer 2015 employers hiring through some International Mobility Programs must have their job offers approved by a Canadian visa office before their hired employees can request a work permit. The processing fee for the job offer approval application will be $230.

Hiring Foreign Workers Today

With the overhaul of Canada’s temporary work programs, the Canadian government is making an effort to ensure that foreign workers who come to Canada are brought in fairly. Once in the country, greater oversight will ensure that employers who do not follow the rules are subjected to serious penalties and fines of up to $100,000.

“For many Canadian employers, it is now more difficult to hire abroad,” said Attorney David Cohen. “That was certainly the point. More than ever, I encourage employers to go through their applications carefully and make sure that every little detail has been addressed. The stakes are high, both for their company’s livelihood as well as their foreign workers.”

Canadian employers who apply for the wrong type of work permit, or who submit incomplete applications, may run the risk of losing any and all application fees as well as weeks or months of waiting time. Attorney Cohen suggests that those looking to bring in foreign labour should seek professional guidance before beginning an application.

“I highly recommend that employers, even those who have gone through the process before, speak to an immigration professional as soon as they start thinking of hiring outside of Canada,” said Attorney Cohen. “A quick consultation today could save you a great deal of headache down the line.”

In the next edition of CIC News, we will explore these changes from the perspective of a Temporary Foreign Worker.

To find out if you are eligible to work temporarily in Canada, or to learn more about bringing a foreign worker to Canada, please contact Campbell Cohen today.