Ottawa tightens rules around foreign worker program as unemployment rate rises

“Right now, we know that there are more Canadians qualified to fill open positions,” he said on Aug. 26. “The changes we are making… will prioritize Canadian workers and ensures Canadians can trust the program is meeting the needs of our economy.”

The changes, set to take effect by Sept. 26, 2024, particularly impact the low-wage stream and come at a time when the national unemployment rate has been rising — hitting 6.4 per cent in June.

The goal is to ensure that employers “invest in the full range of workers available in this country,” including young people and those historically underrepresented in the workforce.

Under the new rules, Ottawa will no longer process Labour Market Impact Assessments (LMIAs) in the low-wage stream in areas with an unemployment rate at six per cent or higher. Also, employers can hire no more than 10 per cent of their workforce through the TFWP in the low-wage stream, down from the previous 20 per cent cap.

Employers in key industries such as food security, construction, and healthcare will be exempt from these tighter caps and can continue hiring through the TFWP to meet pressing demands, Ottawa said. However, even these sectors will need to comply with other new measures, such as a one-year limit on the employment duration of low-wage temporary foreign workers, reduced from two years.

Hiring a foreign worker

Lijing Cao, a Toronto-based immigration lawyer at Bellissimo Law Group PC, said hiring foreign workers can take a lot of time and resources for employers — including filing an extensive LMIA and ensuring compliance with the TFWP on an ongoing basis.

“For example, the employer will need to provide the foreign worker with employment in the same job as stated in the employment offer, and they must pay the foreign worker wages that are mainly the same — but not less favourable — than those in the employment offer,” she said.

Employers are also required to keep all relevant records — including documents related to the LMIA, payslips, and time sheets — for six years, said Cao.

Random audits

Employment and Social Development Canada (ESDC) also has the authority to randomly audit employers for immigration compliance, she said. It’s critical that employers have the resources and keep proper records to respond in the event that happens.

There are also costs to keep in mind, including the government processing fee for the LMIA and legal fees if they don’t know how to navigate all the paperwork, said Cao.

“The immigration process can be complicated and take a long time,” she said. “It could take several months for a foreign worker to get permission to work in Canada after applying. If a company wants to hire a foreign worker, they should begin the process as soon as possible to understand the requirements and the timeline.”

Also, for foreign workers with closed permits, employers usually can’t change their job, location, or salary without getting a new permit, said Cao. “It’s important to get legal advice before making any changes to their employment.”

If an employer, for example, has two work locations — and knows the worker might shift between those worksites — that information should be included in the LMIA application to ensure it’s covered, she said.

LMIA approval

The LMIA process involves multiple steps, including confirming the occupation, setting appropriate wages, and providing proof of recruitment efforts. Employers may also be required to participate in phone interviews with ESDC officers during the application process, said Cao.

There are also additional costs outside of government and legal fees, including travel costs, she said.

“For the low-wage LMIA, the employer must pay for the round-trip transportation cost for the foreign worker to arrive at their work location in Canada at the beginning of their employment and to return to their country of residence at the end of their employment,” said Cao.

Those transportation costs cannot be recovered from the foreign worker, she added. High-wage LMIAs don’t have that same requirement for employers to absorb the travel costs, she said.

Terminating a temporary foreign worker

If things don’t work out with a temporary foreign worker, they can be laid off or terminated just like any other Canadian worker — meaning the same applicable provincial or federal laws must be followed, she said.

“But there are two things I want to mention. Under the Temporary Foreign Worker Program, the employer should report to ESDC any change in the employment status of the foreign worker based on the work permit,” she said.

The second thing applies to employers who may have nominated a foreign worker via a provincial nominee program (PNP). In that case, they are required to report to provincial authorities any change in employment status — whether that’s a termination or a resignation, said Cao.  

Enter some text...