Temporary Foreign Worker Program: Employer Compliance

Reviewing Employer Compliance

ESDC/Service Canada has the authority to review the activities of any employer using the TFWP, in relation to their LMIA or LMIA request, by conducting one of the three following forms of review:

• Inspection;
• Employer Compliance Review (ECR); and/or
• Under Ministerial Instruction

During any form of review, LMIAs may be temporarily suspended. This suspension prevents foreign workers from obtaining a work permit from Immigration, Refugees and Citizenship Canada (IRCC) while the review is in process.

Inspection

The purpose of an inspection is to make sure the employer continues to satisfy the conditions set out in the offer of employment, the positive LMIA letter and the annexes, thereby ensuring that workers are not mistreated and that the TFWP is being used as intended. The inspection may occur anytime in the six years following the date of the authorized employment period for which the work permit was issued.

Reasons for an Inspection

There are three reasons an employer could be selected for an inspection:

• there is reason to suspect non-compliance;
• the employer has been found non-compliant in the past; or
• the employer has been randomly selected.

Expectations of Employers during an Inspection

Employers must:

• attend the inspection;
• answer questions;
• provide requested documents or information;
• provide assistance to the investigator; and
• retain all records relating to his/her compliance with the conditions of the offer of employment, LMIA application, letter and annexes for six (6) years from the start date of the period of employment for which the work permit was issued.

During an inspection, an officer may also enter and inspect any place in which a foreign national performs work and interview any foreign or Canadian workers at the worksite.

Penalties

Employers who were found non-compliant for a violation could face a range of consequences. These are determined on a points system that considers:

• the type of violation;
• compliance history;
• the severity of non-compliance;
• the size of the business (for financial penalties only); and
• whether the employer voluntarily disclosed information about possible non-compliance before an inspection was initiated.

Possible penalties may include:

• warnings;
• monetary penalties ranging from $500 to $100,000 per violation, up to a maximum of $1 million over one year per employer;
• a ban of one, two, five, or ten years, or permanent bans for the most serious violations;
• the publication of their name and address on a public website with details of the violation(s) and/or consequence(s);
• the revocation of previously-issued LMIAs.

Final Decision

Employers who are found to be non-compliant will receive a letter that explains the violation and the resulting penalties (outlined below).

From this point, the employer will have 30 days to respond in writing with additional information regarding the violation, the resulting penalties, or both. This may include justification for non-compliance, as well as any other factor or consideration that the employer feels is important for the officer to know before a final decision is made.

Employers may also ask for an extension beyond the initial 30 days for responding. Extension requests will be considered on a case-by-case basis.

If the final decision is a finding of non-compliance, the employer will receive a final notice, which includes information about the condition(s) violated, how the employer failed to comply, the reason(s) for the decision, the penalties and next steps to take

Justification for Non-compliance

In some cases, non-compliance may be justified. Violations may be justified if they are the result of:

• a change in federal or provincial law;
• a change to the provisions of a collective agreement;
• a major change in economic conditions that directly affects the business of the employer,
• an error made in good faith by the employer, such as an unintentional administrative or accounting mistake, and the employer later made efforts to correct it for any workers who were affected;
• an exceptional and unforeseen event (ie. natural disaster); and
• other similar situations.

During an inspection, and before a final decision of non-compliance is made, the employer should submit information and supporting evidence that explains how the non-compliance is justified to IRCC. If the officer finds the justification acceptable, the employer may avoid being found non-compliant.

Employer Compliance Review (ECR)

Unlike inspections, ECRs occur before the LMIA application is approved in order to verify past compliance with respect to program requirements for wages, occupation, and working conditions. Returning employers attest to this past compliance on their LMIA application form. In the ECR, ESDC/Service Canada may look at an employer's compliance for up to six years prior to the receipt of the LMIA application.

Employer requirements ensure that foreign workers are:

• employed in the "same" occupation (previously “substantially the same” occupation) set out in the offer of employment; and
• provided with wages and working conditions that are substantially the same as - but not less favourable than - those set out in the offer of employment (previously “substantially the same wages and working conditions”).

Expectations of Employers during an ECR

Upon re-applying to the TFWP, employers may be subjected to a document-based review to ensure that they have met the wage, working conditions, and occupation requirements. Employers will be asked to provide specific documents to demonstrate their compliance. During the review, employers will have an opportunity to provide justifications for initial findings of non-compliance and to take corrective action, in some cases.

Pending LMIAs may not be finalized until the ECR is completed.

Penalties

Employers who are unable to demonstrate their past compliance will be found non-compliant.

Employers found to be non-compliant are subject to:

• possible refusal to process applications for two years from the TFWP and International Mobility Program (IMP);
• a negative LMIA being issued for any pending applications; and/or
• the revocation of previously-issued LMIAs.

Review under Ministerial Instruction

The purpose of a review under Ministerial Instruction is to determine if new information received by ESDC/Service Canada justifies the revocation of an already approved LMIA and may occur at any point in time after a positive LMIA has been issued. Employers are selected for this form of review only when ESDC/Service Canada receives an allegation through the tip line regarding an LMIA that may justify the suspension/revocation based on public policy reasons.

During the period of review, the LMIA will be suspended.

Expectations of Employers during a Review under Ministerial Instruction

Employers undergoing this form of review will be:

• notified whether they are being reviewed for a potential revocation using Ministerial Instructions;
• notified whenever an LMIA has been suspended or revoked; and
• provided with an opportunity to provide relevant information that relates to the allegation(s).

Revocation

Revocation is the permanent cancellation of an LMIA or the cancellation of one or more positions on the LMIA. Once revoked, the LMIA may no longer be used to obtain a work permit from IRCC. If an LMIA is revoked after a work permit has been issued, IRCC may also revoke the associated work permit from the foreign national.

A revocation may occur when:

• new information is provided to the ESDC/Service Canada after an LMIA has been approved that reveals that the employment of a foreign worker would have a negative impact on the Canadian labour market;
• the employer (or group of employers) provided false, misleading, or inaccurate information on the LMIA application; or
• the employer has been found non-compliant through an inspection and their name has been added to the public website of employers as a result of non-compliance.

Review Outcomes

There are two possible initial outcomes of any review:

• Satisfactory: the employer demonstrates compliance with the conditions inspected or sufficiently justifies the non-compliance; or
• Non-compliant: the employer is unable to demonstrate compliance with the conditions inspected or unable to sufficiently justify the non-compliance.

If the outcome of the review is "non-compliant", a positive LMIA will not be issued and the LMIA processing fee will not be reimbursed.

Voluntary Disclosure

Employers who think they may have violated the conditions of the TFWP are encouraged to take necessary actions to become compliant and to voluntarily disclose this information to IRCC. IRCC will then determine if the information received is relevant and credible, assess the severity of the possible violation, and determine if an inspection is necessary. Not all disclosures will lead to an inspection.

If an inspection is conducted after a voluntary disclosure and the employer is found non-compliant, the employer may face a reduced penalty or no penalty at all. In such cases, IRCC will consider a number of factors to determine if the employer qualifies for a reduced penalty, including:

• the completeness of the disclosure;
• whether the disclosure is truly voluntary (i.e. the employer is not already the subject of an inspection or enforcement action);
• the severity of the impact of the violation on the foreign worker;
• the severity of the impact of the violation on Canadian workers or the Canadian economy;
• the timeliness of the disclosure;
• the employer's history of voluntary disclosures; and
• the nature of the condition the employer has failed to comply with.