Strict Interpretation of Compliance in the Foreign Worker Program

[The following article appeared in the May edition of The Canadian Immigrant. I have slightly modified it for this blog post.]

Back in 2013, Canada’s temporary foreign worker program was rocked by wellpublicized stories of abuse. As a result, the Government of Canada introduced a comprehensive compliance regime for employers of foreign workers, and promised to ban companies from being able to hire temporary migrants for two years if they breached the new conditions. In 2015, Canada’s Immigration and Refugee Protection Regulations were further amended to introduce an administrative monetary penalty regime, which would also fine employers for non-compliance.

The number of Canadian employers who have either been banned or fined for non-compliance is currently quite small, although both Immigration, Refugees and Citizenship Canada (IRCC) and the Department of Employment and Social Development (ESDC), the two main government agencies that manage Canada’s foreign worker programs, have indicated that the number is likely to grow in the near future, especially considering new funding announced with Budget 2017 to better protect vulnerable workers and to encourage employers to do more to hire Canadians first.

On March 23, 2017, the Federal Court of Canada released its first publicized decision on an ESDC decision to ban a company from hiring foreign workers for two years. The decision, Farms v. Canada (Employment and Social Development), provides much-needed guidance to both companies and to the government on how foreign worker compliance regime should be interpreted.

 Conditions for hiring foreign workers

Employers of foreign workers must agree to comply with numerous conditions outlined in Canadian immigration legislation. The most significant one is the requirement to provide foreign workers with wages and working conditions that are substantially the same as — but not less favourable than — those set out in their offers of employment. Essentially, this means that employers must strictly follow their employment contracts with regards to wages, working hours, duties and benefits.

Other requirements employers must follow include complying with all federal and provincial laws that regulate employment and making reasonable efforts to provide workplaces that are free from abuse. In cases where employers made certain labour market promises (such as job creation or skills transfer to Canadians) to receive permission to employ foreign workers, they must they fulfill those commitments.

Canadian employers of foreign workers can also be subject to both inspections and audits by government officers, and must provide any documentation relevant to their compliance on demand. In fact, the government announced it will be increasing onsite inspections of workplaces that employ foreign workers.

Non-compliance with any conditions will only be justified in certain circumstances, including changes in federal or provincial law, new measures by the employer in response to dramatic changes in economic conditions, or errors that were either made in good faith or as the result of administrative error (if the employer subsequently made sufficient efforts to provide compensation to foreign employees).

Since 2015, the consequences of non-justified non-compliance are administrative monetary penalties and bans on hiring foreign workers.

 Conditions have strict interpretations

In Farms v. Canada, the Federal Court held that the justification provisions mentioned above must be interpreted strictly so the Canadian government can prevent the abuse of foreign workers. The often tenuous circumstances of their employment can lack the normal safeguards preventing abuse otherwise available to most Canadian workers.

The court further found that a good faith justification only works where the non-compliance conduct can be seen to benefit the foreign worker and is in the worker’s interest. As well, where a labour market impact assessment application form or a contract employing foreign workers lists conditions and terms of employment, an employer will be unable to claim a good faith lack of knowledge of any conditions or requirements.

Even where non-compliance may factually be justified, employers will not be able to claim that a breach was justified if they do not document any modifications to employment contracts.  In Farms v. Canada, for example, the employer deducted pay from its foreign worker employees’ first paystubs in order to provide them with cash advances, and even produced a letter from a former employee that confirmed that he had received the cash payment. However, the Federal Court determined that such proof was not sufficient, and that employers had to keep records of changes, and obtain written consent from their employees as it occurred.

 Not enough guidance for employers?

At the same time that the Federal Court upheld ESDC’s decision to ban the employer from hiring foreign workers for two years, the Federal Court also chastised ESDC for not providing clear guidance on its website as to what employers had to do to demonstrate compliance with certain conditions, and specifically noted that small businesses may not know what is required.

The most important thing they should recognize, however, is the need to strictly follow the contractual obligations in their employment agreements with foreign workers. Given the decision in Farms v. Canada, it is important that any ambiguities be interpreted strictly and in favour of the foreign workers.


LMIA Cap on Low Wage Employees

Canada’s Temporary Foreign Worker Program (the “TFWP“) allows employers to bring foreign workers to Canada to temporarily fill jobs for which qualified Canadians are not available. After the program became increasingly controversial in 2012-13, the Department of Employment and Social Development Canada (“ESDC“) on June 20, 2014 imposed a cap limiting the proportion of low-wage foreign workers that businesses can employ.

How the Cap Works

Employers with a company-wide business size of 10 or more employees are subject to the cap.  The cap percentage is determined for each individual worksite location and is based on paid positions and total hours worked at that worksite.

Employers that are new to the TFWP or returning employers who did not have any foreign workers on staff on June 20, 2014 are capped at 10% low-wage foreign workers for each work location.

The cap, implemented on June 20, 2014, was phased in to provide employers time to transition to a Canadian workforce which means that they are limited to a:

  • 20 percent cap on the number of foreign workers in low-wage positions, or the employer’s established estimated cap (whichever is lower), if the employer hired a TFW in a low-wage position prior to June 20, 2014; or
  • 10 percent cap on the number of foreign workers in low-wage positions if the employers did not employ a TFW in a low-wage position prior to June 20, 2014.

Effectively, companies are limited to a 10% cap on the proportion of low-wage foreign workers that they can have.  The low-wage is based on a province’s median wage, which as of writing is as follows:

Province/Territory Wages prior to

April 29, 2016

2014 Wage ($/hour)

Wages as of

April 29, 2016

2015 Wage ($/hour)

Alberta $25.00 $25.38
British Columbia $22.00 $22.60
Manitoba $19.50 $20.00
New Brunswick $18.00 $18.50
Newfoundland and Labrador $21.12 $20.91
Northwest Territories $30.00 $31.25
Nova Scotia $18.85 $19.00
Nunavut $29.00 $28.92
Ontario $21.15 $22.00
Prince Edward Island $17.49 $18.00
Quebec $20.00 $20.60
Saskatchewan $22.00 $22.80
Yukon $27.50 $28.51

The calculation of the cap can be complicated, and is perhaps best summarized by this portion of ESDC’s Schedule E – Cap for Low-Wage Positions.
schedulee

The Schedule E also contains sections on how the addition of foreign workers would impact the cap.

The cap does not apply to:

  • Employers with a company-wide business size of fewer than 10 employees;
  • Employers hiring foreign workers for positions related to on-farm primary agriculture, including the Seasonal Agricultural Worker Program;
  • Positions that are truly temporary (e.g. emergency and warranty positions);
  • Positions that are highly mobile or truly temporary and no more than 120 calendar days. This duration
    can be extended if an employer can demonstrate that their peak season, project or event operates
    beyond 120 days;
  • Applications supporting permanent residence under any Express Entry programs (e.g. Federal Skilled
    Worker Program, Federal Skilled Trades Program); and
  • Certain seasonal positions.

It is also important to note that employers who are subject to the cap do not have to include the following types of low-wage foreign workers when calculating the cap:

  • LMIA-exempt foreign nationals working under Immigration, Refugees and Citizenship Canada’s International Mobility Program;
  • Foreign nationals who have received a nomination certificate from a Provincial Nomination Program; and
  • Foreign workers working in low-wage positions that are exempt from the cap.

 

Frequently Asked Questions

The following are samples of frequently asked questions that were reproduced from the TFWP Wiki below.  Please note that the information below was obtained through an Access to Information Act request, and may not be up to date.

Question – When considering the impact cap percentage, should an officer ’round’ to the nearest decimal point? Example, established cap is 10% and the impact cap is percentage is 10.1 to 10.5. Does ESDC round down to 10% and accept it, or does it just determine it exceeds the 10% cap?

Answer -When calculating the Cap or the Impact on Cap comparison calculations, the percentage should be recorded up to two decimal points, rounding accordingly.

 

Question – What should be done with LMIA applications where the employer has identified more than one location on the application – i.e. Employer A has applied for 15 workers for 3 different locations on 1 LMIA form? How will the cap be noted to ensure a cap rate is captured for each location on the LMIA form?

Answer – The employer must complete a separate application for each location of work in order for a cap to be established for each location; and each location will also have an individual cap comparison calculation to determine the effect of hiring requested TFWs based on the employer’s current staffing complement at the time of the submission of the application.

 

Question – How does previously confirmed but unfilled LMIAs (i.e. hired but who have not started work) affect the determination of business size and cap calculation?

Answer – Previously confirmed but unfilled LMIAs (that are not expired) are to be included as employees for determining the business size. Pending applications should not be included in these numbers.

 

Question – Should owners count themselves when determining their business size?

Answer – When determining if a business has 10 or more employees company-wide, the count should include all employees on payroll and the vacant position. If the owner has a paid position, they should be included.

 

 

Question – When calculating “Determining the Effect on the Cap”, does the 4 consecutive weeks prior to LMIA submission have to be the 4 weeks prior to the application date or can there be a gap?

Answer – Ideally there should be as small a gap as practically possible for the purposes of this calculation. According to the CAP Directive the employer should provide data from the 4-week period “immediately prior” to the date the application was signed. W-T is interpreting “immediately prior” as allowing up to a 2 week gap between when the application is signed and the four consecutive weeks used by the employer for determining the effect of the CAP. In addition, two weeks may also be allowed between when the application is signed and when the application is received.

 

Question – If the staffing complement listed on Schedule E changes between the date of signature and the date of assessment, how does the officer proceed with assessing the cap?

Answer – The effect calculation will be assessed based on the four-week period used prior to the date of signature, and NOT the date of assessment.


The Return of Incomplete Applications

One of the most frustrating experiences for people applying for visas is to have an application returned due to incompleteness.  Because of processing delays, it often takes Immigration, Refugees and Citizenship Canada (“IRCC“) months to return an incomplete application, and applicants have to then start over.  While the practice of returning incomplete applications was originally limited to IRCC, on June 20, 2014, the Ministry of Economic and Skills Development Canada (“ESDC“) released a Temporary Foreign Worker Program Bulletin titled “How to Handle Incomplete Applications.”

Continue reading “The Return of Incomplete Applications”



The Super Visa

Parents and grandparents of Canadian citizens and permanent residents can apply for two types of Temporary Resident Visas to visit their relatives in Canada.  The first is a standard, multiple-entry visa.  The second is what is known as a Super Visa.

A normal Temporary Resident Visa generally is a multiple entry-visa valid for the duration of an applicant’s passport, or 10 years, whichever is shorter.  Unless the Canada Border Services Agency authorizes indicates, it allows applicants to stay in Canada for up to six months without having to apply to extend their temporary resident status.

A Super Visa is also valid for up to 10 years, or the duration of the applicant’s passport, whichever is shorter.  It allows parents and grandparents to stay in Canada for up to two years without having to renew their status. Parents and grandparents who are from visa-exempt countries can also apply for Super Visas in order to receive Letters of Introduction that will allow them to stay in Canada for up to two years without having to renew their status.  It is important to note that the two year entry only applies to the initial stay.

A parents or grandparent is eligible for a Super Visa if the parent or grandparent has:

  • provided proof of the parent or grandparent relationship to the Canadian citizen or permanent resident;
  • undergone a medical examination and is admissible to Canada on health grounds;
  • provided satisfactory evidence of private medical insurance from a Canadian insurance company, valid for a minimum period of one year from the date of entry which:
    • covers the applicant for health care, hospitalization and repatriation;
    • provides a minimum of $100,000 coverage; and
    • is valid for each entry to Canada and available for review by the examining officer upon request; and
  • provided a written and signed promise of financial support, e.g. a letter of invitation, from the host child or grandchild for the entire duration the parent or grandparent intends to stay in Canada. The letter must be accompanied by evidence of their means of providing such support.

The Super Visa is meant to be a facilitate program, and if an applicant meets the Super Visa eligibility criteria, and is not otherwise inadmissible to Canada, Citizenship and Immigration Canada will normally issue the visa.

Continue reading “The Super Visa”


Four Year Cap on Temporary Foreign Workers

Please note that on December 13, 2016, the Government of Canada abolished the 4 year cap on foreign workers. 

capture

On April 1, 2011, Citizenship and Immigration Canada introduced a four-year cap on the maximum allowable cumulative duration that a Temporary Foreign Worker (“TFW”) can work in Canada.  Generally, once a foreign national has accumulated four years of work, he or she will be ineligible to work in Canada again until a period of four years has elapsed.

What Do Employers Need to Know

Before hiring a foreign worker, an employer should know the total time that the foreign worker has worked in Canada.  It would be unfortunate and costly to offer someone a job only to then discover that the person can either only work for a limited period, or not at all.

Example:

Since April 1, 2011, a TFW has accumulated three years of work in Canada, and is now applying for a two-year work permit in an occupation that is not listed in the ‘exceptions’. The work permit would only be issued for one year.

All work performed in Canada since April 1, 2011 — regardless of whether or not it was authorized by a work permit or exempt under Regulation 186 — counts towards a foreign worker’s four-year total. This includes work done as a volunteer, as a self-employed individual, work in all occupations falling under all categories in the National Occupation Code (“NOC”) list, work done while under implied status, and work done while on an open work permit, including post-graduate work permits.  The only exception is that any work performed during a period in which the foreign national was authorized to study on a full-time basis in Canada is not included in cumulative duration totals.

The cap does not only apply to people looking to start a new job or change employers.  It also applies to people who are looking to extend their contracts.

The Exemptions

Although their time in Canada will still count towards the four-year cap, numerous types of foreign workers will be able to work beyond four years.

The four-year cumulative duration will not apply to TFWs entering under one of the following occupations:

  • Workers seeking to work in NOC 0 or A occupations (important: NOC B is not exempted;
  • Workers who have applied for permanent residence and have received provisional approval;
  • Workers who are employed in Canada under an international agreement, such as NAFTA, the Seasonal Agricultural Worker Program, humanitarian and self-support based work permits, and work permits under Regulation 205; and
  • Workers who are exempt from holding a work permit under Regulation 186.

Gaps

Periods not worked which occurred after April 1, 2011, and during the validity period of any work authorizations issued after April 1, 2011, may be factored into the calculation of the accumulated total.  However, only gaps in employment of one consecutive month or more will be considered.

When the Clock ReStarts

The cap will start once four years are reached.  It does not matter if there is a significant gap during the foreign worker’s four years as a TFW.  As well, the foreign national has to wait for four consecutive years before he or she is allowed to become a foreign worker again.

Example

Foreign national works for three years, leaves Canada for three years, and applies for a two year work permit.  CIC will issue a one year work permit, and the foreign national will have to wait another four years before the clocks resets and he or she can apply again. If the foreign national had waited another year outside Canada, then he could have worked another full four years in Canada.

Example

A foreign national works for three years and 11 months on a work permit.  She then stays outside of Canada for three years, and then enters Canada to work for one months.  The foreign national leaves Canada and is now not eligible for a work permit for another four years.

Citizenship and Immigration Canada has published the following chart which may be useful to individuals trying to decide if the cap applies to them.

Appendix A Flow Chart described below


Procedural Fairness in LMIA Applications

Procedural fairness in Labour Market Impact Assessment (“LMIA“) applications is relatively low.  In Frankie’s Burgers, the first reported Federal Court decision on the matter, the Court stated that (citations removed):

The requirements of procedural fairness will vary according to the specific context of each case. In the context of applications by employers for [Labour Market Impact Assessments], a consideration of the relevant factors that should be assessed in determining those requirements suggests that those requirements are relatively low. This is because, (i) the structure of the [LMIA] assessment process is far from judicial in nature, (ii) unsuccessful applicants can simply submit another application, and (iii) refusals of [LMIA] requests do not have a substantial adverse impact on employers, in the sense of carrying “grave,” “permanent,” or “profound” consequences.

However, as noted in the Kuzol decision, while the duty of procedural fairness in a LMIA application may be at the low end of the spectrum, it is not non-existent.

Extrinsic Evidence

If an officer with the Department of Economic and Social Development (“ESDC“) relies on extrinsic evidence in reaching a decision, then there is a duty to disclose that evidence to the employer prior to the decision being made.

Extrinsic evidence does not include information that is publicly available on websites that are generally accessible to the public.

It does, however, include information derived from third parties that is not publicly available.  For example, in the LMIA context, if an ESDC officer calls a third party to confirm whether there is a labour shortage in an area, and the information that the third party contradicts what the employer submitted to ESDC, then the officer must provide the employer with an opportunity to respond to the information that the third party provided.


Canada Lifts Visa Requirement Against Mexico; Bulgaria, Romania, Brazil Soon to Follow

On December 1, 2016, the Government of Canada lifted the requirement that Mexican nationals obtain a temporary resident visa (a “TRV”) prior to travelling to Canada.  

As with all TRV exempt travellers, excluding Americans, Mexican nationals are still required to obtain an Electronic Travel Authorisation (an “ETA”) prior to boarding aircraft to travel to Canada.  
The Government of Canada has also committed to gradually expanding eTA eligibility in 2017 to citizens of Bulgaria, Romania, and Brazil. 

Electronic Travel Authorisation
 
The eTA is a new electronic document requirement for visa-exempt air travellers to Canada, excluding citizens of the United States. Travellers apply online for an eTA by providing basic biographical, passport and personal information, and includes questions about their health, criminal history, and travel history.

An automated system then compares this information against immigration and enforcement databases to determine if the traveller is admissible to Canada. The vast majority of applications are approved automatically, with a small percentage referred to an officer for review.  Typical reasons for a further review include a previous denial of admission to Canada, a criminal record, or a pending permanent residence application.

The cost to apply for an eTA is $7.00. Applicants must have a valid passport, credit card, and e-mail address.

An eTA is only required for travel to Canada by air. It is not required for travel to Canada by land or sea.

Mexican citizens who already have a valid TRV do not need to apply for an eTA while their TRV is valid.

Future Visa Lifting for Brazil, Romania, and Bulgaria

The Government of Canada has also committed to expanding eTA eligibility to travellers from Brazil, Bulgaria and Romania.

Starting on May 1, 2017, Brazillian, Romanian, and Bulgarian citizens who have held a Canadian temporary resident visa at any time during the last 10 years, or who, at the time of application, hold a valid nonimmigrant visa from the United States, will no longer need a TRV to visit Canada, and can instead apply for an eTA.

Starting December 1, 2017, the eTA eligibility will be expanded to include all Romanian and Bulgarian citizens.

More information about the lifting of the visa requirement for Mexican citizens, including the specific regulatory changes and the Government of Canada’s cost-benefit analysis, can be found here.

More information about the future lifting of the visa requirement for Brazilian, Bulgarian, and Romanian citizens, including the specific regulatory changes and the Government of Canada’s cost-benefit analysis, can be found here.

More information about how to apply for an eTA can be found here.

Please contact us if you have any questions or concerns about these changes.