Labour Market Impact Assessments- Prevailing Wage

In order to obtain a positive Labour Market Impact Assessments, an employer must commit to paying a prospective foreign worker at least the prevailing wage for an occupation in a geographic area.  The prevailing wage is set by Employment and Skills Development Canada (“ESDC”)/Service Canada.  It is a very strict requirement, and Service Canada officers currently have no discretion to vary it.

The Working in Canada Website

The Prevailing Wage for a position can be found on the Wages section of the Working in Canada website, here – http://www.workingincanada.gc.ca/wage-outlook_search-eng.do?reportOption=wage This website is also used by provincial nomination programs to determine the Market Rate for a position, as well as in economic class immigration applications to determine whether a wage accurately reflects a position’s duties.

The Working in Canada website lists the Low, Median, and High salary for nearly every occupation in every region of the country.  The Prevailing Wage is equal to the Median wage for a position.

For example, if you were trying to determine what the Prevailing Wage for a Civil Engineer in Vancouver is, you would enter that job title into the search field, locate the appropriate geographic region, and identify the Median Wage.  I have demonstrated this below.

Explore Careers   Wage Report   Working in Canada

The LMIA application will be refused if the Median / Prevailing Wage is not paid.

International Graduate Variation

While International Graduates were previously exempted from the prevailing wage requirement, this is no longer the case.

Prevailing Wage is Retroactive

It is important to note that although LMIIA application requirements lock-in during processing, the Prevailing Wage does not.  As well, although it again does not impact advertising, Service Canada can vary the prevailing wage if it feels that the Working in Canada website is wrong.  This can be demonstrated in the following Service Canada Business Expertise Question & Answer.

Please note that what I have reproduced in the blockquote below should not be viewed as legal advice.  I obtained a copy of this internal Service Canada question and answer through an Access to Information Act request (the “ATI”).  The reproduction of question and answer has not occurred with the affiliation of the Government of Canada, nor with the endorsement of the Government of Canada.  (I have decided not to reproduce the names of the Service Canada officers involved.) Please e-mail me if you want a copy of the original question and answer contained in the ATI.

BACKGROUND:

Recv’d two applications-one kitchen helper (6641) and cook (6242 for same ER.

QUESTION/ISSUE:

During processing, notice that the wage for the Cook per WiC Median at Territoy level = $13.93/hr.

The low skill trade Kticehn helper. makes $15.00 per WiC, NWT level.

How do I proceed when the kitchen helper would be making more than the cook? Is this an error?

OFFICER & TL RECOMMENDATIONS:

Have no recommendations; just think this is an error and wish to double check;

Need to straighten this out before complete file assessment is done

BE CONSULTANT RESPONSE:

Human Resource and Skills Development Canada (HRSDC) has reviewed the wages currently posted on the Working in Canada (WIC) website for NOC 6641 (Food Counter Attendants, Kitchen Helpers and Related Occupations) and NOC 6242 (Cooks) for the Northwest Territories. The median wage ($13.93/hour) for NOC 6242 was determined based on 2006 census data. However, based on a review of HRSDC El data, the median wage for NOC 6242 in the Northwest Territories will be adjusted to $18/hour. The median wage of $15/hour for NOC 6641 was also reviewed using HRSDC El data, but the wage was deemed reliable in comparison to other sources currently available.

RECOMMENDATION:

To consider NHQ-LMI’s median wages for the Northwest Territories of $18.00/hour for NOC 6242 (updated) and continue to apply (existing) $15.00/hour for NOC 6641.

In addition to Prevailing Wage being retroactive, as of December 31, 2013, the LMO application forms require that employers attest that they will constantly monitor the above site, and increase their foreign worker’s pay should Prevailing Wage increase during the course of employment.

Prevailing Wage Alone Insufficient

On October 20, 2014, ESDC quietly changed the prevailing wage requirement to add that if prevailing wage is below the wage range that employers pay their Canadian staff, then they must pay foreign workers a wage within the range.  Hence, as reproduced from the ESDC website, the four steps to determining wage are:

Step 1:

Determine if the available position is unionized or non-unionized,

  • If the position is unionized, proceed to the Unionized Positions section.
  • If the position is non-unionized, proceed to step 2.

Step 2:

Use the job title of the available position to conduct a search on Job Bank to determine the median wage for the occupation and work location where the TFW will be employed.

  • If the median wage is available on Job Bank, proceed to step 3.
  • If the median wage is listed as “N/A” for the local area (economic region) where the work is located, employers should consult the provincial/territorial level wage. If this wage is not available, employers should consult the national wage.

Step 3:

Determine if there are any workers currently employed in the same occupation and work location where the TFW will be employed.

  • If yes, proceed to step 4.
  • If no, proceed to the Prevailing Wage section.

Step 4:

Determine the wage range paid to the current employees working in the same occupation and work location where the TFW will be employed.

  • If the wage range paid to these current workers is higher than the prevailing wage on Job Bank, employers must pay theTFW a wage that is above the prevailing wage and within the wage range.
  • If the wage paid to these workers is lower than the prevailing wage on Job Bank, proceed to the Prevailing Wage section.

Internal Policy

Below is the current ESDC internal policy on Prevailing Wage.

I would like to thank Jacobus Kriek, an immigration consultant with Matrixvisa Inc., for providing me copies of the internal Service Canada directives that he has obtained.

Please note that what I have reproduced below should not be viewed as legal advice by ESDC or Service Canada.  The reproduction of the material below has not occurred with the affiliation of the Government of Canada, nor with the endorsement of the Government of Canada. As well, given the nature of relying on internal documents, some of the information may be out of date.

Changing Policy Around Prevailing Wage

As many employers are discovering, ESDC is starting to move beyond the wage range paid to Canadians and the Working in Canada website to determine prevailing wage.  It is exploring internal alternatives to determine Labour Market Information, and it probably behooves applicants to provide their own wage data as well. As shown in the internal document obtained through ATI below, ESDC is instructing officers that the wage floor will be the highest wage data, however, as with all administrative tribunals, applications are fact specific and what is reasonable will prevail.

Babic v. Canada,  2016 FC 174

In Babic v. Canada, the Federal Court stated the following which almost turns the predictability of the prevailing wage methodology on its head.

The Officer determined that the employer did not offer enough when he set the wage rate for a carpenter who was also a welder. The Applicant says this is unfair and he met the wage guideline. He says he exceeded it by offering $25 per hour.

To that end, the Applicant says he looked at the guideline-posted median wage rate for carpenters in Toronto, which was $22 per hour, and the median wage rate for welders which was $21.53 per hour. He then offered $25 per hour and said it is “well above what you request in your guidelines”. This misses the point that simply averaging the wage rates of each individual trade and then increasing that amount slightly does not necessarily take into account whether the resulting amount is an appropriate wage rate for someone with the combination of skills the Applicant seeks. There is no evidence as to the hourly rate paid to the employee of the previous subcontractor. That might have been useful information for the Applicant to submit to the Officer.

The Officer noted the Applicant had indicated the TFW would work largely by himself and therefore two years’ experience was required. Of the 13 carpenters the Applicant currently employed none had welding skills and the pay ranged from $19-$30 per hour. According to the Applicant a Carpenter was paid $25 per hour after “a year or two” if they were good. The Officer fairly noted this was the same rate being offered to the TFW and so there was no premium paid for the additional required skills of some welding experience. It was, on this basis, reasonably open to the Officer to find as she did that “the wage offering was insufficient to attract a qualified Canadian/PR to apply”.

Presumably it can go the other way as well.


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