Administrative Monetary Penalty Regime Coming to Foreign Worker Program

On July 1, 2015, the Government of Canada published regulations in the Canada Gazette that introduce an Administrative Monetary Penalty (“AMP“) regime into the Temporary Foreign Worker Program (“TFWP“) and the International Mobility Program (“IMP“).  Both Citizenship and Immigration Canada (“CIC“) and the Ministry of Employment and Social Development (“ESDC“) will administer the AMP.  In addition, the regulations will replace the exiting two-year ban period for employer non-compliance with 1, 2, 5, 10 year, and permanent bans. 

The amendments will take effect on December 1, 2015. 

The Administrative Monetary Penalty Regime

Under the new AMP regime, employer non-compliance will be divided into three types of violations.  

Type A violations will include where an employer:

• is unable to demonstrate that any information that it provided in respect of a work permit application was accurate during a period of six years beginning on the first day of the foreign national’s employment;
• did not retain document(s) that relates to employer compliance with cited conditions during a period of six years, beginning on the first day of the foreign national’s employment
• did not have sufficient resources to pay a live-in caregiver(s);
• could not demonstrate that any information that it provided for a Labour Market Impact Assessment (“LMIA“) application was accurate during a period of six years beginning on the first day of the foreign national’s employment;
• did not report at any time and place specified to answer questions and provide documents during an ESDC audit;
• did not produce required documents during an ESDC inspection; and
• did not attend any ESDC inspection, nor give all reasonable assistance to the ESDC officer conducting the inspection.

Type B violations will include where an employer:

• did not comply with federal and provincial laws that regulate employment;
• did not comply with federal and provincial laws that regulate the recruiting of employees in the province in which the foreign national works;
• did not provide the foreign national with employment in the same occupation and substantially the same, but not less favourable, wages and working conditions as outlined in the foreign national’s offer of employment;
• did not ensure that a live-in caregiver resided in a private household in Canada and provided child care, senior home support care or care of a disabled person in that household without supervision
• did not ensure that the employment of the foreign national would result in direct job creation or retention for Canadian citizens or permanent residents, if that was a factor that led to the issuance of the work permit;
• did not ensure that the employment of the foreign national would result in the development or transfer of skills and knowledge for the benefit of Canadian citizens or permanent residents, if that was a factor that led to the issuance of the work permit
• did not hire or train Canadian citizens or permanent residents, if that was a factor that led to the issuance of the work permit; and
• did not make reasonable efforts to hire or train Canadian citizens or permanent residents, if that was a factor that led to the issuance of the work permit.

Type C violations will include where the employer:

• was not actively engaged in the business in which the offer of employment was made, unless the offer was made for employment as a live-in caregiver;
• of a live-in caregiver did not provide the foreign national with adequate furnished private accommodation in the household; and
• did not make reasonable efforts to provide a workplace that was free of abuse.

Once ESDC and/or CIC has determined which type an employer’s violation falls under, it will assign points under the AMP regime based on the employer’s compliance history and the severity of the violation.

Points for the employer’s compliance history will be calculated as follows:

Points for the severity of the violation will be calculated as follows:

Severity of the Violation
Criteria	Points
The employer derived competitive or economic benefit from the violation.	0 – 6
The violation involved abuse of a foreign national.	0 – 10
The violation negatively impacted the Canadian labour market or the Canadian economy.	0 – 6
The employer did not make reasonable efforts to minimize or remediate the effects of the violation.	0 – 3
The employer did not make reasonable efforts to prevent recurrence of the violation.	0 – 3

ESDC and/or CIC will add the number of points based on the employer’s compliance history and the severity of the violation to determine the AMP.  In calculating the AMP, employers will be divided into “large businesses” and “small businesses.”  A “small business” is any business, including affiliated entities, that have fewer than 100 employees or less than $5,000,000 in annual general revenue.

For Type A violations, the size of the AMP will be as follows:

Type A
Points	Individual or Small Business ($)	Large Business ($)
0 or 1	None	None
2	500	750
3	750	1000
4	1000	2000
5	4000	6,000
6	8,000	10,000
7	12,000	20,000
8	20,000	30,000
9 or 10	30,000	45,000
11 or 12	40,000	60,000
13 or 14	50,000	70,000
15 or more	100,000	100,000

For Type B violations, the size of the AMP will be as follows:

Type B
Points	Individual or Small Business ($)	Large Business ($)
0 or 1	None	None
2	750	1,000
3	1,250	2,000
4	3,000	7,000
5	7,000	12,000
6	12,000	20,000
7	20,000	30,000
8	35,000	45,000
9 or 10	50,000	60,000
11 or 12	60,000	70,000
13 or 14	70,000	80,000
15 or more	100,000	100,000

For Type C violations, the size of the AMP will be as follows:

Type C
Points	Individual or Small Business ($)	Large Business ($)
0 or 1	None	None
2	1,000	2,000
3	5,000	10,000
4	10,000	20,000
5	15,000	30,000
6	20,000	40,000
7	35,000	50,000
8	45,000	60,000
9 or 10	60,000	70,000
11 or 12	70,000	80,000
13 or 14	80,000	90,000
15 or more	100,000	100,000

In addition to fines under the AMP, the number of points that an employer receives will determine the ban length as follows:

Total number of Points	Type A Violation	Type B Violation	Type C Violation
0 to 5	None	None	None
6	None	None	1 year
7	None	1 year	2 years
8	1 year	2 years	5 years
9 or 10	2 years	5 years	10 years
11 or 12	5 years	10 years	10 years
13 or 15	10 years	10 years	10 years
15 or more	Permanent	Permanent	Permanent

Where an employer fails to comply with multiple conditions, each unjustified failure to comply will be treated as a separate violation.  As well, violations of a single condition that involve more than one foreign worker will be treated as separate violations for each foreign worker affected. Finally, for conditions that have separate elements, a failure to comply with each element that is not justified will be treated as a separate violations.

Given how the size of the AMP can soar dramatically depending on the number of foreign workers involved and the number of condition(s) breached, the maximum AMP that ESDC and/or CIC can impose is $1,000,000.00 for a breach.  As well, the total AMPs imposed on a single employer cannot exceed $1,000,000 in the one-year period preceding the date of the final determination. As well, ESDC will allow employers to enter into payment agreements where an employer cannot pay the AMP immediately in one instalment.

There is no limitation on the collections period for AMPs, and new LMIA and work permit applications will not be accepted if an employer has not paid an AMP or is not complying with a payment agreement if one has been entered into.

Justification and Voluntary Disclosure

The Government of Canada’s amendments specify in legislation that the purpose of the new regime is to encourage compliance with the TFWP and IMP, and not to punish employers. As such, non-compliant employers will not face bans or monetary penalties where the non-compliance was the result of good faith or unintentional errors in interpretation, accounting, or administration.

As well, if the employer voluntarily discloses non-compliance, then ESDC, at an officer’s discretion, may reduce the number of points, depending on the circumstances.

Best Practices

The Government of Canada’s amendments state that the AMP and new fine regime will not apply to non-compliance that occurred before December 1, 2015.  ESDC has also published an Employer Compliance Guide which contains best practices for complying with the TFWP.  All employers of foreign workers in both the TWFP and the IMP should read this guide.

The Employer Compliance Guide is for the most part a summary of existing policy.  However, it does clarify for the first time when raises to foreign workers will result in non-compliance.  In brief, pay increases resulting from good performance or pay increments that are greater than 2% or the rate of inflation will only be acceptable if this was advertised as part of the employer’s recruitment efforts and the increases apply to all employees working in the same occupation.

More information about the new AMP and ban regime can be found here.

The Employer Compliance Guide can be found here.

We have reproduced the internal ESDC Inspections Manual here:

IESDC Inspection Policy dated27 Feb 2015 s

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