There would be perhaps few things as frustrating for the potential employers of foreign workers than to go through the Labour Market Impact Assessment process only to learn that they were not considered to be an employer by the Department of Employment and Social Development Canada.
According to the Temporary Foreign Worker Program manual, an employer is an entity (e.g. person, business, corporation or organization) that makes an offer of employment to one or more foreign nationals who provide labour in return for compensation for a specified period of time. The employer is generally the entity that hires, controls working conditions and remunerates the foreign national.
The Manual further states:
Entities Considered the Employer of a Foreign National under the TFW Program:
Canadian-Based Entity
A person, business, corporation or organization based in Canada that makes an offer of employment to one or more foreign nationals.
Foreign-Based Entity
A person, business, corporation or organization that is not based in Canada that makes an offer of employment to one or more foreign nationals to work in Canada. For identification purposes, it is strongly recommended that the foreign-based employer obtain a Canadian business number to facilitate the TFW Program’s assessment of their genuineness.
Group of Employers
In cases where two or more entities are determined to share employer responsibilities by the Department, a group of employers may make an offer of employment to a foreign national.
• All parties handling employer responsibilities relating to the employment of a foreign national (via an LMIA) are considered to be part of a group of employers for the purpose of the TFW Program.
• The Department determines who is able to apply under a Group of Employers, including whether employers should be included or excluded based on the relation to the foreign worker being offered a position.
The roles and responsibilities of each party must be clear and defined at the time of application,
including whether employment responsibilities are occurring sequentially or simultaneously
(including a defined period where the foreign national would be reporting to a specific entity).
• All parties may be held jointly responsible in cases of non-compliance.
Independent Contractors
For the purpose of the TFW Program, in cases where a self-employed foreign national’s services have been contracted by a Canadian company, and the self-employed individual is offering their services exclusively to that firm and is required to perform work within Canada, the contract should be evaluated as the job offer. The contracting firm is considered to be the employer.
Self-employed – Operation of a business in Canada (owner-operator)
For the purpose of the TFW Program, in cases where a self-employed individual wishes to enter Canada to establish or purchase a business and be involved in its day-to-day operations, the business plan or contract to purchase shares in a business should be evaluated as the job offer
Ownership of shares does not guarantee that a foreign national would qualify as an owner operator. The term owner-operator generally refers to small business owners and does not refer to individuals who receive shares as part of a compensation package. To qualify as an owner-operator the foreign national should be able to establish a level of controlling interest in the business (e.g. a majority or plurality of shares, is not able to be fired) and be actively involved in its operation. Foreign nationals who do not meet this definition would not qualify for the Program exemptions under owner-operator.
Entitities Not Considered the Employer of a Foreign National under the TFW Program
Canadian Company contracting services to a foreign firm
A Canadian company that is engaged in business (e.g. contracting services or partners) with a foreign based company that employs a foreign national is not the employer and as such should not submit the LMIA application on behalf of the foreign-based company.
Parent Company
In situations where an employer is legally owned by a parent company, but the parent company does not have day-to-day control over business operations that the TFW would be involved in, the parent company would not be considered the employer.
Third-party Representatives