On September 24, 2014, the Ministry of Economic and Social Development Canada (“ESDC“) posted on its website a discussion paper titled “Regulatory proposals to enhance the Temporary Foreign Worker Program and International Mobility Program compliance framework.” ESDC appears to recognize that the existing legal authority to ban a non-compliant employer for two years and revoke associated Labour Market Impact Assessments (“LMIA“) may be too severe in some circumstances and not severe enough in other cases. As such, the Government of Canada is proposing to introduce some compliance activities that are preventative and educational in nature, and others where the penalty for non-compliance is more severe. Specifically, ESDC is proposing to expand the range of bans from two years to include one, five, and ten year bans.
As will be seen below, however, there appears to be alot more “stick” than “carrot” in ESDC’s approach.
Stronger Standards for Compliance
The Immigration and Refugee Protection Regulations (“IRPR“) currently provide that non-compliance will not result in negative legal consequences to an employer if the employer’s non-compliance is justified. Regulation 203(1.1) of IRPR states that:
Justification
(1.1) A failure to satisfy the criteria set out in subparagraph (1)(e)(i) is justified if it results from
(a) a change in federal or provincial law;
(b) a change to the provisions of a collective agreement;
(c) the implementation of measures by the employer in response to a dramatic change in economic conditions that directly affected the business of the employer, provided that the measures were not directed disproportionately at foreign nationals employed by the employer;
(d) an error in interpretation made in good faith by the employer with respect to its obligations to a foreign national, if the employer subsequently provided compensation — or if it was not possible to provide compensation, made sufficient efforts to do so — to all foreign nationals who suffered a disadvantage as a result of the error;
(e) an unintentional accounting or administrative error made by the employer, if the employer subsequently provided compensation — or if it was not possible to provide compensation, made sufficient efforts to do so — to all foreign nationals who suffered a disadvantage as a result of the error;
(f) circumstances similar to those set out in paragraphs (a) to (e); or
(g) force majeure.
ESDC plans on introducing regulatory amendments so that negative legal consequences could be imposed on non-compliant employers regardless of whether they take corrective action. The discussion paper states:
Specifically, non-compliance resulting from good faith errors and unintentional accounting or administrative errors would be subject to consequences such as an administrative monetary penalty (“AMP“) and/or a ban, and the employer’s name would be published. The employer’s response to the violation (e.g., repaying wages) would be taken into account in determining the AMP amount or the length of the ban so that there is still an incentive for the employer to take corrective action.
Justifications related to force majeure and changes to federal or provincial laws, collective agreements, and economic conditions (e.g., a temporary foreign worker’s hours are reduced below what was stated on the job offer due to an economic downturn that reduced the hours of all workers) would not be changed. Sanctions such as AMPs and bans would not be issued to non-compliant employers when a justification applies.
Proposed Administrative Monetary Penalty System and Bans
AMPs are financial penalties imposed in response to the contravention of legislative or regulatory requirements. They are a form of administrative sanction, as opposed to being a criminal sanction. As seen with the Government of British Columbia’s decision to introduce regulatory penalties for drinking & driving offences, the switch from a criminal to administrative penalty regime often means that there are less procedural safeguards, and that penalties are more widely imposed. A current federal government example where AMPs are widely used is in Customs Act seizures.
ESDC is proposing that the minimum AMP amount for breaching the Temporary Foreign Worker Program be $500, and the maximum amount payable for a single amount be $100,000. Penalty amounts will vary depending on whether the employer is an individual or small business, or a large business or corporation, as well as the employer’s compliance history and the severity of the violation. As well, the discussion paper states:
In cases where an employer is found non-compliant with more than one condition, the AMP amounts would be calculated separately and added together to produce the total amount payable. When a violation affects more than one foreign national, each foreign national would be treated as a separate case and the resulting penalties would be added together. For example, if a violation affects five foreign nationals and results in an AMP of $10,000 in each case, the total penalty payable would be $50,000.
The names of all employers found non-compliant and issued an AMP would be published to ensure that potential foreign workers and the general public are aware that the employer has not complied with Program conditions.
A “small business” is defined as any business, including its affiliates, that has fewer than 100 employees or less than $5-million in annual gross revenues.
As well, and as noted above, ESDC is proposing to introduce bans of one, five, and ten years to the TFWP for non-compliance. It is also considering permanent bans. The discussion paper also states that:
In cases where an employer is found non-compliant with more than one condition, the ban lengths would be calculated separately and the longest resulting ban would be applied. When a violation affects more than one foreign national, bans would not be cumulative as with AMPs. For example, if a violation affects five foreign nationals and results in a ban of five years in each case, the total ban would be five years.
Calculating the Bans
ESDC has reproduced the following table on its website which demonstrates the three levels of non-compliance. For ease of reading, I have removed the legislative references for each type of breach.
|
Type A |
Type B |
Type C |
| Must be able to demonstrate that all information on LMIAs was accurate during the previous 6 years | Must demonstrate efforts to hire and train Canadians/PRs, if that was a condition that led to a positive LMIA | Must demonstrate reasonable efforts to provide a workplace free of abuse |
| Must be able to demonstrate that all information provided for employer-specific work permit applications was accurate | Must demonstrate that Canadians/PRs have been hired or trained, if that was a condition that led to a positive LMIA | For Live-in Caregiver Program: Must demonstrate that adequate furnished private accommodation has been provided to the foreign national |
| Must attend any inspection, unless no prior notification was provided | Must demonstrate job creation or retention for Canadians/PRs, if that was a condition that led to a positiveLMIA | Must demonstrate that the employer is actively engaged in the business in which the job offer was made |
| Must provide relevant documents to be examined as requested | Must demonstrate skills and knowledge transfer to Canadians/PRs, if that was a condition that led to a positiveLMIA | |
| For Live-in Caregiver Program: Must demonstrate sufficient resources to pay wages | Must report any time and place with requested documents for the purposes of an inspection | |
| Must retain all documents relevant to demonstration of compliance with conditions for 6 years, beginning on the first day of the foreign national’s employment: | Must comply with and remain in compliance with all federal, and provincial laws on employment and recruitment | |
| For Live-in Caregiver Program: Must demonstrate that foreign national cares for a child, senior or disabled person | ||
| For Live-in Caregiver Program: Must demonstrate that foreign national resides in the household | ||
| Must demonstrate that all foreign nationals have been provided with the same occupation and substantially the same, but not less favourable, wages and working conditions, as outlined in the job offer |
The Points System
Apparently not wanting to be accused of keeping things simple, ESDC is proposing a points system to determine the AMP and ban length. The first step to calculate points is the employer’s history of offences. The discussion paper states:
|
Criteria |
Points |
| For Type A and B violations, the violation is a first offence | +1 |
| For Type A and B violations, the violation is not a first offence | +2 |
| For Type C violations | +2 |
The second step is to calculate the severity of the offence.
|
Criteria |
Points |
| The employer derived competitive or economic benefit | +1 to +3 |
| The violation involved significant financial harm to a foreign national | +1 to +4 |
| The violation involved abuse of a foreign national (e.g., physical or psychological harm) | +1 to +6 |
| The violation negatively affected the Canadian labour market | +1 to +6 |
| For the conditions to demonstrate LMIA accuracy (section 209.3(1)(c)(i)) and work permit accuracy (section 209.2(1)(b)(i), the violation involved a deliberate attempt to mislead through inaccurate information and would have affected the decision to issue an LMIA or work permit | +6 |
| The employer did not make reasonable efforts to mitigate or reverse the impact of the violation, where possible.* | +2 |
| The employer has not taken steps to prevent recurrence of the violation | +2 |
| Other factors (to be listed in the Notice of Violation) | +1 to +6 |
The proposed AMP amounts and ban lengths are:
|
Type A |
||
|
Points |
Individual or Small Business |
Large Corporation |
| 1 | $500 | $750 |
| 2 | $750 | $1,000 |
| 3 | $1,000 | $2,000 |
| 4 | $5,000 | $10,000 |
| 5 | $10,000 | $20,000 |
| 6 | $15,000 | $30,000 |
| 7 | $20,000 | $40,000 +1 or 2 year ban |
| 8 or more | $100,000 +5 or 10year ban | $100,0005 or 10-year ban |
|
Type B |
||
|
Points |
Individual or Small Business |
Large Corporation |
|
1 |
$750 | $1000 |
|
2 |
$1250 | $2,000 |
|
3 |
$10,000 | $20,000 |
|
4 |
$20,000 | $35,000 |
|
5 |
$35,000 | $50,000 |
|
6 |
$50,000 +1 year ban | $65,000 +1 year ban |
|
7 |
$65,000 +2 year ban | $80,0001 or 2 year ban |
|
8 or more |
$100,000 +5 or 10 year ban | $100,000 +5 or 10 year ban |
|
Type C |
||
|
Points |
Individual or Small Business |
Large Corporation |
|
1 |
n/a | n/a |
|
2 |
$2,500 | $4000 |
|
3 |
$25,000 | $50,000 |
|
4 |
$35,000 | $60,000 |
|
5 |
$45,000 +1 year ban | $70,000 +1 year ban |
|
6 |
$60,000 +2 year ban | $80,000 +2 year ban |
|
7 |
$80,000 +5 year ban | $90,000 +5 year ban |
|
8 or more |
$100,00010 year ban | $100,00010 year ban |
Considering that the above fines are per foreign worker, it is not difficult to see AMPs in the millions being imposed.
It is also not difficult to envision upcoming litigation.