Report finds 94% of employers compliant with TFWP regulations

Employment and Social Development Canada (ESDC) has released the findings of employer inspections in the 2022-2023 fiscal year.

The report found that there was a 94% compliance rate among the 2,100 employers surveyed. The 6% who were found non-compliant are listed on the Immigration Refugees and Citizenship Canada (IRCC) website.

ESDC is responsible for ensuring that employers who hire Temporary Foreign Workers (TFWs) are complying with the conditions of the Temporary Foreign Worker Program (TFWP).

Among the 116 non-compliant employers, 93 were required to pay a monetary penalty, 23 were issued a warning, and seven employers are now banned from using the program, some for up to five years.

Of note, two employers in the transport sector were issued fines of over $100,000 for failing to provide adequate wages and safe working conditions. A construction company was also given a $53,000 fine.

The report follows new regulations that were introduced to the TFWP in 2022. ESDC says these regulations enhance the program’s ability to conduct inspections and increase overall compliance by helping employers adhere to the rules and holding them accountable.

The government says that going forward, ESDC will provide updates on TFWP compliance efforts on a semi-annual basis. This will help potential employees identify reputable companies.

What are the regulations?

The TFWP allows Canadian employers to hire foreign workers if they can demonstrate that they genuinely cannot find adequate labour, or enough of it, in Canada.

To do this, all employers must get a Labour Market Impact Assessment (LMIA) from ESDC. This is a document in which the employer outlines the economic impact of hiring a foreign worker. If ESDC deems that hiring TFWs will have either a neutral or positive impact on Canada’s economy, they may be eligible to hire TFWs.

Workers in the TFWP are on closed work permits. This means they are only allowed to work for one employer in Canada. To help avoid abuse and exploitation of employees TFWP employers are obligated to follow rules under the Immigration and Refugee Protection Regulations (IRPR).

These conditions are in place to ensure that TFWs are paid appropriate wages and provided with safe working conditions that ensure their life or safety is never at risk. Employers must also provide appropriate accommodation and follow health protocols, such as those related to COVID-19.

Employers will also be considered in violation of IRPR if a TFW is a victim of abuse.

Employers must pay TFWs according to a low-wage or high-wage scale. A high-wage employee is expected to make a median wage that differs depending on the province.

Employers seeking to fill high-wage positions must also include proof that they are investing in either training Canadian citizens to fill the labour gap that necessitated a TFW, or they may show how they are going to help the TFW become a permanent resident.

Employers who are hiring for a low-wage position must meet the following conditions

• pay for round-trip transportation for the temporary foreign worker;
• ensure affordable housing is available;
• pay for private health insurance until workers are eligible for provincial health coverage;
• register the temporary foreign worker with the provincial/territorial workplace safety board; and
• provide an employer-employee contract.

To reduce employer reliance on TFWs, the Government of Canada has capped the number of low-wage temporary foreign workers that a business can employ. For example, Employers with 10 or more employees applying for a new LMIA are subject to a cap of 10 percent on the proportion of their workforce that can consist of low-wage temporary foreign workers.

Additionally, some low-wage occupations may be refused for LMIA processing.

Incentives to follow the rules

In September, ESDC introduced a Recognized Employer Pilot (REP) program for repeat TFWP employers who have a history of demonstrating compliance with TFWP rules and regulations.

The main benefit will be a reduction in administrative work associated with applying for an LMIA as REP participant’s LMIA will be valid for 36 months.

• According to ESDC, other benefits include
• a simplified application process for future LMIA applications for positions on the Canadian Occupational Projection System (COPS) list;
• fewer points of contact between participating employers and ESDC during the pilot due to simplified LMIA forms that enable employers to hire additional TFWs for genuine job offers during REP; and
• a Job Bank designation that shows their recognized status to improve interest from prospective workers.

To be eligible, employers must have at least three positive LMIAs for the same occupation over the past five years from a list of occupations designated as in-shortage and supported using COPS data.