Labour Market Impact Assessment
In most cases, a Canadian employer wishing to hire a foreign worker must first receive government approval before the hiring can take place.
This comes in the form of a Labour Market Impact Assessment (LMIA), formerly known as a Labour Market Opinion (LMO).
In order to receive a positive LMIA, the Canadian government employee reviewing an application must determine that the hiring of a foreign worker will have a positive or neutral effect on the Canadian labour market. Among other factors, it must be clear that no qualified Canadians were passed up in favour of the foreign worker, and that the foreign worker will be given a salary and benefits that meet federal and provincial standards.
The LMIA process is different depending on whether the targeted employee is classified as “high-wage” or “low-wage”. Temporary foreign workers being paid under the provincial/territorial median wage are considered low-wage, while those being paid at or above are considered high-wage. Depending on whether a prospective employee is classified as high-wage or low-wage, certain specific provisions apply.
Generally speaking, all Canadian employers must provide evidence that they have attempted to find qualified Canadian citizens or permanent residents to fill job positions before turning to foreign workers. In addition, employers may be inspected for compliance to government regulations after their employee has begun working in Canada.
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- High-Wage Workers
- Median Hourly Wages by Province/Territory
- Low-Wage Workers
- Expediting a LMIA
- Advertising Requirements
Employers seeking to hire high-wage workers must submit transition plans along with their Labour Market Impact Assessment (LMIA) application to ensure that they are taking steps to reduce their reliance on temporary foreign workers over time. High-wage workers are those earning above the median hourly wage for a given occupation in specified region.
The transition plans are designed to ensure that employers seeking foreign workers are fulfilling the purpose of the program. This entails that they are using the program as a last and limited resort to address immediate labour needs on a temporary basis when qualified Canadians are not available, ensuring that Canadians are given the first chance at available jobs.
Certain occupations in Quebec are "facilitated", meaning that local recruitment efforts do not need to be performed by employers as part of their applications to hire temporary foreign workers for any of the facilitated occupations. Learn more about work permits in Quebec and which occupations are facilitated in Quebec.
Employers seeking to hire low-wage workers do not need to submit transition plans with their Labour Market Impact Assessment (LMIA). They must, however, follow a different set of guidelines.
To restrict access to the Temporary Foreign Worker Program (TFWP), while ensuring that Canadians are always considered first for available jobs, the Government of Canada has introduced a cap to limit the number of low-wage temporary foreign workers that a business can employ. Furthermore, certain low-wage occupations may be refused for LMIA processing. 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. This cap will be phased in over 2015 and 2016 in order to provide employers who are above the 10 percent cap time to transition and adjust accordingly.
Employers offering a wage that is below the provincial/territorial median hourly wage must:
- 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.
As of April 30, 2015, the Temporary Foreign Worker Program uses the latest Labour Force Survey results for the unemployment rates in regions across Canada. These rates determine which regions are eligible for employers to submit Labour Market Impact Assessments (LMIAs) for low-wage/lower skilled occupations in the Accommodation and Food Services sector and the Retail Trade sector. LMIA applications for these sectors will not be processed in economic regions where the unemployment rate is 6 per cent or higher.
Given its unique labour market conditions, and as requested by the Government of the Northwest Territories, applications in these sectors for positions located in Yellowknife will be accepted for processing.
Expediting a LMIA
LMIAs will be provided within a 10-business-day service standard for workers in the following occupational categories:
- Highest-demand occupations
The 10-day service standard for this category is limited to skilled trades positions where the wage offered is at or above the provincial/territorial median wage. These positions are essential to the development of major infrastructure and natural resource extraction projects, and are therefore considered vital to Canadian economic growth.
- Highest-paid occupations
The 10-day service standard for this category is limited to employers hiring temporary foreign workers in the highest-paid occupations that offer wages in the top 10 percent of wages earned by Canadians in a given province or territory where the job is located. This wage level indicated that a temporary foreign worker is the highest-skilled in their occupation, and that those skills are difficult to find in the Canadian labour market.
- Shortest-duration occupations
The 10-day service standard for this category is limited to employers requesting temporary foreign workers for a short duration, defined as 120 calendar days or less, in any occupation where the wage offered is at or above the provincial or territorial median wage. Positions falling under this category include those related to repairs or manufacturing equipment and warranting work.
After receiving a positive LMIA, the employer should send a copy to their identified foreign worker. The positive LMIA must be included in the worker’s application for a Temporary Work Permit.
A single LMIA can be issued for one or multiple employees. In the case of multiple employees, the LMIA will only be issued to employees who will be filling identical positions as identified by the Canadian National Occupation Classification.
There are several instances where an employer may be exempt from the requirement to secure a LMIA. For more information on LMIA Exemptions, please click here.
To find out if you or your business is eligible to apply for a LMIA, please contact us today.
Employers wishing to hire a temporary foreign worker to Canada must pay a processing fee of CDN $1,000 for each request for a Labour Market Impact Assessment. There is also be an additional $100 privilege fee on employers charged by Employment and Social Development Canada.
English and French are the only languages that can be determined as job requirements, both for LMIAs and for job vacancy advertisements, unless the employer can prove that another language is otherwise required for the position.
In addtion, employers must advertise all job vacancies across the Canadian job market for at least four weeks before applying for a LMIA. Towards this end, employers are required to prove that they have used at least two other recruitment methods in addition to having posted an advertisement on the Canada Job Bank. Employers must focus advertising efforts on groups of Canadians who are under-represented, such as First Nations or persons with disabilities.
Employers are also required to submit a transition plan to ESDC, along with the application for a LMIA, for high-wage positions. This transition plan should indicate how the company plans to reduce its reliance on temporary foreign workers in the future. Proof of investment in skills training or hiring Canadian apprentices are examples of how employers can prove this. Alternatively, employers can demonstrate how they are assisting their high-skilled temporary foreign worker(s) in becoming Canadian permanent residents. If the employer is chosen for an inspection, or if they apply to renew their LMIA, they will be required to report on the progress of the transition plan that they have submitted.
Employers are required to attest to their awareness that they are prohibited from laying off or cutting the hours of Canadian workers working in the same postion(s) as the temporary foreign worker(s) working at the company.
There are a number of variations to the aforementioned advertising requirements. Click here to learn more.