Labour Market Impact Assessment
A Canadian employer wishing to hire a foreign worker must first receive government approval before hiring in most circumstances.
This comes in the form of a Labour Market Impact Assessment (LMIA), formerly known as a Labour Market Opinion (LMO).
To receive a positive LMIA, the Canadian government employee reviewing an application must determine that hiring a foreign worker will positively or negatively affect the Canadian labor market. It must be evident that no eligible Canadians were passed up in favor of the foreign worker, among other factors. 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.” For example, 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. In addition, certain specific provisions apply depending on whether a prospective employee is classified as high-wage or low-wage.
Typically talking, all Canadian employers must confirm that they have attempted to discover qualified Canadian citizens or permanent residents to serve job positions before shifting to foreign workers. In addition, employers may be checked for compliance with government regulations after their employee has started working in Canada.
Employers aiming to hire high-wage workers must present transition plans along with their Labour Market Impact Assessment (LMIA) application to confirm that they are taking steps to lower their reliance on temporary foreign workers over time. High-wage workers earn above the median hourly wage for a shared occupation in a specified region.
The growth plans are designed to assure that employers aiming for foreign workers fulfill the program’s goal. This entails using the program as a last and limited resort to address immediate labor needs temporarily when qualified Canadians are not available, ensuring that Canadians are given the first chance at available jobs.
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 ten 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 to let employers above the 10 percent cap time change 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 territories 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. As an outcome, LMIA applications for these sectors will not be processed in economic regions where the unemployment rate is 6 percent or higher.
Expediting an 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 developing major infrastructure and natural resource extraction projects and are 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 labor 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 salary. Positions falling under this category include repairs or manufacturing equipment and warranting work.
After receiving a positive LMIA, the employer should send a copy to their identified foreign worker. In addition, 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 numerous employees, the LMIA will only be issued to employees filling identical positions as identified by the Canadian National Occupation Classification.
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 addition, employers must advertise all job vacancies across the Canadian job market for at least four weeks before applying for an 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. Finally, employers must focus advertising efforts on groups of Canadians 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 an 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. For example, proof of investment in skills training or hiring Canadian apprentices shows how employers can prove this. Alternatively, employers can demonstrate how they assist 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 must attest to their awareness that they are prohibited from laying off or cutting the hours of Canadian workers working in the same position(s) as the temporary foreign worker(s) working at the company.
When our phone is busy, or you don’t have time
Growth through innovation/creativity. Rather than be constrained by ideas for new products, services and new markets coming from just a few people, a Thinking Corporation can tap into the employees.January 14, 2022
Says Morgan Fraud, the author of The Thinking Corporation, “Given that we are all capable of contributing new ideas, the question becomes how do you successfully generate, capture, process and implement ideas?” Becoming an organization capable of answering this question can benefit in a number of waysJanuary 18, 2022
Many businesses, large and small, have a huge source of great ideas that can help them improve, innovate, and grow, and yet so many of these companies never think of using this amazing corporate asset. What is this highly valuable asset? Its own people.January 22, 2022
Supported by a robust sales force and tight cost controls, Pharm Ltd. experienced sustained double-digit growth over a number of years, only to find that their supply chain struggled to keep pace.February 9, 2022