6 Key Changes to the Temporary Foreign Worker Program: What Canadian Employers Need to Know

tfwp1In 2014, it has been next to impossible to read or watch a Canadian news report that didn’t include one story or another about an employer exploiting the federal Temporary Foreign Worker Program (TFWP). While the TFWP was created as a last (and limited) resort to allow employers to bring foreign workers to Canada on a temporary basis to fill jobs when qualified Canadians were not available, the unfortunate reality was that a number of employers built their business model on the program.

In an effort to curtail such employer abuses, the federal government recently announced what it described as a “comprehensive overhaul” of the program. This overhaul includes a number of reforms designed to increase clarity and transparency, restrict access to the TFWP, and establish stronger enforcement and tougher penalties.

Given the volume of information out there about the TFWP, however, employers may be unclear as to how the program has changed, and how those changes affect their business. While the federal government has provided several informative resources for employers who hire foreign workers, we thought it would be helpful to summarize what we see as the “highlights” of the new TFWP. Here are our top 6:

1. The labour market test that allows employers to bring temporary foreign workers to Canada has been transformed from a Labour Market Opinion (LMO) to a new Labour Market Impact Assessment (LMIA) process that is more comprehensive and rigorous. Employers must provide additional information, including the number of Canadians that applied for their available job and the number of Canadians the employer interviewed, and explain why those Canadians were not hired. New and better sources of labour market information will be used to determine if there are Canadians who could fill these positions.

2. The LMIA fee is increasing from $275 to $1,000 for every temporary foreign worker position requested by an employer.

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3. The duration of work permits set out in LMIAs will be limited to a maximum of one year for all low-wage (i.e. below the median wage) positions, rather than the two year duration that existed previously. Employers of temporary foreign workers must reapply every year for an LMIA, better accommodating for changes in labour market conditions that may occur.

4. The government has significantly increased the number of inspections so that one in four employers using temporary foreign workers will be inspected each year. These inspections will be as a result of tips, employers being deemed high risk, and random audits.

5. Beginning in the fall of 2014, the government will impose fines of up to $100,000 (depending on the severity of the offence) on employers who break the rules of the TFWP.

6. Employers with 10 or more employees applying for a new LMIA are subject to a cap of 10% on the proportion of their workforce that can consist of low-wage temporary foreign workers. This cap will be applied per worksite, and is based on total hours worked at that worksite.

Have questions about how to comply with the changes to the TFWP? Contact us!

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