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Changes to Canada’s Temporary Foreign Worker Program - Stephen Green, Green and Spiegel LLP
 

Changes to Canada’s Temporary Foreign Worker Program - Stephen Green, Green and Spiegel LLP

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    Changes to Canada’s Temporary Foreign Worker Program - Stephen Green, Green and Spiegel LLP Changes to Canada’s Temporary Foreign Worker Program - Stephen Green, Green and Spiegel LLP Presentation Transcript

    • Stephen Green Partner Green & Spiegel LLP 390 Bay Street, Suite 2800 Toronto, ON M5H 2Y2 T: 416-862-7880 F: 416-862-1698 Changes to Canada’s Temporary Foreign Worker Program 1
    • AGENDA 1. Business Visitors 2. LMO Exempt ICT 3. Labour Market Opinion Work Permits 4. New Reforms to the Temporary Foreign Worker Program (TFWP) 5. Compliance Reviews 6. Practice Tips 7. Possible Upcoming Changes to Intra-Company Transfers (ICT) 2
    • 1. BUSINESS VISITOR 3
    • Definition  A Business Visitor is a foreign national who enters Canada to conduct international business activities. It is crucial that the individual will not engage in employment that will provide services, create competition within the Canadian labour market, or remove opportunities from it, as such activities require Work Permits. 4
    • Business Visitor Examples DO ✔ DON’T X Buying Canadian goods or services for a foreign business or government Buying Canadian goods or services for a Canadian affiliate/business Attend meetings, conferences, conventions or trade fairs Entering the Canadian labour market, even if only for a short-term transfer assignment Providing after-sales service (mainly supervision, not hands-on labour) Performing repairs or specialized service not listed in the original or extended sales agreement, warranty or service contract; Performing hands-on installation generally performed by construction or building trades Being trained by a Canadian company that has sold you equipment or services Performing work in Canada for a Canadian company pursuant to a contract for goods/services made with a foreign employer Attending Board of Directors meetings to select/appoint chief or govern the organization Receiving any form of remuneration from the Canadian company 5
    • Business Visitor Pre-requisites Visa Requirements • Foreign nationals from countries that require a Temporary Resident Visa (TRV) will need to apply for a TRV abroad along with documents to qualify as a Business Visitor • Notable visa exempt countries include: United States, United Kingdom, France, Italy and Spain. Admissibility Requirements • Security • Human or International Rights Violations • Criminality • Organized Criminality • Health Grounds • Financial Reasons • Misrepresentation • Non-compliance with IRPA • Having an inadmissible family member 6
    • Business Visitor Requirements  There must be no intent to enter the Canadian labour market, as in no gainful employment in Canada;  The activity must be international in scope, a presumption of underlying cross-border business activity;  Primary Source of the worker’s remuneration remains outside Canada;  Principal place of the Worker’s employer is located outside Canada;  Accrual of profits of the foreign employer is located outside Canada;  Documents:  Proof of remuneration outside of Canada  Copies of an after-sales agreement (if applicable)  Letters from the Canadian parent/subsidiary stating the purpose of the visit  Promotional/training materials  Valid travel document (ie. passport) valid for a minimum of 6 months  Return airline ticket  Sufficient funds for visit and return trip 7
    •  Training:  Training of clients limited to a pre-existing contract  Client is seller/purchaser of foreign goods and services to be used within or outside of Canada  Provide or receive training from a Canadian parent or subsidiary of the corporation that employs the Business Visitor outside of Canada  Receive training related to goods and services purchased from a Canadian parent or subsidiary  After-Sale Services  May perform activities that are derived from warranty and after-sales contracts  The after-sales contract must be part of an original sale or lease agreement, and an extension of the original contract  Services must be performed during the validity of the warranty/after-sales contract  Services cannot include hands-on installation NOTE: After-Sales Services  The contracts should state the categories of service that will be performed by the employee. The employee must bring a copy of the contract with him/her to present to Canadian Immigration officials upon entry to Canada. Although sensitive and confidential information (ie. pricing) may be omitted, the complete service and warranty section of the contract must be with the employee. 8
    •  Specialized knowledge  Relevant post-secondary degree or diploma, license, certification  Required skills and/or advanced knowledge level to perform activity in Canada  Specialized training needed to provide the service and indicates expertise that is beyond hands-on building and construction work  Installation  When a sales contract or purchase order is for a software upgrade to use a product that was previously sold, if the contract states the individual will:  Supervise the installation  Configure or provide training regarding the upgraded software  Third Party  After-sales sections do not apply to service contracts that are created with a third party after the sales or lease contract has been signed, unless the original sales contract states the third party’s name and their services  Lease Agreements  The existence of a sales transaction is a key element of an original cross- border transaction conducted under a lease agreement 9
    • Additional Factors  Remuneration  Business Visitors should typically be remunerated by the foreign employer, and his/her activities should be intended to benefit the foreign employer.  Note: an activity conducted for the benefit of the Canadian entity is still considered work, even if there is no pay or if the payment is from a foreign source  Duration of stay  Business Visitors may be permitted to stay in Canada for a few days to a few weeks.  The Immigration Officer will consider how long the foreign national intends to stay, the activity to be performed, and previous entries to Canada.  Negotiations  Where a Canadian company is engaged in contractual negotiations with a client in Canada, any Business Visitors entering Canada must leave prior to the execution of the contract. 10
    • 2. LMO Exempt Intra-Company Transfers (ICT) 11
    • Intra-Company Transfers  Foreign Workers who are issued Work Permits as Intra-Company Transferees (either under NAFTA or IRPA) are exempt from having to obtain an LMO. The wages to be paid to the Foreign Worker must be similar to Canadian wages for the same occupation.  The Foreign Worker must meet the following criteria:  The Foreign Worker must be currently employed by a multi- national company and seeking entry to work in a parent, subsidiary, branch, or affiliate of that enterprise;  The Foreign Worker has been employed continuously (via payroll or by contract directly with the company), by the company that plans to transfer him or her, outside Canada in a similar full-time position (not accumulated part-time) for at least one year in the three-year period immediately preceding the date of initial application. 12
    • Intra-Company Transfers Intra-Company Transferee criteria continued: The employment must fall under one of the following categories:  Executive : direct management of the organization or a major component, establishing goals and polices, exercising wide latitude in discretionary decision-making and receiving only general supervision board of directors, stockholders or higher level executives;  Senior Managerial: manages organization or departments, supervisors and controls the work of other mangers, has authority to hire and fire and exercises discretion over day-to-day activities;  Specialized Knowledge : involves many years of experience and advanced level of knowledge which is uncommon in the industry. Their role must be critical to the enterprise and can include proprietary knowledge of systems/services/products. 13
    • Intra-Company Transferee Specialized Knowledge: Special knowledge an individual has of a company’s product or service and its application in international markets or an advanced level of knowledge or expertise in the organization’s processes and procedures. (Product, process and service can include research, equipment, techniques, management, or other interests). 14
    • Intra-Company Transferees Specialized Knowledge cont’d: unusual and different from that found in a particular industry. The knowledge need not be proprietary or unique but uncommon. As a general guide, special knowledge may involve a person’s familiarity with a product or service which their company makes. Advanced knowledge is complex - again, not necessarily unique or known only by a few individuals (proprietary), but advanced. An assessment of whether such knowledge exists in Canada is not relevant as the test is whether the applicant possesses such knowledge. 15
    • Intra-Company Transfers Intra-Company Transferee criteria continued:  The Foreign Worker must be transferring to an enterprise that has a qualifying relationship with the enterprise in which he or she is currently employed, and will be undertaking employment at a legitimate and continuing establishment of that company (where 18-24 months can be used as a reasonable minimum guideline);  They must only be coming to Canada for a temporary period;  They must comply with all immigration requirements for temporary entry (ie. admissibility). 16
    • 3. Labour Market Opinion Work Permits 17
    • Labour Market Opinion-based Work Permits  In most cases, an employer needs to apply for a Labour Market Opinion (LMO) from Service Canada before an employee may apply for a Work Permit.  The LMO is a labour certification process which involves demonstrating that local recruitment has been unsuccessful and there is a need to hire foreign workers. 18
    • Recruitment and Applying for a LMO  The recruitment process may differ depending on whether the position falls under NOC 0, A, or B, or under low skilled workers 19
    • Recruitment and Applying for a LMO (NOC 0, A and B)  Employers can choose one or more recruitment methods consistent with the normal practice of the occupation, among the following:  Advertisement on recognized Internet employment sites such as Monster, Workopolis  On the website of a professional association  In national newspapers, professional journals or newsletters 20
    • Recruitment and Applying for a LMO (NOC 0, A and B)  The advertisement must include:  Company operating name  Wage/salary or salary range  Location of work  Nature of the position and contract duration length  Job duties  Skills/Requirements  After 4 weeks of advertising on 3 separate recognized mediums, if the employer cannot find a suitable candidate who is a Canadian citizen or permanent resident, the employer may apply for an LMO. 21
    • Reforms to the Temporary Foreign Worker Program - Recruitment  More stringent advertising and recruitment requirements were implemented in April 2013; Employers are required to make greater efforts to hire Canadians before they will be eligible to hire TFWs:  Employers must advertise positions for at least four weeks before applying for an LMO (this requirement applies to all advertising methods);  Employers must advertise in 3 separate sources. In addition to advertising on the national Job Bank website (or the equivalent provincial websites), employers must prove they have used at least two other recruitment methods;  If hiring for a higher-skilled occupation – one method must be national in scope;  If hiring for a lower-skilled occupation – employers must demonstrate that they made efforts to target under-represented groups in the work force;  Employers must show ongoing recruitment efforts until an LMO has been issued. Employers must re-institute all recruitment advertisements to show an ongoing recruitment effort of 3 types of recruitment; 22
    • Labour Market Opinions - Additional Employer Information Form  As of April 2013, Employers are also required to provide additional information on the impact of temporary foreign workers on the Canadian labour market, based on available labour market information for the region and occupation. A negative LMO will be issued if an assessment indicates hiring a TFW will have a negative impact on the Canadian labour market through layoffs, offshoring, or outsourcing. 23
    • Additional Employer Information Form  Labour Market Impact Questionnaire Definitions  Offshoring describes the relocation by a company of a business process from one country to another – typically an operational process, such as manufacturing, or supporting processes, such as accounting or IT services. More recently, offshoring has been associated primarily with technical and administrative services supporting domestic and global operations from outside the home country, by means of internal (captive) or external (outsourcing) delivery models.  Outsourcing describes the contracting out of an internal business process to a foreign or domestic third-party organization.  Lay-offs describes the temporary suspension or permanent termination of employment of an employee or a group of employees for business reasons. 24
    • Additional Employer Information Form cont’d 25 • Based on the proposed definition of ‘offshoring’, the employers are asked to declare whether the job offer related to a contract/subcontract will facilitate offshoring. • Employers are now required to provide a summary of contractual agreements between the employer and the company receiving goods and/or services. • Employers are also required to provide details of positive/negative impacts on Canadians/permanent residents within company receiving goods/services over the next 2 years as a result of hiring foreign workers. • Employers are also being asked to account for the hiring of any foreign workers through work permit exempt or LMO-Exempt processing streams.
    •  Service Canada will look at several factors in the LMO application, such as:  Whether the job offer is genuine;  Whether there is a need for the foreign worker in the local labour market, and whether the foreign worker will have a neutral or positive effect on the labour market;  Whether the employer has demonstrated that the employee will be paid the prevailing wage.  Whether the employer is in compliance with employment standards (including with other foreign nationals previously recruited) Labour Market Opinion Assessment 26
    • Note: Under the new procedure, the genuineness of the job offer will be examined. Immigration officers will now assess whether a job is “genuine” on an expanded parameter. They will examine:  The employer’s past compliance with employment and recruitment laws  Whether the employer can reasonably meet the terms of the job offer  Whether the employer is “actively engaged” in the business; and  Whether the job offer is congruent with the employer’s reasonable employment needs and is consistent with the type of business the employer is engaged in. Labour Market Opinion 27
    • 4. New Reforms to the Temporary Foreign Worker Program (TFWP) 28
    •  In April 2013 and July 2013, the federal government introduced legislative, regulatory and administrative changes to the process for hiring temporary foreign workers. These changes have had an impact on LMO processing.  Key changes include:  Additional information required from employers (discussed in slides 24-26);  Lengthier and broader recruitment requirements (discussed in slide 23);  More limited wage flexibility;  Implementation of measures for LMO revocation; and suspension of Accelerated LMO processing;  Implementation of processing fees;  New restrictions on non-official languages as job requirements in LMO positions. New Reforms to the Temporary Foreign Worker Program 29
    • 30 Reforms to the Temporary Foreign Worker Program – Wage Flexibility  In a LMO application, the Temporary Foreign Worker Program reviews the wages offered by the employer and compares them to wages paid to Canadians and permanent residents in the same position and geographical area.  As of April 29, 2013 the federal government introduced legislative, regulatory and administrative changes requiring employers to pay temporary foreign workers at the prevailing wage by removing the existing wage flexibility (i.e. no longer able to pay temporary foreign worker wages up to 15% below the prevailing wage for a higher-skilled occupation, and 5% below the prevailing wage for a lower-skilled occupation, provided they could demonstrate that the wage being paid to a temporary foreign worker was the same as that being paid to their Canadian employees in the same job and in the same location);
    • Reforms to Temporary Foreign Worker Program – LMO Issuance and Revocation  Effective as of April 29, 2013, the Accelerated Labour Market Opinion process was temporarily suspended and Employers are now subject to the regular processing;  Authority also provided to suspend and revoke work permits and Labour Market Opinions (LMOs) in certain circumstances:  new information becomes available indicating that the entry of a temporary foreign worker would have a negative impact on the labour market or if it is determined that the LMO or work permit was fraudulently obtained.  Suspending an LMO would stop the issuance of work permits. In cases where an LMO is suspended or revoked, CIC will review the work permits that were issued under that LMO on a case-by-case basis to determine whether the work permits should also be revoked.31
    • Reforms to the Temporary Foreign Worker Program – Fees and Language Requirements  As of July 31, 2013 the federal government is introducing legislative, regulatory and administrative changes that will:  Effective immediately, require payment of new processing fees for Labour Market Opinion processing: Employers applying to hire TFWs must now pay a processing fee of $275 for each position requested. Employers hiring workers for on-farm primary agricultural positions (under NOC codes 8251, 8252, 8253, 8254, 8256, 8431, 8432 and 8611), under Seasonal Agricultural Worker Program, or the Agricultural Stream are exempted from the fee;  Effective immediately, require a new language assessment: English and French are the only languages that can be identified as a job requirement (both in LMO requests and in advertisements by employers); unless employers can clearly demonstrate in writing another language is essential and consistent with the regular activities of the job;32
    • 5. Compliance Reviews 33
    • Compliance Reviews Under the new regime, ALL employers hiring foreign workers on LMOs are subject to potential employer compliance reviews. There are no appeal rights, and the determinations are final once rendered. Items that will be subject to review include the following:  Wages and Working Hours: Temporary foreign workers should receive working hours and wages that are substantially the same (STS) as those set out in the LMO confirmation letter and annex.  Job duties: Temporary Foreign Workers should spend the majority of their time performing job duties that are consistent with the occupation specified in the LMO confirmation letter and annex;  Working conditions: Employers should be complying with Canada’s employment and occupational safety standards;  Recruitment: Recruitment and job advertising efforts should be made in accordance with Service Canada’s requirements.  If it appears that employers did not fully respect the terms and conditions of employment set out in the LMO confirmation letters and annexes, the employer will have the opportunity to provide a rationale. HRSDC has indicated that it will accept limited justifications for any non-compliance. 34
    • Compliance: “Substantially the Same”  What is the “Substantially the Same” (STS) regime?  It is a mandate from CIC and Service Canada in which they determine whether the employer has had Foreign Workers employed in positions that are Substantially the Same (STS) as what was specified in their offers of employment in the two years prior to the opinion request/work permit.  The wages, working conditions, and occupation must be STS. An examination of a variety of documents including T4s, time sheets and payroll records may be used to see if employees actually worked in the jobs and under the conditions intended when the LMO or Work Permit was issued. There are limited reasons of justification that can be used by the employer. 35
    • Returning employers  All returning employers must demonstrate that they have met the terms and conditions of employment set out in previous LMO confirmation letters and annexes. In addition, some employers may be required to submit documentation to support a more detailed employer compliance review, including any or all of the following documents:  Payroll records;  Time sheets;  Job descriptions;  Copies of the employer-employee contract;  Collective agreements;  Temporary foreign worker’s work permit;  Provincial workers compensation clearance letter or other appropriate provincial documentation;  Receipts for private health insurance (if applicable);  Receipts for transportation costs; and  Information about accommodations provided by the employer. 36
    • Returning employers (cont’d)  In some cases, HRSDC will work with the employer to implement the appropriate corrective action, which may include providing compensation to the temporary foreign worker. However, employers may be found non-compliant if they refuse to provide a rationale and/or provide only partial compensation to the temporary foreign worker.  If an employer is found to be non-compliant, it may result in severe consequences for an employer, including the following:  The employer could be prohibited from obtaining a new Work Permit or a renewal of a Work Permit for any foreign national for a period of two years.  The employer would be placed on an “ineligible employers list”, which is published on a website for the public to view.  An employee can risk losing their status by extending or entering into employment agreements with an ineligible employer.  Due to the information sharing program, an employer could be found to have violated employment laws and thus, may suffer other consequences that transcend these immigration issues.  LMOs and Compliance: What are the employer’s liabilities?  If employers are found to not have paid employees wages substantially the same as those set out on the LMO, they may need to reimburse foreign workers for the difference in order to maintain compliance.  Due to government information sharing, employers may be subject to sanctions and penalties from employment regulators for violations of employment laws discovered during compliance reviews. 37
    • 6. Practice Tips 38
    • IMPORTANT: In light of the implementation of Bill C-35 (“The Cracking Down on Crooked Consultants Act”), Citizenship and Immigration Canada has commenced the active enforcement of an amendments to the Immigration and Refugee Protection Act (“IRPA”). Section 91 of the IRPA limits third party representation (or offering of advice for consideration) to lawyers or other members in good standing with provincial law societies or Minister designated bodies. The implementation of this Bill prohibits employers (through its recruiters and HR personnel) from offering immigration advice, complete application packages and/or liaising with CIC on behalf of international students and faculty. 39
    • Practice Tips (Cont’d)  Does your company’s HR department have the resources, mandate and expertise to implement accounting and human resources practices that ensure both compliance with STS and compliance review audits and the maintenance of records required to demonstrate compliance?  Does your company’s HR department have recruitment policies and practices in place that satisfy Service Canada’s requirements? 40
    • Practice Tips (Cont’d) In order to ensure compliance, your company will need to ensure:  Mandatory Police and background checks, as the immigration process does not always require such as part of the work permit application process;  Conduct internal reviews of recruitment practices, human resources and accounting policies;  Ensure that proper supporting documentation is kept on file for each foreign worker:  Supporting evidence establishing qualifications and paid work experience;  Full disclosure of immigration history and dependent information.  Timesheets and records of all job assignments. 41
    • Practice Tips (Cont’d)  Review and maintain records concerning the type of work permit each foreign worker has been issued in order to ensure: 42 LMO Work Permits • proper recruitment efforts and employment standards; Intra-Company Transferee Work Permits • position, duties, salary and qualifications of the foreign workers meet the definitions of Executive, Senior Manager and/or Specialized Knowledge workers; Open Spousal Work Permits • The principal applicant has a skilled work permit valid for at least 6 months and is working in a NOC 0,A,B position; Student or Post-Graduate Work Permit • though there are exemptions regarding prevailing wages and recruitment efforts, the job duties and wages must still be in line with the foreign worker’s level of qualifications; NOTE: For LMO and ICT permits: Ensure that the job descriptions on the LMOS and Work Permit applications properly match the foreign worker’s duties
    • 7. Possible Upcoming Changes to Intra-Company Transfers (ICT) 43
    • Possible Upcoming Changes to ICT  Wage indicators for specialized knowledge workers;  Education, training, and experience indicators for specialized knowledge workers;  Extent of specialized knowledge workers within each company;  Third-party work-site concerns for intra-company transferees. 44
    • 390 Bay Street, Suite 2800, Toronto, Ontario M5H 2Y2 Tel: 416-862-7880 Facsimile: 416-862-1698 www.gands.com 45