Stephen GreenPartnerGreen & Spiegel LLP390 Bay Street, Suite 2800Toronto, ON M5H 2Y2T: 416-862-7880F: 416-862-1698Labour Market Opinions and EmployerCompliance Reviews
Agenda (1) New Reforms to theTemporary ForeignWorker Program–April 29, 2013; (2) Labour Market Opinions; (3) Compliance Reviews; (4) Employer Liabilities; (5) Standards of Practice.
(1)New Reforms to the TemporaryForeign Worker Program As ofApril 29, 2013 the federal government is introducing legislative,regulatory and administrative changes that will: Effective immediately, require employers to pay temporary foreign workers atthe prevailing wage by removing the existing wage flexibility (i.e. no longerable to pay temporary foreign worker wages up to 15% below the prevailingwage for a higher-skilled occupation, and 5% below the prevailing wage for alower-skilled occupation, provided they could demonstrate that the wage beingpaid to a temporary foreign worker was the same as that being paid to theirCanadian employees in the same job and in the same location); Effective immediately, temporarily suspend theAccelerated Labour MarketOpinion process and Employers are now subject to the regular processing;
New Reforms to the Temporary ForeignWorker Program Cont’d Increase the Government’s authority to suspend and revoke work permits andLabour Market Opinions (LMOs) if the program is being misused; This could occur if, for example, new information becomes available indicating that theentry of a temporary foreign worker would have a negative impact on the labour marketor 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 issuspended or revoked, CIC will review the work permits that were issued under thatLMO on a case-by-case basis to determine whether the work permits should also berevoked. Add questions to employer LMO applications to ensure that theTFWP is notused to facilitate the outsourcing of Canadian jobs; require additional information from employers and their partner companies before issuingan LMO.
New Reforms to the Temporary ForeignWorker Program Cont’d Ensure employers who rely on temporary foreign workers have a firmplan in place to transition to a Canadian workforce over time throughthe LMO process; The employer will have to submit the transition plan to HRSDC as part of itsLMO application.The transition plan will generally include an employer’sintended actions in the following areas: recruitment, training, and residency. A review of the employer’s progress against the transition plan will occur if theemployer applies for another LMO in the future. Employers will be required todocument their ongoing efforts to transition to a Canadian workforce Introduce fees for employers for the processing of LMOs and increasethe fees for work permits so that the taxpayers are no longer subsidizingthe costs;
New Reforms to the Temporary ForeignWorker Program Cont’d Identify English and French as the only languages thatcan be used as a job requirement. Exemptions will only be given in specialized cases where aforeign language is an essential job requirement, such as tourguides, translators or performers. In these cases, the onus willbe on the employer to explain why a foreign language is arequirement of the job.
(2) Labour Market Opinion-based WorkPermits In most cases, an employer needs to apply for a LabourMarket Opinion (LMO) from Service Canada before anemployee may apply for aWork Permit. The LMO is a labour certification process which involvesdemonstrating that local recruitment has been unsuccessfuland there is a need to hire foreign workers.
Recruitment and Applying for a LMO For NOC 0,A, or B (skilled) positions, the employer mustconduct recruitment activities consistent with the practicewithin the occupation or advertise the job for 14 days on theCanada Job Bank or its provincial/territorial counterpart inthe three months prior to applying for a LMO. After the advertising period has ended and the employercannot find a suitable candidate who is a Canadian citizen orpermanent resident, the employer may apply for an LMO.
Labour Market Opinion Service Canada will look at several factors in theLMO application, such as: Whether the job offer is genuine; Whether there is a need for the foreign worker in the locallabour market; Whether the employer has demonstrated that the employee willbe paid the prevailing wage. Whether the employer is in compliance with employmentstandards (including with other foreign nationals previouslyrecruited)
Labour Market OpinionNote: Under the new procedure, the genuineness of the job offerwill be examined. Immigration officers will now assess whether a jobis “genuine” on an expanded parameter.They will examine: The employer’s past compliance with employment and recruitmentlaws 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 reasonableemployment needs and is consistent with the type of business theemployer is engaged in.
Prevailing Wages In a LMO application, theTemporary ForeignWorkerProgram reviews the wages offered by the employer andcompares them to wages paid to Canadians and permanentresidents in the same position and geographical area.
(3) Compliance Reviews Under the new regime,ALL employers hiring foreign workers on LMOs are subjectto potential employer compliance reviews.There are no appeal rights, and thedeterminations are final once rendered. Items that will be subject to review include the following: Wages andWorking Hours:Temporary foreign workers should receive working hours andwages that are substantially the same (STS) as those set out in the LMO confirmationletter and annex. Job duties:Temporary ForeignWorkers should spend the majority of their timeperforming job duties that are consistent with the occupation specified in the LMOconfirmation letter and annex; Working conditions: Employers should be complying with Canada’s employment andoccupational safety standards; Recruitment: Recruitment and job advertising efforts should be made in accordance withService Canada’s requirements. If it appears that employers did not fully respect the terms and conditions ofemployment set out in the LMO confirmation letters and annexes, the employer willhave the opportunity to provide a rationale. HRSDC has indicated that it will acceptlimited justifications for any non-compliance.
Compliance: “Substantially the Same” What is the “Substantially the Same” (STS) regime? It is a mandate from CIC and Service Canada in which they determinewhether the employer has had ForeignWorkers employed in positionsthat are Substantially the Same (STS) as what was specified in theiroffers of employment in the two years prior to the opinionrequest/work permit. The wages, working conditions, and occupation must be STS.Anexamination of a variety of documents includingT4s may be used tosee if employees actually worked in the jobs and under the conditionsintended when the LMO orWork Permit was issued.There arelimited reasons of justification that can be used by the employer.
Compliance ReviewsReturning employers: All returning employers must demonstrate that they have met the termsand conditions of employment set out in previous LMO confirmationletters and annexes. In addition, some employers may be required tosubmit documentation to support a more detailed employer compliancereview, 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.
Compliance Reviews In some cases, HRSDC will work with the employer to implement the appropriatecorrective action, which may include providing compensation to the temporary foreignworker. However, employers may be found non-compliant if they refuse to provide arationale 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 anemployer, including the following: The employer could be prohibited from obtaining a newWork Permit or a renewal of aWork 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 awebsite for the public to view. An employee can risk losing their status by extending or entering into employmentagreements with an ineligible employer. Due to the information sharing program, an employer could be found to have violatedemployment laws and thus, may suffer other consequences that transcend theseimmigration issues.
(4) LMOs and Compliance: What arethe employer’s liabilities? If employers are found to not have paid employees wagessubstantially the same as those set out on the LMO, they may needto reimburse foreign workers for the difference in order tomaintain compliance. Due to government information sharing, employers may besubject to sanctions and penalties from employment regulators forviolations of employment laws discovered during compliancereviews.
(5) Standards of Practice Does your company’s HR department have the resources, mandateand expertise to implement accounting and human resourcespractices that ensure both compliance with STS and compliancereview audits and the maintenance of records required todemonstrate compliance? Does your company’s HR department have recruitment policiesand practices in place that satisfy Service Canada’s requirements? Can your company demonstrate to Canadian partner companiesproper practices sufficient to maintain compliance?
Standards of Practice – CanadianPartner CompaniesCanadian Partner companies may require the following from contracted service providersto ensure compliance: Mandatory Police and background checks, as the immigration process does not alwaysrequire such as part of the work permit application process; Execution of confidentiality agreements between not only the partner company and theservice provider, but also confidentiality agreements between the Canadian partnercompany and each individual foreign worker; Disclosure of the information, supporting documents and applications filed (on behalf ofeach foreign worker with immigration authorities) by service provider companiesand/or their immigration representatives before the commencement of work placementwith the Canadian partner company.
Standards of Practice – PartnerCompanies Internal Compliance reviews conducted by Canadian partner companies of: the recruitment efforts; applications and representations made to Canadian authorities; and employment conditions of foreign workers placed with the Canadian Partner company; Promotion and investment in Canadian academic institutions fostering training andincreased transfer of specialized knowledge to Canada; Having Service Provider companies provide a signed Placement Form confirming: The JobTitle, duties and NOC; Salary and Benefits; The ForeignWorker’s credentials and experience;
Practice Tips Conduct internal reviews of recruitment practices, humanresources and accounting policies; Ensure that proper supporting documentation is kept on filefor each foreign worker: Recruitment efforts in line with labour market thresholds; Job descriptions in light of the category of work permit andqualifications of the foreign worker; Supporting evidence establishing qualifications and paid workexperience; Full disclosure of immigration history and dependent information. Timesheets and records of all job assignments.
Practice Tips Review and maintain records concerning the type of workpermit each foreign worker has been issued in order toensure: LMOWork Permits: proper recruitment efforts and employment standards; Intra-CompanyTransfereesWork Permits: position, duties, salary and qualifications of theforeign workers meet the definitions of Executive, Senior Manager and/or SpecializedKnowledge workers; Spousal OpenWork Permits: the spouse (the principal applicant) has a skilled work permit validfor at least 6 months and is working in a NOC 0,A,B position; Student or Post-GraduateWork Permit: though there are exemptions regarding prevailingwages and recruitment efforts, the job duties and wages must still be in line with the foreignworker’s level of qualifications; Ensure that the job descriptions on the LMOS andWorkPermit applications properly match the foreign worker’sduties;
Areas of Concern Overtime and Per Diems; Representations made at visa posts; Vetting of educational documents; Employee concerns; Monetary conversion rates;
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