Temporary Foreign Worker changes cause more headaches for employers

Inspections without warrants and further delays to Labour Market Opinions make recent changes to the Temporary Foreign Worker program bad for Canadian business, say immigration lawyers.

On Dec. 31, a new set of amendments came into force regarding the Temporary Foreign Worker Program and employers who wish to apply for a LMO. These changes take place through amendments to the Immigration and Refugee Protection Regulations and a new set of ministerial instructions by the Minister of Employment and Social Development Canada.

The changes include:

• As of Dec. 31, 2013, employers must complete a new LMO application form with modified questions and attestations.

• No LMOs will be issued under the authority of the Minister of Employment and Social Development Canada to employers who regularly offer striptease, erotic dance, escort services, or erotic massages. (The idea here is to protect foreign workers from abuse or exploitation.)

• Employers will be required to keep any document that relates to compliance with conditions of the IRPR for six years, starting from the first day of employment the work permit is issued to the foreign worker. Employers must also demonstrate information they provided in an LMO application was accurate;

• Employers are required to make “reasonable efforts” to ensure a workplace is free of abuse; and

• Employers must hire, train, or make “reasonable efforts” to hire or train Canadians or permanent residents if this is one factor that led to a work permit being issued.

Service Canada and the Minister of Employment and Social Development Canada will also have the authority to administer inspections. This is different from an employer compliance review that takes place in the assessment of an application made for an LMO.

Verifying compliance will give Service Canada and the minister the power to:
• Request employers provide documents that may demonstrate compliance with conditions;
• Conduct inspections on-site without a warrant and interview Canadian employees and foreign workers by consent.

Following a determination of non-compliance, employers will be deemed ineligible to hire foreign workers for two years, have their name, address, and period of ineligibility published on a public ban list, and be issued negative LMOs on any pending LMO applications. They may also have previously issued LMOs revoked.

While some of the changes are acknowledged as positive for protecting vulnerable employees, some immigration lawyers say there needs to be more risk management applied to the process or it will pose a “big impediment to business.”

“If you look at the new LMO form, they are asking corporate Canada to tick off the box indicating they are not involved in exotic dancers and strippers,” says Stephen Green of Green Spiegel LLP. “That’s the best way of describing it — there hasn’t been enough risk management built into this process yet.”

Companies are going to have to be more diligent about LMOs overall. For example, if employers decide to pay a foreign worker more money than originally advertised and they don’t get a new LMO, they could be considered non-compliant.

“It’s increasingly becoming more and more difficult for employers to make these applications,” says Lainie Appleby, a partner with Guberman Garson Immigration Lawyers. “The time frames are becoming more lengthy and if a company is involved in one of either a compliance review or inspection it puts the pending application on hold. It’s going to affect Canada’s reputation and ability to compete in the global marketplace.”

Companies considering a merger or acquisition should pay close attention to the amendments, especially when dealing with franchises says Green.

“If you buy a business that has temporary foreign workers, you as a purchaser — or if merging with another company — have to make sure the vendor has been compliant all along because it will now flow to you. I’m not sure how many corporate lawyers would think that is one of the undertakings you would need to ask for under this legislation,” says Green.

“For example, Tim Hortons Inc. stores in Alberta use many temporary foreign workers. If you were to buy a Tim Hortons using temporary foreign workers and the owner wasn’t compliant and you can’t get work permits for two years, you’re done.”

Green calls the new regime that allows for inspections without a warrant “ridiculous” and says there should be more of a risk-management approach by the government as to who is being targeted for inspection.

“They have more powers than the police in that respect,” he says. “There needs to be more flexibility in the system for the local officers to make decisions. If you’re the CEO of a company and you’re here on a work permit and you’ve been here for two years, you have to go through the whole advertising and recruitment process again — it doesn’t make sense from a business standpoint,” he says.

He says the compliance reviews triggered by a request for a LMO also need to be shorter — some have been going on since May with no decision issued. There also needs to be a system for employers with urgent needs for workers.

“You would think from a transparency perspective you would like to get a report on the compliance review but you don’t — you just get the report you asked for,” he says. “There’s not enough transparency given to the employer to help them be better employers.”

Appleby says she is getting calls from clients concerned about how this will affect filling senior positions.

“I have some clients who are recruiters and they keep calling with every job assignment they get — and this is C-suite recruiting, senior managerial jobs — often for publicly traded companies. Not only is it not anyone’s business how much they make but that will have possible ramifications on stock prices,” she says.

Under the previous regime, with high-level occupations an employer did have to show the wages met up with what was required by the government but they didn’t have to post it in the ad.

“When you’re advertising at that level it is certainly not the industry standard to include the wage,” says Appleby.

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