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Labour Market Impact Assessment (LMIA)

canada-jobsOn June 20 2014, the Ministry of Employment Social Development and the Ministry of Citizenship and Immigration Canada made a number of significant changes to the Temporary Foreign Worker Program (TFWP), as their joint programs to minister between them. It is important to note that the framework of TFWP has shifted so that all foreign workers under TFWP require a Labour Market Impact Assessment (LMIA) – formerly known as Labour Market Opinion (LMO).

Before June 20 2014, TFWP was classified under National Occupational Classification (NOC). However, after June 20 2014, TFWP will be administered based on wages: High wages v. Low wages. In Ontario, any foreign worker paid under $21.00 per hour is considered a “low wage worker” and any foreign worker paid $21.00 per hour or more will be considered as “high wage worker.”

The first and most important change is the fee – it has gone from $275.00 to $1,000.00 per LMIA, except On-Farm Primary Agricultural TFW.

With this change in mind, there are five categories of worker under the new TFWP:

  1. High-wage workers: these are foreign workers who earn more than the federal/provincial medium wage, who hold high-level education and qualifications. These workers are most likely under NOC 0, A or B.
  2. Low-wage workers: these are foreign workers who earn less than the federal/provincial medium wage, including general labourers, food counter attendants and sales and service personnel.
  3. Primary Agricultural Stream: these are foreign workers who work primarily in the agricultural industry, including those under the seasonal agricultural workers program in the past. This class is exempt from a LMIA fee, cap level, 1 year LMIA duration and reduction in work permit period.
  4. Highest-demand, highest-paid or shortest-duration: LMIA for in-demand occupations (skilled trades), highly paid occupations (top 10%) or short-duration (120 days or less) will be provided within a 10 business day service standard.
  5. Live-in-caregiver program: there was no change for this program under the new TFWP, but this program is exempt from cap level, 1 year LMIA duration and reduction in work permit period.

Another big change is an introduction of a cap on how many foreign workers an employer may have over time. 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 the total hours worked at that specific worksite. If any Canadian employers with more than the cap number of allowable foreign workers, they are to reduce their rate by July of 2016 –by 20% July 2015 and 10% July 2016.

In addition, certain LMIA in the accommodation, food services and retail trade sectors will not be processed at all. Applications for workers without any education or training will not be processed in economic regions with an unemployment rate at or above 6%.

If LMIA meets the following three criteria it will not be processed:

  1. Applying for an LMIA in a Statistics Canada economic region with an annual unemployment rate over 6%;
  2. Seeking an LMIA in a specific occupation identified under North America Industry Classification System as Accommodation & Food Services or Retail Sales (NAIC72, 44, 45); AND
  3. Seeking an LMIA in an occupation in one of the selected NOC skill level “D” occupations: 6641, 6661, 6611, 6622, 7611, 8612, 6672, 6663, 6662 or 6651).

In terms of duration, all low-wages LMIA shall only be issued for the duration of one year, instead of two years, which forces them to re-apply LMIA on an annual basis to be sensitive to labour market demand.

For high-wage occupations, employers who want to hire TFW must submit (with limited exceptions) transition plans with their LMIA to ensure that they are taking steps to reduce their reliance on TFW over time. Again, the transition plan is to encourage Canadian employers to hire Canadian workers first, over TFW. If the same TFW is to obtain a LMIA subsequently, then Canadian employers must report how their initial transition plans worked out, or didn’t work out to prove that the TFW is still required.

Finally, beginning fall 2014, the Government will impose fines up to $100,000.00 (depending on the severity of the offence) on employers who break the TFWP rules, not to mention that such charged/convicted employers will be published on online as a warning or deterrence.

More specific changes are pending for implementation in fall, 2014, March, 2015, spring 2015, summer 2015 and fall 2015. Therefore, any employers and TFW should be extremely cautious in proceeding with LMIA and must be aware of any changes or pending implementation prior to filing their LMIA.

If you have any individual questions or concerns, please contact our office for more customized consultation for your unique situation.  Please note that this posting is for general information only and is not to be considered binding or official legal counsel since situations will vary and can be complicated. The content in this post is current as of the day of entry. Due to the changing nature of Immigration law, the information in this entry may or may not still be applicable.