Canada: Changes To Canada’s Labour Market Opinion Process And The Temporary Foreign Worker Program

In the latter half of 2013 there have been significant changes to the Temporary Foreign Worker Program (TFWP), and specifically to the rules relating to obtaining Labour Market Opinions (LMOs).  Many of these changes are set out in this government announcement:  Changes to LMO Rules Effective July 31.

These new rules made major changes to the recruiting and advertising requirements, in order to ensure that employers look for qualified Canadians or permanent residents before hiring foreign workers. 

There will be further changes as greater compliance obligations will be placed on employers under the TFWP.

Changes to LMO Rules

The main changes are set out below:

1.  Employers seeking an LMO must pay a fee of $275 per temporary foreign worker requested.

2.  Increased recruiting obligations were introduced.  This lengthens the time it takes to be able to a hire foreign workers under an LMO-based work permit. Some of these changes are set out below.

  • Employers must advertise available positions in Canada for at least 4 consecutive weeks (it used to be 14 days) before applying for an LMO. This 4 week requirement applies to all advertising methods.
  • The position must be posted on the national Job Bank or its provincial/territorial counterpart for positions located in British Columbia, Saskatchewan, the Northwest Territories, Quebec or Newfoundland and Labrador. Prior to this, employers did not have to post managerial or professional positions (NOC 0 and A) on the Job Bank or provincial equivalent. 

However, the Guidelines posted on Service Canada's website also state that "Employers recruiting higher-skilled workers, in areas where the use of the Job Bank or its provincial/territorial counterparts is not considered an effective method of recruitment, must provide a written explanation of the alternative method used with their LMO application".  This suggests that for some senior positions, employers may not have to use the Job Bank, if a strong rationale for not doing so can be provided.  However, it is unclear how this will be interpreted by reviewing officers.

  • Employers must advertise using at least 2 or more additional methods of recruitment (in addition to the Job Bank/provincial equivalent listing) consistent with the normal practice for the occupation. At a minimum, one of those additional methods must be national in scope. This can include general employment websites or specialized websites focusing on a particular occupation or industry. The guidelines set out some examples.
  • The required content of job advertisements has been expanded. For example, employers must now include wage information for NOC 0 and A positions, whereas before the changes this was only required to be in job listings for NOC B and low skill positions. The name of the employer must also appear on job listings.
  • Employers must continue to advertise the available position and actively seek qualified Canadians and permanent residents until the date they receive notification that an LMO has been issued.  Employers will need to be able to demonstrate ongoing efforts during the time the LMO application is being processed at Service Canada.
  • The new advertising requirements do not apply to the Live-in Caregiver Program, the Seasonal Agricultural Worker Program and the Agricultural Stream
  • Further information on the recruiting rules for higher skilled positions is available at this link under "Recruitment and Advertising" -  Service Canada Guidelines

3.  English and French are the only languages that can be identified as a job requirement, both in LMO requests and in advertisements by employers applying to hire foreign workers, unless employers can clearly demonstrate that another language is essential for the position and is consistent with the regular requirements of the position.   It remains to be seen how officers will interpret when a language requirement is a bona fide job requirement.

4.   The LMO application form has been changed to add questions regarding outsourcing and the impact on the Canadian labour market. The employer declaration section has also been expanded. For example, employers must now declare that the entry of the foreign worker "is not expected to lead to job loss by any Canadian or permanent resident for the duration of this Labour Market Opinion and for two years thereafter."

The revised application form is here - LMO Application Form for Higher Skilled Positions

Impact on Employers

Employers need to be aware of the new rules. 

Employers that have used the TFWP in the past must be careful not to rely on old forms, or prior advertising practices. Employers should monitor the TFWP guidelines on Service Canada's website, as these are changed from time to time, without prior notice.

A failure to meet the recruiting requirements will only be discovered by the reviewing officer when the application is actually assessed which will be at least some weeks after the application is filed.  If there is an issue with the advertising being inadequate, the LMO application will likely be refused.  This would require an employer to repeat the whole process, after once again advertising for at least 4 weeks.  Consequently, it is imperative that employers meet the recruiting guidelines at the outset.

It remains to be seen how officers will deal with some of the new guidelines and potential issues.  For example, the new guidelines indicate that salary and benefits must be set out for all positions, including senior managerial positions.  The name of the employer also must be set out in any job listings. 

The new content requirements may have serious negative repercussions on employers.  For example, there may be a concern about publicly listing salaries or salary ranges of executives.  Also, the requirement to name the employer means that if the candidate is an incumbent for whom the employer is seeking a new LMO, the employer is forced to set out in a very public way that they are seeking to fill the position.  This could also cause negative consequences in terms of customer relations.  If customers of a company learn through the public advertising that a company is seeking to replace a senior executive, they may have concerns about the company.  Competitors might learn of the advertising and try to use that as a competitive advantage with customers.  It is not clear whether concerns such as this will be taken into consideration by Service Canada when reviewing applications for senior managerial positions filed under the new guidelines. 

LMOs for Quebec Based Foreign Workers

Employers hiring temporary foreign workers in Quebec under an LMO usually must, as part of the process, also obtain permission from Quebec's MICC (Ministère de l'Immigration et des Communautés Culturelles).  This requires the filing of an application to MICC (see Hiring Temporary Foreign Workers in Quebec for information on the process).  A copy of the LMO application filed with Service Canada must be filed with MICC along with what MICC requires.

It was announced in October that MICC would no longer process LMO applications submitted in English (except for applications made under the Live-in Caregiver Program).  Therefore, LMO applications for Quebec-bound workers that require a MICC approval will need to be in French.  See this link for further information:  Announcement regarding LMO language requirement.

Employer Compliance Reviews

Employers using the TFWP also need to be aware of increased compliance activity on behalf of Service Canada.  Employers may be randomly selected to undergo an Employer Compliance Review (ECR) where a compliance officer reviews past LMOs to ensure that the employer provided "substantially the same" terms of employment to the temporary foreign worker as were set out in past LMO applications and confirmations.

A finding of non-compliance could mean a two year ban on the employer being able to use the TFWP.

An ECR will suspend the processing of the current LMO application that triggered the ECR.  There does not appear to be a set protocol or timeline relating to ECR reviews, which make them very frustrating to deal with, especially where an employer is dealing with a candidate who is on a work permit that may expire before the ECR runs its course.  

Given the increasing emphasis on compliance, it is very important for employers to ensure that they provide the wages, hours and conditions of employment that were set out in the LMO confirmation received from Service Canada.  Records should be maintained to prove compliance. 

Before any potential changes to the terms of employment of an LMO-based work permit holder, a review should be done to determine whether a new LMO may need to be obtained. 

The "Declaration of Employer" that employers sign in the LMO application form includes the following:  "I will immediately inform Service Canada of any subsequent changes related to the foreign workers' terms and conditions of employment."

Consideration must therefore be given to sending Service Canada notice of any changes to the terms of employment so that there is a record on file in case the employer faces a subsequent ECR, and to determine if a new LMO may be needed, as the change may be significant enough that the labour market may need to be tested again to see if there are qualified Canadians interested in the position. 

Future Changes – new Regulations under IRPA

New regulations under IRPA are to be introduced, probably by the end of 2013, that will increase compliance obligations on employers further.  The changes will greatly increase the investigative powers of Service Canada and Immigration Canada officers. For example, it is expected that they will be given power to enter premises without a warrant, and to demand documents in order to investigate non-compliance with the TFWP rules.  As well, compliance reviews will be able to go back six years instead of the current two year timeline.

We will provide a further update when the final version of the new Regulations are announced.

Conclusion

The compliance pendulum is swinging against employers.  Employers that utilize the TFWP to meet human resources and skills needs will need to be aware of these changes, given the penalties they could face for non-compliance, and the negative effect on their operations that this could entail.

This new reality means that employers should implement internal policies and best practices to minimize the risk of non-compliance.  Policies and practices relating to the recruiting, hiring, and management of temporary foreign workers need to be implemented.  Proper document management and retention policies must be put in place to ensure that employers can quickly and effectively deal with requests for documentation under an ECR or if an investigation occurs. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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