Canada: Canadian Employers Now Subject To Administrative Monetary Penalties For Failure To Adhere To The Terms Of Offer Of Employment Or Labour Market Impact Assessment

Last Updated: December 18 2015
Article by Betsy Kane

On December 1 2015, Canadian and foreign employers who employ non-Canadian or non-permanent resident employees (foreign workers) in Canada will be subject to a penalty regime for non-compliance with Canada's Temporary Foreign Worker Program (TFWP). The Liberal government has rolled out the Conservative's plan to strengthen the compliance regime governing employers who hire foreign workers in Canada. The new regulations provide for an expanded set of powers that increases the federal government's ability to monitor and penalize employers who do not strictly comply with the terms of their approval to employ foreign workers via an LMIA or through the Employer Portal (formerly "Offer of Employment IMM5802").

The government's position is that this program is intended to encourage employer compliance with a points system that levies points and penalties based on the severity of the transgressions. The government can levy penalties of up to $1 million dollars and can ban employers from hiring foreign workers for periods of up to 10 years including permanent bans from the program. The new penalties are severe and the inspectors assessing employer compliance are not experienced immigration officials or employment law specialists.

One of the key features of the new enforcement regime is that it will allow employers who have not been wholly compliant to make voluntary disclosures of non-compliance, modeled after the Canada Revenue Agency's voluntary disclosure regime. Employers who discover, prior to being audited, that they have not fully complied with the TFWP and their attestations, can provide EDWL (formerly EDSC) with a voluntary disclosure to ensure that any future applications to employ foreign workers are not held up or delayed while they address or are assessed against past non-compliance.

The new enforcement regime, like the current compliance regime, will also permit the employer to offer justifications for any variations from the initial offer. These justifications will be considered but not always accepted. The employer will have to delineate the reasons for not having adhered to the terms of their offers and prove, if possible, that there was no detriment to the foreign worker in terms of the wages, working condition or occupation they were employed to carry out.  For large-scale transgressions, the impact of the violation on the Canadian labour market can also be evaluated.

In the event that the non-compliance cannot be justified or explained, an employer can be subject to a variety of consequences. These can range from a simple warning to bans from employing foreign workers for a period of 1, 2, 5, and 10 years or permanently. Additionally, the government now has the power to levy financial penalties against the employer ranging from $500 to $100,000 per violation depending on the severity and number of violations.

The possibility of having the company's name and details of the penalties listed on one or more government websites continues to be the shaming feature of the compliance regime. To date, only a handful of employers have had their names listed on the publically available ESDC employer blacklist. The government may develop more than one website which reveals employers that have been found offside the program.

In the past year, several companies have been quietly removed from the ESDC employer blacklist due to employer pushback or proof of adherence with the program. Under the new system, it appears that the government is seeking to have the names listed on the website indefinitely. I am certain that the new and improved process whereby the government plans to blacklist employers will soon be the subject of judicial review applications across Canada. Employers will not sit back and allow the government to permanently damage their company's name, reputation and ability to attract employees, customers and investors.  In my opinion, the previous Conservative government used the EDSC employer blacklist as a public relations tool, rather than a genuine roster of employers whose practices had been fully scrutinized prior to being added to the list. I can only hope the Liberal government will use the blacklist judiciously.

To date, the departments involved have released little information to employers and stakeholders as to what circumstances will propel the government to actually issue penalties to employers and move to publish their names. The enforcement officers who have been charged with administering the inspection branch of EDSC have shown little understanding of the regulatory provisions that govern them. I am afraid it will be some time before we see case officers who have a real handle on their mandate and the repercussions their decisions can have on a business.

For employers facing an employer compliance review or inspection as a result of employing a temporary foreign worker, it is advisable to seek legal counsel before offering any information or documentation to the inspectors assigned to your case.

Employers must be careful to ensure that they are providing only the information that is required by law and to ensure that they do not acquiesce to a fishing expedition for information that goes beyond the scope of the audit. From my experience over the last two years, I have routinely encountered inspectors seeking information that is onerous for an employer to produce. Though legally inspector can request any document or information to enable them to fulfil their mandates, often times requests for information can be discussed and curtailed by providing the inspector with insight about the practicality of furnishing the information that is being requested.

Employers need to know that the inspectors who are liaising with them are not necessarily the same officers that are rendering the final decision on compliance. There are supervisors and other management involved in the requests for additional employer records and the final decision-making process. Employers must assert their right to supervisory intervention when reviews are expanded after the initial employer disclosure or where new requests for significantly more information have been made and where an inspector suggests that there is an appearance of non-compliance that is unfounded on the evidence. It should be noted that under the new regime there is an opportunity to make legal submissions should a formal preliminary finding of non-compliance be rendered.

The new rules for employer compliance appear to be so strict that almost any employer can be found non-compliant for the most minor alteration to the terms of employment. Employer must take pro-active measures when it comes to hiring foreign workers. They must ensure that wages and benefits are not modified without assessing whether there is risk of a finding of non-compliance. Moreover, employers cannot change job duties, locations of employment or any working conditions that migrate from the exact terms of the approval issued by the government of Canada.

The test in regard to compliance audits is whether the employer has complied with substantially the same occupation, wages and working conditions as originally permitted by the LMIA or Offer of Employment (IMM5802 or Employer Portal). The reality is that inspectors are measuring employers against an "exactly the same" compliance test. The protection of foreign workers and maintaining public confidence in the program are touted to be the paramount factors for instituting such a strict regime. Clearly any changes that negatively impact a foreign worker will not bode well for an employer going through the audit process. In cases where a foreign worker has been detrimentally impacted, employers will need to rectify, if possible, the financial consequences to the foreign worker involved. Employers need to be mindful that even when non-compliance has been discovered or disclosed, efforts to remedy the problem in a timely manner will be viewed positively by the government.

As we move into a regime where civil servants will be tasked with meting out hefty financial penalties, employers need to be ready to defend their practices, especially when there is no detrimental impact to the foreign worker, other company employees or the Canadian labour market.

Under the Conservative government, foreign workers and their employers were demonized in the media. The current enforcement regime is the product of the Conservative government's agenda. One can only hope that the Liberal government will set in place a policy whereby only the most egregious cases will attract penalties, blacklisting and revocation of foreign worker approvals.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions