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.
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