Canada: Giving Foreign Workers Their Due

Last Updated: June 29 2017
Article by Julie Lessard

Focusing on fairness and compliance when compensating temporary foreign workers

In today's fierce competition for global talent, employers are designing innovative   compensation and benefits systems that strike the right balance between internal equity and external competitiveness. While being creative in finding ways to reach these objectives, employers should believe equity is critically important because perceived unfairness can adversely affect any organization's ability to attract and retain talent.

While the principle of equity re-mains central, employers recruiting and hiring temporary foreign workers (TFWs) are operating on a whole new level of complexity when dealing with the issues of fairness and compliance.

Temporary foreign workers

Employers using the Temporary Foreign Worker Program (TFWP) or the International Mobility Program (IMP) must comply with government-imposed wage requirements that may substantially differ from their normal practices and corporate philosophy in terms of wages and compensation.

To receive a positive Labour Market Impact Assessment (LMIA) under the TFWP, employers must declare they "will comply with the prevailing wage requirements and agree to review and adjust, when applicable, the TFWs wages, at least annually, to ensure he/she continues to receive the prevailing wage for the occupation and region where he/ she is employed."

The prevailing wage is defined as the highest of either the median wage listed on Canada's Job Bank or the wage that is within the wage range the employer is paying cur-rent employees hired for the same job and work location, and with the same skills and years of experience.

The median wage on Job Bank is calculated based on Canada's official system classifying jobs into occupational groups, the National Occupation Classification (NOC) system.

After identifying the NOC that best suits the duties and the requirements for the position offered, the wage that must be used is, at a minimum, the median wage, even if the job offered is entry-level (except in Quebec where the wage requirement is calculated differently). If the job offered requires additional experience, the salary must meet the higher scale.

The median wage includes only the guaranteed wage, excluding specifically overtime hours, tips, benefits, profit sharing, bonuses, commissions or other forms of un-guaranteed wages.

The details of all categories of work permits that can be issued un-der the stream of the IMP are out-side the scope of this article.

Nonetheless, it is important to note that since program changes were introduced in 2014, the pre-vailing wage requirement equally applies to TFWs entering Canada under the Intra-Company Trans-ferees or Specialized Knowledge Category.

Impact on employers

While the median wage is based on statistics for specific occupations in specific geographic locations, employers may need to increase the offer to a TFW so it meets the pre-vailing wage requirement.

This is especially true for entry-level positions where the employer participating in the TFWP must still pay the median wage. In such cases, internal inequity between Canadian and foreign workers can result from the employer's effort to comply with the TFWP requirements.

In the context of the TFWP, the median salary payment requirement rule is applied to the letter. This means employers are unable to obtain positive LMIA opinions if the prevailing wage is not met, effectively forcing them to create internal inequity between TFWP and Canadians, particularly at entry-level positions.

The absurdity of the situation could be disputed, as it was successfully done in the 2016 Paturel International Co v. Canada (Minister of Employment and Social Development) where the Federal Court ruled the prevailing wage was too high in the unique circumstances of this case and it was not representative of the wages paid by employers in the region.

However, this decision has not changed the adjudications practice at the administrative level of the TFWP.

Meanwhile, few employers have the resources and perseverance required to have such situations heard in Federal Court.

Employers' strategies to offer attractive packages, merit-based compensation and creative incentives can also fire back in the context of the current regulation.

Under the current rule, any pro-gram putting greater emphasis on bonuses or compensation tied to performance rather than fixed salary, programs favouring flex time, lieu time, overtime or any other policy based on unguaranteed, merit-based wages may be found non-compliant with the prevailing wage requirements under the TFWP.

The result is the creation of two categories of workers: local workers and TFWs.

Ensuring compliance On Nov. 1, 2016, the NOC 2016 was introduced to update the NOC  2011 with new market analysis, and prevailing wages were updated for many occupations on the Job Bank website.

Such changes can have an impact not only on future applications for TFWs but also on existing immigration-based work permits already issued.

In LMIA applications, employers not only declare that they actually comply with the requirement, they undertake the obligation of future compliance, declaring they will ensure the TFW will continue to receive the prevailing wage for the occupation and region where he is employed.

Accordingly, to be compliant un-der the TFWP, employers have a positive duty to identify the potential impact of the prevailing wages update on existing LMIA-based TFWs.

If the new median wage is higher than the wage previously included on the LMIA or the employee's actual wage, the salary may need to be increased — even if this could lead to a more favourable treatment of the TFW than other workers similarly employed by the organization.

These changes will also impact the eligibility criteria for applications under the Intra-Company Transferees/Specialized Knowledge Category.

Best practices

The issues raised above are only the beginning of a profound discussion about additional obligations imposed on employers across the country with respect to a non-Canadian workforce.

Yet another illustration of the additional burden on employers is any salary change including routine annual reviews should be disclosed in writing to Service Canada for all LMIA-based applications.

Failure to do so could lead to non-compliance if the employer is audited.

Traditionally, systems in place for compensation and salary con-formity verified compliance with legislation in areas such as labour standards, equal pay, labour rela¬tions and human rights.

Today, employers need entirely new human resources toolkits to ensure they are also in compliance with immigration-related legislation.

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

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

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
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
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 (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

To Use 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.


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.


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