In June 2014, the federal government introduced changes to the Temporary Foreign Worker Program ("TFWP"). These changes were intended to encourage employers to put more effort into hiring Canadian workers by making it more difficult and expensive for them to hire temporary foreign workers ("TFW"s). The changes to the TFWP have largely been deemed to be "successful" - but, some say, the success may be coming at the expense of legitimate Canadian interests.
Employment and Social Development Canada ("ESDC") has circulated a Discussion Paper (PDF) which contains a framework for its plans to enforce compliance with the changes to the TFWP and a summary of possible penalties for employer non-compliance.
The Discussion Paper sets out an aggressive program for penalizing non-compliant employers. Indeed, the Discussion Paper goes so far as to say that even good faith and inadvertent errors by employers - that are subsequently corrected - could still be subject to penalty:
Regulatory amendments to the existing justifications would be introduced so that consequences could be imposed on non-compliant employers regardless of whether they take corrective action. Specifically, non-compliance resulting from good faith errors and unintentional accounting or administrative errors would be subject to consequences such as an AMP and/or a ban, and the employer's name would be published. The employer's response to the violation (e.g., repaying wages) would be taken into account in determining the AMP amount or the length of the ban so that there is still an incentive for the employer to take corrective action.
Overview of the Penalty Provisions of the Proposed Compliance Framework
The Discussion Paper provides for Administrative Monetary Penalties (AMPs) and a possible ban on employers from accessing the TFWP where there have been violations relating to:
- the genuineness of the job offer
- the employment of a live-in care-giver
- wages, occupation and working conditions
- reasonable efforts to provide a workplace free from abuse
- labour market impact
- reporting and document retention
- cooperation during inspections
The Discussion Paper proposes a points-based system for assessing AMPs. Violations are categorized as Type A, B or C offences. Points are then assessed based on whether the violation is an employer's first violation or a repeat violation (one to two points) and on the severity of the conduct (one to six points). The AMPs are then assessed based on the number of points "awarded" and the size of the employer.
The Discussion Paper sets out a grid for the allocation of points and the applicable sanctions:
Click here to view the table
* All Type C violations will have two points on Table 2.
It should be noted that where a violation affects more than one TFW, it will be treated as more than one violation. For example, if an employer's payroll department makes a good faith, inadvertent error that causes eight TFWs to be paid something other than "substantially the same" wage as provided in the Labour Market Impact Assessment ("LMIA"), that employer would be assessed eight points and be liable for a $100,000 penalty, even if the inadvertent error had been corrected.
The Discussion Paper notes that certain types of noncompliance may be "justified" under the Immigration and Refugee Protection Act and Regulations, and would not be subject to penalty. However, the definition of "justification" under the Act and Regulations is quite narrow, including only:
- a change in a federal or provincial law
- a change to the provisions of a collective agreement
- changes due to a "dramatic change in economic conditions" so long as TFWs are not disproportionately affected
And while good faith and inadvertent errors may be "justified" for other reasons under the proposed compliance framework, this would not exempt an employer from AMPs or shield the employer from a ban on using the TFWP. Thus, in at least some cases, the proposed compliance framework appears to impose penalties that are out of proportion to the nature or impact of the employer's non-compliance.
ESDC accepted comments on the Discussion Paper until mid-October 2014, and the government's response is now expected in the near future. We will keep you updated with any further developments.