IRCC/CIC issued a program delivery update on employer compliance inspections on January 27, 2016 relating to LMIA-exempt work permits under the International Mobility Program (IMP).

This represents the first details relating to how inspectors will conduct employer inspections under the IMP side of Canada’s foreign worker regime since Canada introduced its new, more stringent administrative monetary penalty (AMP) regime on December 1, 2015.

See the program delivery update here.

Overview:

Under Canada’s immigration legislation, IRPA, government inspectors have broad powers to review whether an employer of temporary foreign workers (TFWs) is compliant with IRPA’s statutory conditions. An inspection may take place from the first day of employment for which a work permit is issued, and up to 6 years after that date.

Ultimately, if an inspection occurs and non-compliance is found, an employer may face administrative monetary penalties (AMPs) and/or could face a ban from the ability to utilize foreign workers.  Please see our article on the AMP regime here.

The January 27, 2016 program delivery update provides more information to employers on inspections relating to work permits issued under the IMP (such as intra-company transferee or Free Trade work permits).

Legislative Background

IRPA provides the inspection authority and places conditions on employers. The statutory conditions are placed on employers upon the issuance of a work permit. The conditions are applicable during the period of any work permit, but an inspection relating to compliance can occur up to 6 years after the work permit is issued.

Statutory obligations placed on an employer include the following:

  • Must comply with all federal and provincial laws that regulate employment and the recruitment of employees in the province where the TFW works
  • Must provide the TFW with employment in the same occupation as that set out in the Offer of Employment and with wages and working conditions that are substantially the same as, but not less favourable than, those set out in the offer of employment.
  • Must demonstrate any information provided in relation to an Offer of Employment was accurate
  • Must retain any documents relating to statutory compliance

If an employer discovers that they are not compliant with all statutory requirements, legal advice should be sought as soon as possible. Corrective action should be considered, as well as the potential of voluntary disclosure under the AMP regime.

Assessing Compliance

The program delivery update provides information on how investigating officers will assess the various compliance conditions set out under the legislation for the IMP regime. We have highlighted some points below.  Please review the entire program delivery update for complete details.

Compliance with Federal and Provincial Laws

Regarding compliance with Federal and Provincial employment and recruitment legislation, employers should note the following points:

  • Verification will focus on the employer’s compliance record from the date of work permit issuance.
  • Employers must be compliant with any Federal or Provincial law that might be applicable e.g. employment standards, labour law, health & safety, workplace privacy, recruitment legislation etc.  The specific statutes an employer must comply with will depend on whether the employer is federally or provincially regulated, and what province the TFW will work in.
  • Employers must “not be convicted of any offence, or be found in violation of any Federal, Provincial or Territorial law governing employment or recruitment from the date the worker arrives.”

The first bullet point suggests that first time users of TFWs may be able to address any current non-compliance prior to the start date of their first TFW. 

With regards to the last bullet point, it is not clear when non-compliance is “crystallized”; for example, can there by some types of violations that may only lead to warnings and corrective action (for example a warning from a provincial ministry of labour of a failure to post required information at the employer’s site) that would not be considered a breach that leads to non-compliance under IRPA?  An employment lawyer may need to be consulted to determine the question of what constitutes “found in violation”.

Changes to Occupation, Wages or Working Conditions

This may be the most problematic condition for employers.

In the case of LMIA based work permits under the Temporary Foreign Worker Program, employers are bound to maintain the occupation, wages and employment terms set out in the LMIA confirmation. Changes may require a new LMIA and work permit. If changes occur, there is also a mechanism to inform Service Canada and/or to provide “voluntary disclosure” via Service Canada under the AMP regime.

For LMIA-exempt work permits under the IMP, the same condition applies i.e. employers must provide substantially the same occupation, wages and working conditions. The January 27, 2016 program delivery update provides some guidance to employers, but also leaves some questions.

If the occupation changes such that the job itself would be under a different National Occupation Classification (NOC) code (NOC codes are set out here), then a new Offer of Employment must be filed and a new work permit must be obtained.

Acceptable changes to job duties would include only those that are covered by the same NOC as “any [new] duties that fall outside of the approved NOC are considered as not the same”.

The “Offer of Employment” refers to IRCC/CIC’s requirement that employers upload to their Employer Portal certain information related to any employer specific LMIA-exempt work permit that an employer seeks to obtain for a TFW (see our article on the Employer Portal here)

The January 27 update states that:

“Where the employer has promoted or otherwise changed the foreign worker’s duties, the foreign worker must receive a new offer of employment and work permit prior to implementing the change. If a new work permit for the promotion or change in occupation has not been previously approved and the temporary foreign worker is found to be working in an occupation other than what was stated on the Offer of Employment, this constitutes non-compliance by the employer. It could also lead to enforcement action against the foreign worker for unauthorized work."

It is not clear if IRCC/CIC will differentiate between promoting the TFW vs. changing the duties so that the NOC code changes. For example, some NOC codes in the managerial and professional areas are very broad and it would be possible for a TFW to be promoted where the job itself would continue to have the same NOC. It is unclear whether a new work permit would be needed in such a situation prior to implementing the promotion. Legal advice should be sought before any changes are implemented.

As for wages, the wages cannot be less than those outlined in the Employer Portal Offer of Employment provided by the employer to IRCC prior to the hiring of the TFW.

The program delivery update confirms that TFWs may be paid in a foreign currency “so long as the foreign worker is paid the Canadian equivalent wage stated in the offer of employment throughout the period of employment”. This seems to be a difficult requirement. For example, if an intra-company transferee from the U.S. will remain on U.S. payroll and only come to Canada intermittently, does this mean that the Canadian employer must somehow ensure that the related U.S. employer changes the salary as exchange rates fluctuate to ensure that the “Canadian equivalent wage” in the original offer of employment is maintained?

Unlike LMIA based work permit situations, there does not seem to be a clear mechanism to advise IRCC/CIC of changes such as salary increases.  CIC has indicated that it does not need to be made aware of such increases in LMIA-exempt work permit situations; however, employers would have to be able to provide information and justification for such an increase if inspected, since the new salary would no longer coincide with the Offer of Employment information uploaded via the Employer Portal.  Note that if the increase is coupled with a change in occupation, before it occurs a new Offer of Employment and new work permit will likely be needed prior to implementing the change. 

There is also not a clear mechanism (as of February 2016) to provide voluntary disclosure of non-compliance or potential non-compliance to IRCC/CIC under the AMP regime.  

Abuse-Free Work Environment

Under IRPA, employers have a statutory requirement to ensure that an abuse-free workplace is provided. Reports of abuse could lead to an inspection.

The program delivery update indicates that an employer must “demonstrate that positive, concrete steps have been taken to prevent workplace abuse and, where allegations of abuse are made or an actual incident has occurred, must take reasonable steps to respond and to prevent to any reoccurrence”.

Employers that engage TFWs should ensure that they have policies and procedures in place to protect workers and in particular should ensure that managers are aware of these policies.  Employers may face non-compliance findings if their managers or employees instigate, perpetuate or fail to prevent workplace abuse.  Employers may want to get legal advice from one of our employment lawyers regarding what policies and procedures they should have in place.

Document Retention

IRPA places an onerous requirement on employers in regards to document retention.  Employers must be able to demonstrate that any information they provided in the Employer Portal “Offer of Employment” and/or for a work permit application was accurate.  Employers must also retain “any document” that relates to compliance with the various conditions imposed on employers by IRPA.

This documentation must be retained for a period of six years, beginning from when the underlying work permit was issued.

Officers conducting employer inspections (whether it relates to a LMIA or LMIA-exempt work permit situation) can demand to see specific documents or ask an employer to provide whatever documents the employer has to demonstrate compliance.  Most inspections will be paper-based and as such the inspection officer will send the employer a list of documents that will need to be provided back to the officer.

It happens that, the inspecting officer could make a finding of non-compliance under IRPA, and assess penalties under the AMP regime, where in the officer’s mind the employer has not retained all documents that could demonstrate compliance. Hopefully, if an employer is otherwise compliant with IRPA’s conditions, inspecting officers will use a concern about document retention as an opportunity to work with employers to suggest improvements, rather than make a non-compliance finding.

The program delivery update provides a non-exhaustive list of documents that inspectors may want to review to verify employer compliance.  Employers should review that list carefully as it provides insight into the types of documents they need to retain.

If necessary, employers should enhance their document retention policies and practices to ensure that they can demonstrate compliance with IRPA’s conditions for the prescribed time period (up to 6 years from the issuance of any specific work permit) and that they can produce the types of documents listed.

Conclusion

Employers that employ TFWs need to be keenly aware of the myriad of compliance rules and requirements relating to Canada’s IMP and TFWP regimes.  A finding of non-compliance can lead to Canadian authorities banning an employer from being able to hire or utilize TFWs.  Policies and practices need to be implemented to support ongoing compliance, and employers need to make their managers and personnel aware of the requirements to avoid accidental breaches, such as promoting a TFW without first determining if a new work permit needs to be obtained.

If an employer discovers non-compliance, legal advice should be sought to consider how to address it and to consider whether voluntary disclosure under the AMP regime should be made.  It would be better to discovery and deal with any issues prior to facing an actual inspection.