The federal government recently implemented a more stringent compliance regime which directly affects employers using a work permit stream to hire foreign talent in Canada. New compliance and enforcement regulations are here to stay, including the most recent introduction of Administrative Monetary Penalties (“AMPs”) which took effect on December 1, 2015.
The government has committed to inspecting one in four employers in 2016 to assess compliance. Inspections may be randomly initiated, triggered by a whistleblower or other sources, or based on a previous finding of non-compliance. Inspectors have wide investigatory powers including on-site visits and interviews with foreign workers or other employees (with consent).
Employers also face a new range of consequences if non-compliance is found, including AMPs, bans from accessing the foreign worker programs, and online publication of details about the employer’s non-compliance. Voluntary disclosures are encouraged, but do not necessarily avoid AMPs.
What Employers Need to Do
Employers need to take the following steps as soon as possible, if they have not done so already:
- Audit the employment arrangements of all foreign workers and the employer’s business practices to ensure compliance with the conditions of the foreign worker program (listed in detail below);
- Audit the employer’s immigration records to ensure all documents relating to program compliance are being retained;
- Review the employer’s internal policies to ensure they properly support compliance with the conditions of the program;
- Address and remedy any non-compliance identified in the audit (legal advice is strongly recommended for this step); and
- Assess whether voluntary disclosure of any non-compliance needs to be made (legal advice is strongly recommended for this step).
Provide training as needed to ensure that the employer’s immigration and human resources professionals and other key persons understand:
- The required conditions associated with employing foreign workers;
- The record-keeping and retention requirements;
- The inspection process and protocols;
- The employer’s obligations in the inspection context; and
- The consequences of non-compliance.
Overview of the Foreign Worker Programs
International Mobility Program (“IMP”)
The IMP was introduced on June 20, 2014 with the reorganization of the Temporary Foreign Worker Program and the creation of two distinct immigration programs. Work permits are required, but the employer does not need to obtain a Labor Market Impact Assessment (“LMIA”) under the IMP.
The IMP is intended for hiring foreign workers who bring broad economic and cultural benefits to Canada. Intra-company transferees and professionals covered under free trade agreements typically fall under the IMP.
Temporary Foreign Worker Program (“TFWP”)
The employer needs to obtain an LMIA to use the TFWP. A LMIA is a verification process whereby Employment and Social Development Canada (“ESDC”) assesses an offer of employment to ensure that hiring a foreign worker will not have a negative impact on the Canadian labor market. A positive LMIA shows that there are no willing, able and qualified Canadians or permanent residents in the labor market to fill the particular job.
The TFWP seeks to address short-term labor shortages in the absence of available Canadians or permanent residents. The TFWP was overhauled as of June 20, 2014 with the introduction of tighter controls, stricter enforcement measures and more frequent inspections.
Compliance with Program Conditions and the Authority to Inspect
An employer who makes an offer of employment to a foreign national must comply with the following conditions under the Immigration and Refugee Protection Act (“IRPA”):
- Remain actively engaged in the business in respect of which the offer of employment was made;
- Comply with all federal and provincial laws that regulate employment and recruitment in the province where the foreign national works;
- Provide employment in the same occupation as listed in the offer of employment and with wages and working conditions that are substantially the same as – but not less favorable than – those in the offer;
- Make reasonable efforts to provide the foreign worker with a workplace free of abuse, including physical, sexual, psychological and financial abuse;
- Demonstrate that any information provided in relation to an offer of employment was accurate; and
- Retain any documents relating to program compliance.
Immigration, Refugees and Citizenship Canada (“IRCC”) has authority under the IRPA to ascertain whether an employer has complied with the above conditions. An employer can be selected for an inspection in three instances: (i) if there is reason to suspect non-compliance (information may come from a whistleblower or other sources, including media reports); (ii) if the employer has a previous history of non-compliance; or (iii) by random selection. ESDC and IRCC have committed to inspecting one in four employers to verify compliance and random inspections started in September of 2014.
An inspection may be initiated from the first day of the foreign worker’s employment for which a work permit has been issued, to a maximum of six years thereafter. Inspections may occur at any time during the six year period, even if the foreign worker has since repatriated back to his/her home country.
The Inspection Process and Employer Obligations
The inspection process is now more rigorous. Inspectors can conduct on-site inspections, including interviews with foreign workers or other employees (with consent). Investigators have broad powers which permit them to examine anything on the premises that is relevant to the inspection.
If selected for an inspection, employers are requested to submit documentation to justify their compliance. Employers are required to answer questions, provide documents and make reasonable efforts to do the following:
- Report at any specified time and place to answer questions and provide documents, or ensure that a representative is available to provide assistance;
- Provide any documents that are requested to verify compliance with specific conditions;
- Attend any inspection or ensure that a qualified or delegated employee attends any inspection, unless the employer was not notified of it; and
- Give all reasonable assistance to the person(s) conducting the inspection.
An employer may be found non-compliant if it refuses to cooperate during an inspection.
Employers found to be non-compliant have a 30 day opportunity to respond with new information for review by officers to inform final determination. However, a Final Determination is binding and cannot be appealed.
To encourage self-monitoring, if an employer finds they have violated program conditions, they may submit voluntary disclosure to IRCC outlining the non-compliance and employer response. If the voluntary disclosure is accepted and the violation is identified in a future inspection, the employer would be eligible for a point reduction (up to four points per violation) which may impact the consequences for non-compliance.
The Consequences of Non-Compliance
An employer who receives a Final Determination is now subject to the following consequences:
- Warning letter for minor violations;
- Bans of various lengths; and
- Publication online of the employer’s name and details of the non-compliance.
Penalties for non-compliance were previously limited to a two-year ban for all offenses and publication of the employer’s name without details about the non-compliance.
Administrative Monetary Penalties
AMPs can range from $500 to $100,000, with the total amount not to exceed one million over a one-year period (starting from the determination of non-compliance date). AMPs are cumulative and each violation is treated separately. AMPs are accumulated through a points-based system.
Employers who receive an AMP only (without a ban) remain eligible to use the IMP (or TFWP) if they pay promptly in full or undertake to follow a payment agreement.
In addition to AMPs, employers can be banned from accessing the IMP (or TFWP) for 1, 2, 5, or 10 years, or can receive a permanent ban for egregious non-compliance. Like AMPs, bans are accumulated through a points-based system.
Work permit applications (and LMIAs) will also be suspended or prevented from being processed. Work permit revocation from affected foreign nationals is also possible.
An employer who receives a Final Determination will have its business name and specific violation published online for an indefinite period on a public website. The stated reason for publication is to provide transparency to foreign nationals. However, it goes without saying that a publication can negatively impact the business beyond the immigration context.
Employers banned from accessing the IMP will be distinguished from those who are eligible. The employer’s name will not be published where the violation has resulted in a warning letter only.