Let’s Talk About LMIA Compliance Reviews
So the advertising and interview are done and the labour market impact assessment (LMIA) has been issued.
Maybe the new employee has even arrived in Canada with their work permit and social insurance number in-hand.
Tempting as it may be to assume that the LMIA process is now over, allow us this reminder: it is not.
Remember that LMIA form?
It contains an agreement to comply with all the Temporary Foreign Worker Program requirements, the Immigration and Refugee Protection Act (IRPA), and the Immigration and Refugee Protection Regulations (IRPR).
Now - presumably for saving space - the LMIA online form only links those requirements and laws rather than listing them.
Maybe it seemed onerous to click through those links.
Maybe the LMIA processing officer mentioned the requirements on the phone, but they didn’t seem remarkable.
No matter the situation, we’ve chosen 3 major highlights to discuss here (usual disclaimer: not exhaustive. We think of it as a very broad overview).
Highlight #1: There’s a 6-year Inspection Period
Employment and Social Development Canada (ESDC) can inspect businesses for LMIA compliance for six years starting from the start date of employment, per the work permit (i.e., the timeline runs from the work permit issuance date, not the LMIA issuance date).
Inspections can be random (i.e., not based on any particular suspicion).
Very generally, ESDC inspectors look to confirm that the information in the LMIA form was accurate and that the business is following all applicable labour and employment laws.
Highlight #2: ESDC has Broad Powers on Inspection
ESDC inspectors have the authority to show up at the employment premises unannounced. They also do not need a warrant (except when the employer is a private household).
ESDC inspectors are authorized to take photographs of the premises, as well as audio and video recordings. They can also require employers to use electronic devices on the premises for the purpose of examining relevant documents.
Highlight #3: There may be Serious Penalties for Non-Compliance
Yes, there are monetary penalties. It’s based on a complex points-based calculation, but the maximum is C$100,000 per violation, to a maximum of C$1 million for multiple violations per inspection period. The significance of these will of course vary based on the business.
But perhaps more consequential are these:
(a) ESDC can impose a period of ineligibility on hiring any foreign nationals on work permits (i.e., not only on LMIA-based work permits). Again, this is based on a complex points-based system, but the ineligibility period could range from one year to a permanent ban; and,
(b) No matter how significant the violation, Immigration, Refugees and Citizenship Canada (IRCC) publishes a list of all employers that have been found non-compliant under both the TFW Program and the International Mobility Program (for LMIA-exempt work permits). We won’t name names here, but just this month (July 2024), one Toronto employer received a C$72,000 penalty AND a 5-year ban.
TL;DR:
Signing an LMIA form comes with a 6-year commitment to follow all TFW program rules and immigration laws, and to remain subject to a compliance inspection, starting from the first day of the TFW’s employment.
ESDC inspectors can show up unannounced, and they have broad access to the employment premises.
Consequences for non-compliance range from monetary penalties to bans on hiring foreign workers. Either way, the names of all non-compliant employers go on a public list.
Bottom Line:
We recommend that employers start planning for compliance inspections well before signing that LMIA form.
BLPC is publishing this post for informational purposes only. This post does not contain legal advice or solicitation, nor does it create a solicitor-client relationship. Any views expressed are solely the author’s and should not be attributed to any other person or entity. The author makes no guarantees about the accuracy or adequacy of the information contained in this post, and is not offering free legal advice with respect to its subject-matter. If you are looking for legal advice on a specific matter, please contact us to request a consultation using the contact form on our website. You may also contact us by email at rachel@beaupreimmigration.ca, or 647-227-2605. Please note that any unsolicited information sent to us is not protected by solicitor-client privilege (please see our Terms of Use and Privacy Policy for more information).
