Employers Face More Inspections & New Penalties Under the New Temporary Foreign Worker Regime (TFWP) Effective December 1, 2015

As of December 1, 2015, the new Temporary Foreign Worker Program (TFWP) and the International Mobility Program (IMP) regulations took effect. The new regime makes compliance inspections easier and creates new penalties for non-compliance. And this means employers using the Programs need to comply – and be ready to prove that they did.

THE NEW REGIME

In June 2014, public protest over perceived abuse of the TFWP led the federal government to reform it. But employers met these reforms with concern, and with good reason: any kind of a breach, regardless of its severity, could result in a two year ban from using the TFWP. In response, the government solicited feedback, revisited the reforms and introduced new regulations that took effect on December 1, 2015. The federal departments of Citizenship and Immigration Canada and Employment and Social Development Canada (ESDC) will implement the new regime. The new regime makes it easier for ESDC to inspect employers for compliance with the Programs by giving it the authority to conduct random inspections; before the reforms, ESDC required a “trigger” to allow it to conduct an inspection. And the government says it will use that authority: it has committed to inspecting one in four employers of foreign nationals through the Program. The new regime also introduces new penalties that will be proportionate to the severity of the breach. The penalties will apply to employers of foreign nationals employed under either Program and to Canadians hiring foreign caregivers. Here are the key features of the penalties under the new regime:

Ban from Program Use. Employers that don’t comply with the conditions of either Program after December 1^st, 2015 could be subject to a penalty of a one, two, five or 10 year ban from use of the Program(s).

Administrative Monetary Penalties. In addition to a ban, the new regime implements a system of administrative monetary penalties (AMPs) with fines ranging from $500 to $100,000 per violation. AMPs are cumulative and distinct: the same violation relating to multiple foreign national workers counts as separate violations. For purposes of determining the appropriate amount of the monetary penalty, the new regulations categorize violations into three “Types”:

• Type A. Examples of a Type A violation include: failure to demonstrate that any information provided in a work permit application, such as proposed salary, proposed job title, proposed job duties, employee’s educational background, or employee’s professional experience, was accurate; and failure to provide documents required for a compliance review.
• Type B. Examples of a Type B violation include: failure to comply with federal and provincial laws relating to the employment or recruitment of employees; and failure to fulfill obligations that led to the issuance of the work permit, including hiring, retaining or training of Canadians or permanent residents, transferring skills and knowledge to Canadians or permanent residents and creating jobs for Canadians or permanent residents.
• Type C. Examples of Type C violations include failure to make a reasonable effort to provide a workplace that is free of abuse and failure to establish that the company is actively engaged in the business in which the offer of employment was made.

In addition to the violation type, the amount of the AMP will be determined based on factors such as the employer’s compliance history and the severity of the violation.

Voluntary Disclosure & Justification. The new regime encourages employer voluntary disclosure by reducing the severity of the penalty for employers that disclose violations before ESDC initiates an investigation. If ESDC does make any preliminary findings of non-compliance, employers will also have the opportunity to make written submissions to justify that non-compliance. ESDC will consider a limited range of justifications, such as errors made in good faith, reasonable efforts to comply, or violations that resulted from a genuine misinterpretation of an employer’s obligations.

The “Blacklist”. Of significant consequence, employers that commit an “unjustified” violation will find their names published on a “blacklist” on one or more Government of Canada websites.

FIVE TIPS TO BE PREPARED FOR AN INVESTIGATION If ESDC meets its commitment, the number of inspections for compliance with the Programs will increase. This increased likelihood of a random inspection coupled with stricter penalties means employers need to comply – and be ready to prove their compliance. Here are five tips to help employers be prepared for a compliance investigation:

1. Be proactive. Employers should ensure they are compliant with the program requirements as soon as they begin to prepare an application for a Labour Market Impact Assessment (LMIA) or a work permit for temporary foreign workers, and throughout the employment relationship. Implementation of comprehensive policies and procedures to address the employer’s statutory obligations to provide a safe workplace free of abuse, following them and dealing immediately with any issues will help ensure compliance from the get-go.
2. Make & keep detailed records. Inspectors have the authority to demand that an employer produce any document necessary to demonstrate its compliance with both the terms of any LMIA and labour and health and safety laws. Even recruitment is subject to compliance inspection. An employer must be able to prove that it properly tested the Canadian labour market and included all relevant information in its LMIA application. Under the new regime, employers must keep any relevant documents for six years from the date of employment of a particular worker.
3. Be honest. An employer needs to carry everything it says in a LMIA application through for the duration of the employment under the Program. If an employer wants to change the terms and conditions of employment of a worker it employs under a Program, it should ensure a process is in place to do so and that it consistently adheres to that process.
4. Voluntary disclosure. To benefit from the voluntary disclosure provisions under the new regime, the employer must make that voluntary disclosure before ESDC has started an inspection.
5. Privacy. Employers must still comply with privacy laws. They should redact all personal information in any documents they produce for an inspection.

Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper McInnes Cooper Immigration Team to discuss this topic or any other legal issue.

McInnes Cooper has prepared this document for information only; it is not intended to be legal advice.  You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.

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