Immigration Law Compliance: 5 Key Best Practices for Human Resources Professionals
January 31, 2019
By Meghan Felt, Partner at McInnes Cooper,
Morganne Foley, Lawyer at McInnes Cooper
There’s no shortage of warnings of a worker shortage in Canada – and the consensus seems to be that it’s only going to get worse. The challenge isn’t isolated to any one Canadian region, business size, corporate structure, industry or occupation. Neither is the solution: Canadian businesses are consistently looking to immigration to help solve the current and looming workplace shortages they face. But attracting and keeping Temporary Foreign Workers isn’t the only challenge Canadian employers face. It can be tough for employers to stay up to speed on changing immigration rules: the federal and provincial and territorial governments are frequently adding new immigration policies and programs, and updating existing ones. For example:
- In late 2018, the United States-Mexico-Canada Agreement (USMCA) replaced the North American Free Trade Agreement (NAFTA) – including its immigration-related provisions allowing cross-border mobility between Canada, the U.S. and Mexico. The extent to which the new USMCA will be different from NAFTA, including its highly beneficial exemptions from the Labour Market Impact Assessment (LMIA) process, isn’t yet completely clear, although it’s anticipated it won’t be significant.
- All Canadian provinces and territories offer a Provincial Nominee Program (PNP) that includes multiple immigration “streams”. While they share many common themes, each offers varying “streams” and each regularly introduces new ones and closes others. For example, in 2018: Nova Scotia introduced a “Physician Stream” to its PNP; Prince Edward Island closed the 100% and Partial Ownership streams under its PNP; New Brunswick “paused” the Entrepreneurial Stream under its PNP; and Newfoundland and Labrador opened two new Entrepreneur streams.
- In 2017, the federal government introduced the Global Talent Stream, the central pillar of its Global Skills Strategy, an immigration program designed to help high-growth, innovative businesses bring unique and specialized global talent to Canada in a timely manner.
- In 2017, the governments of the four Atlantic provinces and the federal government announced the three year Atlantic Immigration Pilot Program (AIPP) under the Atlantic Growth Strategy, designed to boost immigration to the region and to test innovative approaches to retaining immigrants.
What doesn’t change, however, is the requirement that an employer that hires a Temporary Foreign Worker in Canada comply with immigration laws, or both it and the Worker could face legal compliance enforcement mechanisms – with teeth.
Compliance Enforcement Regime
Canada’s Immigration and Refugee Protection Act (IRPA) makes it an offence to employ a Temporary Foreign Worker in a capacity in which that Worker isn’t authorized to be employed. “Temporary Foreign Worker” generally refers to someone who’s not a Canadian citizen or Permanent Resident, but is legally and temporarily in Canada for the purpose of working, whether under the Temporary Foreign Worker Program (TFWP), the International Mobility Program (IMP), or any other federal or provincial or territorial immigration program. Most employers that employ a Temporary Foreign Worker are subject to legal mechanisms to monitor compliance with the IRPA:
- Record-keeping. They must keep all records relating to a Temporary Foreign Worker(s) for six years.
- Random Audits. Employment and Social Development Canada (ESDC) is authorized to conduct random audits of the records of most organizations that employ a Temporary Foreign Worker(s).
The risks of non-compliance are high for the employer and the Workers.
Employer Non-Compliance Risks. Non-compliant employers face a range of consequences:
- Monetary Fines. The IRPA authorizes the imposition of fines of up to $50,000, depending on the type of conviction (summary or indictable), for the offence of employing a Temporary Foreign Worker in a capacity in which that Worker isn’t authorized to be employed.
- Jail Time. The IRPA also authorizes imprisonment for up to two years, again depending on the type of conviction (summary or indictable), for the offence of employing a Temporary Foreign Worker in a capacity in which that Worker isn’t authorized to be employed. This isn’t an empty threat. In 2018, a businesswoman in Alberta was charged and convicted under the IRPA – and sentenced to two years’ imprisonment for employing Temporary Foreign Workers in a capacity for which they weren’t authorized to be employed (as well as knowingly communicating false or misleading information or declarations with intent to induce immigration to Canada) (read the Edmonton Journal’s May 24, 2016 report here).
- Hiring Ban. ESDC is authorized to impose on an organization a ban from applying for Labour Market Impact Assessments (LMIAs, generally a key rule when hiring a Temporary Foreign Worker) for one, two, five or 10 years – or permanently for the most serious violations. This effectively prohibits the organization from hiring Temporary Foreign Workers for the duration of the ban.
- Naming & Shaming. And don’t forget the persuasive power of a public naming and shaming: employers that hire Temporary Foreign Workers under certain programs and don’t comply with the rules can find themselves on the Employment and Social Development Canada’s (ESDC) publicly available “blacklist”.
Worker Non-Compliance Risks. The consequences for Temporary Foreign Workers who don’t comply with Canadian immigration laws and rules can be equally severe, and include:
- Detention in Canada.
- Proceedings to deport them or remove them from Canada.
- Difficulties entering Canada in the future.
- Difficulty in obtaining Permanent Residency in Canada.
- In the case of a misrepresentation, a ban of up to five years on re-applying for entry into Canada.
5 Key Immigration Law Compliance Best Practices
The IRPA expressly states that, “a person [which can be either a natural person or a corporation] who fails to exercise due diligence to determine whether employment is authorized under [IRPA] is deemed to know that it is unauthorized.” This presumption makes it critical for employers to exercise due diligence to ensure Temporary Foreign Workers are authorized for their employment in order to mitigate their exposure to the risks of non-compliance with immigration law requirements.
Here are five of the key best practices that Canadian employers of Temporary Foreign Workers can implement to help mitigate the non-compliance risks. It bears noting, however: immigration laws and rules are in addition to – and not a replacement for – basic labour and employment laws and principles, all of which continue to apply. These include employment / labour standards laws, occupational health and safety laws, termination notice (including “reasonable notice” or contractual notice) requirements, source deduction obligations and liabilities, and collective bargaining obligations.
- Know the rules and processes.
Start by knowing the rules that apply to the hiring and the employment of Temporary Foreign Workers – or at least know where to find them.
Key legal sources. The key sources for the laws and the rules that regulate the hiring and employment of Temporary Foreign Workers in Canada are:
Key regulatory bodies. The key government agencies that play a role in the regulation of the hiring and employment of Temporary Foreign Workers in Canada are:
Key rules & processes. Many rules apply when a Canadian employer wants to hire and employ one or more Temporary Foreign Workers. Three of the key ones are:
- Work Permit. The Work Permit (a.k.a. the “Work Visa” in some countries) is the basic immigration instrument authorizing “foreign nationals” (someone who’s not a Canadian citizen or a “Permanent Resident”) to enter Canada to work as a Temporary Foreign Worker. The IRPA prohibits a foreign national from entering Canada to “work” without first obtaining one. In determining whether a foreign national is entering Canada for the purpose of “work” – and thus requires a Work Permit – the IRPA focuses on the foreign national’s activities rather than how they (or anyone else, including the prospective employer) classifies the arrangement. Section 8(1) of the IRPA defines “work” as an activity: for which wages are paid or commission is earned; or that is in direct competition with the activities of Canadian citizens or Permanent Residents in the Canadian labour market. So for example, a foreign national who a Canadian organization might call a “volunteer” simply because they aren’t paid could very well be (and probably is) “working” within the meaning of the IRPA if that “work” would normally be paid, and thus require a Work Permit. There are two types of Work Permit: “Employer-Specific Work Permits”, which allows a Temporary Foreign Worker to work according to the conditions on the Work Permit; and “Open Work Permits”, which are not job-specific. There are, of course, also exceptions to the requirement for a Work Permit at all (such as, for example, students, performing artists, guest speakers, those defined as “Business Visitors”, and short-term work pursuant to the federal Global Skills Strategy Work Permit exemption, among many others).
- Labour Market Impact Assessment (LMIA). Generally, before the federal government will issue a Work Permit, the prospective Canadian employer must first obtain the government’s permission to hire a Temporary Foreign Worker in the form of a Labour Market Impact Assessment (LMIA). The LMIA process can be lengthy and costly. The prospective employer must apply for the LMIA and pay the application fee (currently $1,000). Generally, to obtain an LMIA, the applicant employer must demonstrate the absence of qualified Canadian applicants and must pay prevailing wages (by both province and occupation). Changes to the LMIA guidelines are frequent, and the nuances to the process numerous; for example, there are strict advertising requirements (and some exemptions). The processing time ranges from 10 business days to several months depending on the wage being paid and the province or territory of employment. Like Work Permits, there are also many circumstances in which employers are exempt from the requirement to have an LMIA as a prerequisite for ESDC to issue a Work Permit. Such circumstances include, for example, employment under the International Mobility Program (IMP), which includes Intra-Company Transferees and exemptions resulting from the operation of international trade agreements (such as the former NAFTA, the General Agreement on Trade in Services (GATS) and the Canada-European Union Comprehensive Economic Trade Agreement (CETA)). Open Work Permits are also exempt from the LMIA prerequisite.
- On-Line Offer of Employment. Employers seeking to hire a Temporary Foreign Worker in circumstances exempt from the requirement to obtain an LMIA must typically instead submit an On-Line Offer of Employment as a prerequisite for issuance of a Work Permit, although Open Work Permits are also exempt from this requirement. The On-Line Offer of Employment process is generally faster, easier and less expensive than the LMIA process. For example, the employer isn’t required to demonstrate the absence of qualified Canadian applicants, the required supporting documents depend on the application type and the processing fee is lower (currently $230).
- Conduct a Work Permit review.
A critical component of due diligence is to review the Temporary Foreign Worker’s Work Permit, focusing on these key fields to confirm they are complete – and accurate:
- The Worker’s name (currently family name and given name(s)).
- The Worker’s “personal data” (currently their date of birth, sex, country of birth and of citizenship, and travel document number, such as their passport).
- The Work Permit expiry date.
- The employer’s name and location.
- The Worker’s occupation.
- Any other notes, comments or conditions (for example, a prohibition from working in the health field).
- Conduct a Labour Market Impact Assessment or Online Offer of Employment review.
Due diligence also entails a review of the LMIA or the Online Offer of Employment, as the case may be and where one is required, for both accuracy and for consistency between it and the Temporary Foreign Worker’s:
- Work Permit.
- Employment contract.
- Actual working conditions (such as their wages, benefits, hours of work, job description and job duties, location of employment, and so on).
- Conduct an employment contract review.
Utilizing a well-drafted and properly implemented written employment contract is a best practice for all employers. This applies equally to the employment of Temporary Foreign Workers. Due diligence includes reviewing the employment contract to ensure its terms are consistent with the relevant LMIA or Online Offer of Employment, if and as applicable, including these key terms:
- Hours of work.
- Job description.
- Job duties and location of employment.
- Make and maintain complete and accurate records (and keep them handy).
The requirement that employers keep records respecting Temporary Foreign Workers for six years – and the power of ESDC to conduct random audits of those records – means employers need to be prepared; and even though employers of Temporary Foreign Workers under an Open Work Permit aren’t subject to this record maintenance requirement and audit power, it’s still good practice:
- File. Create and maintain a current, well-organized and readily accessible file for each Worker that contains a copy of their respective immigration authorization (Work Permit), LMIA or Online Offer of Employment (as applicable), employment contract, timesheets, passport, T4s, record of employment, and so on.
- Review. Review all business records, including all payroll records, time sheets and Canada Revenue Agency (CRA) filings (T4s, for example), to ensure they are consistent with the Worker’s LMIA or Online Offer of Employment, as applicable, and their Work Permit.
Please contact your McInnes Cooper lawyer or any member of the Immigration Law Team @ McInnes Cooper 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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