Corporate Immigration Compliance
Regulatory changes to the Temporary Foreign Worker Program
Since 2011 the Canadian Temporary Foreign Worker Program (TFWP)/International Mobility Program (IMP) have undergone a significant evolution to a program of last resort, heavy on enforcement or more specifically, Canadian employer compliance. The goal being the protection of Canada’s labour market and furnishing Employment and Social Development Canada (ESDC) the legal means to enforce, educate and ban non-complaint employers. The changes have altered expectations, raised many interesting legal issues and presented new challenges for employers and lawyers. Much of the criticism directed to the evolving compliance regime is related to the legal scope of the enforcement measures as well as predictability and transparency in Labour Market Impact Assessments (LMIA – previously Labour Market Opinions (LMOs) and compliance.
What are the Legal Means to Review Employer Compliance?
The methods used to verify employer compliance include an Employer Compliance Review (ECR); a review under Ministerial Instruction and an inspection. Generally the results can result in a finding of “satisfactory”, meaning that the employer has demonstrated compliance with the inspected conditions or has justified its non-compliance per the Regulations, or the employer is found to be “non-compliant”, meaning the employer has not demonstrated compliance with the inspected conditions or cannot justify its non-compliance per the Regulations. The consequences for non-compliance will be discussed in detail below.
Employer Compliance Review
ECRs are used as a mechanism to verify past compliance and triggered as part of an LMIA application process. The purpose of an ECR is to authorize ESDC, in the course of reviewing an LMIA application; to perform a compliance review of all formerly issued positive LMIA or LMO decisions for an employer. An ECR assesses compliance with TFWP wages, working conditions, and occupation requirements. 
Prior to 2014, employers were only required to demonstrate that the wages, working conditions and occupation were “substantially the same” as those offered in the offer of employment. On 31 December 2013, changes to the Regulations introduced more rigorous requirements for employers by imposing a requirement on employers to ensure that foreign workers are:
- Employed in the same occupation that was set out in the offer of employment;
- Provided with wages that are substantially the same but not less favourable than those set out in the offer of employment; and
- Provided with working conditions that are substantially the same but not less favourable than those set out in the offer of employment.
The amendments also increased the authority of ESDC to review an employer’s compliance for up to six years prior to the receipt of the LMIA application, up from two years. It is important to note that the six year review period for past LMIA/LMO applications under an ECR does not appear to be retroactive or retrospective. The regulatory amendments, as published in the Canada Gazette do not contain transitional provisions with respect to this provision. ESDC’s interpretation of this provision however appears to indicate the new six year provision would not be retroactive/retrospective. Therefore, for LMO/LMIAs obtained prior to 1 January 2014, the test remains whether the elements were “substantially the same” and a 2 year review period rather than 6 years. Employers do have an opportunity to provide justifications for initial findings of non-compliance, however there are limited justifications for non-compliance available at section 203(1.1). Employers found non-compliant at the end of an ECR are subject to the following consequences:
- A ban of two years from the TFWP and International Mobility Program;
- A negative LMIA issued for any pending applications; and/or
- Revocation of previously-issued LMIAs.
Pursuant to s. 209.5 of the Regulations, an employer may be selected for inspection in the following circumstances:
(a) an officer or the Minister of Employment and Social Development has a reason to suspect that the employer is not complying or has not complied with any of the conditions set out in section 209.2 or 209.3;
(b) the employer has not complied with the conditions set out in section 209.2 or 209.3 in the past; or
(c) the employer is chosen as part of a random verification of compliance with the conditions set out in sections 209.2 and 209.3.
Inspections may be conducted during the six years beginning on the first day of the period of employment listed on the work permit issued to the foreign worker. The conditions to which employers must comply differ depending on the type of work permit issued to a foreign national. The conditions and justifications for failing to comply can be found at sections 209.2-209.4, and also at Table 1 of Schedule 2 of the Regulations (reproduced below in Appendix A). Section 209.2 determines the conditions to be complied with in the case of an employer who has made an offer of employment to a foreign national referred to in subparagraph 200(1)(c)(ii.1). Section 209.3 states the relevant conditions to be used where an employer has made an offer of employment to a foreign national referred to in subparagraph 200(1)(c)(iii). Section 209.4 lists conditions imposed on all employers.
Table 1 of Schedule 2 of the Regulations provides a guideline of the various conditions of employment that must be met from wages paid to retention of documentation. Also important is the classification provided for each condition ranging from “A” to “C”. The conditions include retaining and providing required documents, complying with provincial and federal laws, and reporting at any time and place to answer specific questions.
To verify compliance with the conditions set out in Table 1, or subsections 209.2 to 209.4, ESDC may enter and inspect any premises or place in which a foreign national works and, if conditions are imposed by s. 209.3, any premises or place which the employer has provided to the foreign national as accommodation. Pursuant to s. 209.8 and 209.9 of the Regulations,ESDC investigators have the authority to conduct site visits without a warrant (excluding private dwellings, which require consent or a warrant). On these site visits, they can request the employer and any person employed by the employer any relevant questions, examine any documents found in the premises or place, use copying equipment, take photographs and make recordings, examine anything in the premises or place, access the employer’s computer or other electronic device in order to examine any relevant information/documentation contained in it and be accompanied or assisted by any person required.
What are the Enhanced Enforcement Measures as of December 1st, 2015?
On 1 December 2015, stronger consequences for non-compliant employers who violate the conditions of the TFWP or the International Mobility Program (IMP) came into force. These changes comprise a new method of assessing non-compliance, the opportunity for voluntary disclosure, and a new formal opportunity for employers to respond to initial findings of non-compliance. With respect to employers who have been found non-compliant as a result of an inspection from a violation that occurred prior to 1 December 2015, the following consequences may apply:
- A ban of two years from using the TFWP;
- Publication of their name, address and period of ineligibility on a public website;
- A negative LMIA being issued for any pending applications; and/or
- Revocation of previously issued LMIAs.
Employers found non-compliant as a result of an inspection for violations that occur on or after 1 December 2015 are now subject to the following consequences:
- A ban of one, two, five or ten years, or permanent bans for the most serious violations;
- Publication of their name, address and details of the violation(s) and/or consequence(s) on a public website; and/or
- Revocation of previously-issued LMIAs.
Administrative Monetary Penalties
Pursuant to Division 6 of Part 11 of the Regulations, at sections 209.93 to 209.997 AMPs can range from $5,000 to $100,000 per violation, up to a maximum of $1 million over one year, per employer. Each violation is distinct and separate, such that the same violation relating to multiple foreign nationals counts as separate violations and different violations relating to the same foreign national count as separate violations. The amount of the penalty is determined based on a demerit point system. The point system considers the following:
- The type of violation;
- Size of employer’s business;
- Employer’s history of non-compliance;
- Severity of non-compliance; and
- Whether the employer voluntarily disclosed information about potential non-compliance before an inspection was initiated.
Each of the Employer Conditions in Table 1, above, have classification Types ranging from “A” to “C”. Points will accrue for each violation of these conditions, for each individual foreign national. Table 4 of Schedule 2 of the Regulations (reproduced in Appendix B below), sets out the number of demerit points depending on the type of violation. Table 5 of Schedule 2 of the Regulations (reproduced in Appendix C below), below lists the demerit points for Severity of Non-Compliance, depending on the stated criterion. Section 209.991 of the Regulationsprovides that the calculation of demerit points for the purpose of determining the amount of the AMP is determined by totalling the values ascribed for compliance history and severity, with the possibility of subtraction of four points where the employer has made an acceptable voluntary disclosure.
Publication of Employer’s Information
Section 209.91 of the Regulations was repealed in 2015. The provision was replaced by section 209.997, which came into force on 1 December 2015, and is substantially similar to the previous provision, whereby names of employers who commit a violation will be published on one or more Government of Canada websites. It is notable that the current provision requires that a Notice of Final Determination be issued prior to the employer’s information being published. Furthermore, the conditions or criteria with which the employer failed to comply, the eligibility status of the employer, the AMP amount and the eligibility period of the employer will also be published.
The provisions relating to voluntary disclosure are set out in section 209.991(2) and 209.991(3) of the Regulations. If an employer proffers an acceptable voluntary disclosure that they are non-compliant, and a subsequent inspection finds the employer non-compliant, the past disclosure may allow four points to be deducted per violation. For a voluntary disclosure to be acceptable, the disclosure must be complete and must be made prior to any compliance or enforcement action being undertaken. However, pursuant to s. 209.991(3), an officer of the Minister of ESDC may still find that the voluntary disclosure is not acceptable after considering:
(a) the severity of the impact of the violation on the foreign national;
(b) in the case of an employer described in subsection 209.2(1), the severity of the impact of the violation on the Canadian economy, or in the case of an employer described in subsection 209.3(1), the severity of the impact of the violation on the Canadian labour market;
(c) whether the disclosure was made in a timely manner;
(d) the number of times an acceptable voluntary disclosure is made by the employer; and
(e) the nature of the condition with which the employer failed to comply.
Table 2 of Schedule 2 of the Regulations, reproduced at Appendix D, provides the AMP amounts for which an employer may be charged. The amount depends on the type of business, number of points, and type of violation.
Pursuant to s. 209.99, non-compliant employer may face a period of ineligibility for hiring foreign nationals. For multiple violations, ineligibility is not cumulative, the longest period applies. The period of ineligibility is determined by the number of points and type of violation, as set out in Table 3 of Schedule 2 of the Regulations, reproduced below at Appendix E, and range from no period of ineligibility in cases of small number of points to a permanent ban in cases of high non-compliance demerit points. Note that employers who have received an AMP, but who are not subject to a period of ineligibility as set out in Table 3 of Schedule 2 of the Regulations, will remain eligible to employ foreign nationals under the TFWP. This is of course subject to the employer having paid the required AMP (or agreed upon payments).
Justifications for Non-Compliance
There are limited acceptable justifications for failure to comply, which are as follows:
- The employer made all reasonable efforts to comply with the condition;
- The errors were made in good faith;
- They result from a change in federal or provincial law;
- They result from a change to the provisions of a collective agreement;
- They result from the implementation of measures by the employer in response to a dramatic change in economic conditions that directly affected the business of the employer, provided that the measures were not directed disproportionately at foreign nationals employed by the employer;
- They result from an error in interpretation made in good faith by the employer with respect to its obligations to a foreign national, if the employer subsequently provided compensation — or if it was not possible to provide compensation, made sufficient efforts to do so — to all foreign nationals who suffered a disadvantage as a result of the error;
- They result from an unintentional accounting or administrative error made by the employer, if the employer subsequently provided compensation — or if it was not possible to provide compensation, made sufficient efforts to do so — to all foreign nationals who suffered a disadvantage as a result of the error; or Force majeure. 
Notice of Preliminary Finding
If an ESDC or CIC officer determines an employer has failed to comply with one of the required conditions imposed, the respective department will issue a Notice of Preliminary Finding. The content of the notice is set out in 209.993(3), and includes the name of the employer, the condition with which the employer failed to comply, the relevant facts and reasons for the preliminary finding, and if applicable, the AMP amount, period of ineligibility, or a warning. Note that a Notice of Preliminary Finding may be corrected or cancelled before a Final Determination is made. In response to a Notice of Preliminary Finding, an employer is provided the opportunity to make written submissions within 30 days after it is received, or request an extension. The justification is considered, and the consequences could remain the same, decrease or increase, or be lifted.
Notice of Final Determination
Pursuant to section 209.996, ESDC or CIC must issue a Notice of Final Determination if it is determined that an employer has committed a violation failing to meet the conditions imposed. This determination is final and binding, subject to judicial review.