Northern Exposure

New penalties in Canada’s temporary foreign worker regime

by Isabelle Dongier

Last year, Canada’s federal government introduced changes to the Temporary Foreign Worker Program (TFWP). The changes were intended to encourage employers to put more effort into hiring Canadian workers by making it more difficult and expensive for them to hire temporary foreign workers.

The changes have done just that. Adding to that enhanced regime, the government of Canada has now published regulations introducing a new Administrative Monetary Penalty (AMP) regime. The AMP regime will come into force on December 1 and apply to noncompliance occurring after that date.

Administrative Monetary Penalties

While the regulations specifically state that their purpose is to encourage compliance and not to punish, the range of possible violations is very wide and the consequences potentially very severe.

At present, employers found noncompliant after an inspection face a two-year ban from Canada’s TFWP. Under the new regime, employers’ failure to comply with conditions of either the TFWP, which governs Labour Market Impact Assessment (LMIA)-based work permits, or the International Mobility Program (IMP), which governs LMIA-exempt work permits, will be assessed according to a complex point system. The point system will be based on factors such as:

• Type of violation,
• Prior noncompliance history,
• Size of the business, and
• Severity of the violation.

Depending on the number of points awarded, an AMP could vary from zero to $100,000 per violation. In addition, the ban from the TFWP could be imposed for one, two, five, or 10 years—or permanently! A failure to comply that affects more than one worker will constitute a separate violation for each worker affected.

In the event of multiple violations, AMPs will be cumulative, up to a total of $1 million. What’s more, the employer’s name and address will be published on the government website for an undetermined period, with details about the violation, the AMP, and the duration of the ban.

Types of violations

Violations may cover any of the long list of obligations now imposed on employers in the course of an LMIA or an LMIA-exempt work permit application. These include:

• Providing accurate information in the TFWP application,
• Retaining documents during the six years following the beginning of the foreign worker’s employment,
• Providing required documents and information during an inspection,
• Providing the foreign worker with the same occupation and substantially the same wages and working conditions as outlined in the employment offer or the LMIA application,
• Complying with the federal and provincial employment laws applicable in the province, or
• Making reasonable efforts to provide a workplace free of abuse.

Employer defenses

During the consultation period on the proposed regime, employers and legal stakeholders expressed a number of concerns. Some of them were heard. In particular, the justifications of good faith and inadvertent errors committed by employers can now be argued to avoid a noncompliance determination.

Those who voluntarily disclose noncompliance may receive a reduced AMP and a shorter ban or even only a warning in the case of a first violation. Disclosing, however, will not suffice. The regulations grant wide discretionary power to an officer in assessing whether a voluntary disclosure is acceptable based on the circumstances.

Employers must ensure compliance

More than ever, with the implementation of this additional piece in the TFWP/IMP enforcement system, employers of temporary foreign workers in Canada must make sure that they are closely monitoring their participation in the program.

We suggest that you implement internal compliance controls and mechanisms to ensure you are in compliance. Such systems may help you avoid the serious consequences that could result under the new framework.