Compliance framework is proposed for Canada’s Temporary Foreign Worker Program

by Thora Sigurdson

In June 2014, the Canadian government introduced changes to the country’s Temporary Foreign Worker Program (TFWP). These changes were intended to make it more difficult and expensive for Canadian employers to hire temporary foreign workers (TFWs), thereby encouraging employers to search within Canadian borders to staff their workforce. While the changes to the TFWP have largely been deemed to be “successful,” the new proposed compliance framework is raising some concerns.

Background

Employment and Social Development Canada (ESDC), the government body responsible for overseeing the TFWP, has circulated a discussion paper for review. It contains a proposed framework for ESDC’s plans to enforce compliance with the revised TFWP and a summary of possible penalties for employer noncompliance.

The discussion paper sets out an aggressive program for penalizing noncompliant employers. Indeed, it goes so far as to say that even good faith and inadvertent errors committed by employers—even ones that are subsequently corrected—could still be subject to penalty:

Regulatory amendments to the existing justifications would be introduced so that consequences could be imposed on non-compliant employers regardless of whether they take corrective action. Specifically, non-compliance resulting from good faith errors and unintentional accounting or administrative errors would be subject to consequences such as an AMP [administrative monetary penalty] and/or a ban, and the employer’s name would be published. The employer’s response to the violation (e.g., repaying wages) would be taken into account in determining the AMP amount or the length of the ban so that there is still an incentive for the employer to take corrective action.

Penalty provisions of the proposed compliance framework

The discussion paper provides for AMPs and a possible ban on employers from accessing the TFWP where there have been violations relating to:

• The genuineness of the job offer;

• The employment of a live-in caregiver;

• Wages, occupation, and working conditions;

• Reasonable efforts to provide a workplace free from abuse;

• Labor market impact;

• Reporting and document retention; and

• Cooperation during inspections.

The discussion paper proposes a points-based system for assessing AMPs. Violations are categorized as Type A, B, or C offenses. Points are then assessed based on whether the violation is an employer’s first violation or a repeat violation (one to two points) and on the severity of the conduct (one to six points). The AMPs are then assessed based on the number of points “awarded” and the size of the employer.

The discussion paper sets out a grid for the allocation of points and the applicable sanctions:

* All Type C violations will have two points on Table 2.

It should be noted that where a violation affects more than one TFW, it will be treated as more than one violation. For example, if an employer’s payroll department makes a good faith, inadvertent error that causes eight TFWs to be paid something other than “substantially the same” wage as provided in a Labour Market Impact Assessment, that employer would be assessed eight points and be liable for a $100,000 penalty, even if the inadvertent error had been corrected.

The discussion paper notes that certain types of noncompliance may be “justified” under Canada’s Immigration and Refugee Protection Act and its accompanying regulations, in which case penalties would not be assessed. However, the scope of “justification” under this legislation is quite narrow, including only:

• A change in a federal or provincial law;

• A change to the provisions of a collective agreement; and

• Changes due to a “dramatic change in economic conditions” so long as TFWs are not disproportionately affected.

And while good faith and inadvertent errors may be “justified” for other reasons under the proposed compliance framework, this would not exempt an employer from AMPs or shield the employer from a ban on using the TFWP. Thus, in at least some cases, the proposed compliance framework appears to impose penalties that are out of proportion to the nature or impact of the employer’s noncompliance.

ESDC accepted comments on the discussion paper until mid-October 2014, and the government’s response is now expected in the near future. We will keep you updated with any further developments.

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  Thora Sigurdson
  Thora Sigurdson practices in the area of employment law (non-union) and business immigration. In the employment area, Thora advises employers on hiring employees, privacy matters, disability management, decisions to terminate employment, severance packages and all other employment-related matters. Her immigration practice focuses on assisting employers bringing executives, senior managers and specially skilled workers into Canada from around the world. Thora has prepared and obtained temporary work permits under NAFTA, GATS and the Immigration and Refugee Protection Act, and applications for Labour Market Opinions from Human Resources and Skills Development Canada. Thora has presented papers and led seminars on employment law, human rights issues, and Canada immigration.