Tightening grip on the use of foreign workers (Legal View)

Changes to TFWP place more onus on employers and give authorities more powers
By Howard Greenberg
|Canadian HR Reporter|Last Updated: 02/25/2014

Substantial regulatory changes to Canada’s Temporary Foreign Worker Program (TFWP), implemented on Dec. 31, 2013, have resulted in greater compliance obligations for Canadian employers. The changes also provide immigration officials with extensive authority to investigate and penalize employers that don’t comply.

Ministerial instructions were also released granting Citizenship and Immigration Canada (CIC) and Employment and Social Development Canada (ESDC or Service Canada) new powers to revoke, suspend and refuse to process work permit or Labour Market Opinion (LMO) applications based on public policy concerns.

Key regulatory changes

Some of the key regulatory changes are listed below.

Introduction of employer conditions: The regulations require employers of foreign workers to satisfy several key conditions, which remain binding on the employer for six years.

An employer can be required to provide proof that it:

•is actively engaged in the business for which the offer of employment was made

•is in compliance with federal and provincial/territorial laws that regulate employment and recruitment

•has provided each foreign worker with employment in the same occupation and with wages and working conditions that are substantially the same as those in the offer of employment

•has satisfied any commitment made in the LMO application regarding job creation and retention, training, development or transfer of skills and knowledge for the benefit of Canadians or permanent residents

•has made reasonable efforts to provide a workplace that is free of physical, sexual, psychological or financial abuse.

Inspections: CIC and Service Canada can now conduct inspections of employers of foreign workers for the purpose of verifying compliance for any of the following reasons:

•they have reason to suspect the employer is not in compliance with any conditions

•the employer has not complied in the past

•the employer is selected for random verification of compliance.

Employers must demonstrate compliance in regards to any foreign nationals who were issued work permits within the six years prior to the inspection, including any period of implied status.

During an inspection, the authorities can require the employer to:

•provide any relevant documents

•report at a specific time and place to answer questions and provide relevant documents

•attend any inspection.

It is expected that employers will be given 48 hours’ notice of an on-site inspection — unless such notice would compromise the inspection. The inspection is not limited to the employer’s site but extends to any location where the temporary foreign worker performs work, including client sites.

During an on-site inspection, an officer may:

•question the employer or any individual employed by the employer

•examine documents or anything found within the premises

•use copying equipment on the premises, require the employer to make copies of documents or remove the documents to make copies

•take photographs and make video or audio recordings

•require the employer to provide use of a computer to access relevant documentation

•request to be accompanied by any person to assist in the inspection.

It is estimated an inspection will require one-and-a-half hours of preparation time and a further three hours of management time to attend the inspection.

Although not specified in the regulations, Service Canada has suggested that officers will seek consent before interviewing temporary foreign workers or Canadian employees. In determining the elements to review while conducting an inspection, immigration authorities will consider risk, employer history and whether a specific complaint has been received.

Employer Compliance Reviews (ECR): Every application for an LMO or work permit filed by an employer can trigger an ECR.

Filing an LMO application authorizes Service Canada to perform a compliance review of all temporary foreign workers employed by the employer within the previous six years, and Service Canada will review the wages, occupations and working conditions of foreign workers employed under previous LMOs.

Employers applying for and receiving LMOs on or after Dec. 31, 2013, will be required to provide the “same” occupation to foreign workers (previously “substantially the same” occupation) and wages and working conditions that are substantially the same as — but not less favourable than — those set out in the offer of employment (and confirmed in the LMO letter and annexes).

CIC can perform a similar ECR and review compliance with the terms and conditions of any work permits issued to an employer during the six years immediately preceding the filing of an application for a work permit.

The employer must demonstrate compliance with all the terms and conditions set out in the foreign workers’ offers of employment.

Employers will be notified that they have been selected for a compliance review and told whether it is an ECR or an inspection. They will be informed in writing of the:

•steps they need to take

•conditions for which they need to demonstrate compliance

•types of documents they are required to produce

•dates by which they are required to produce them.

In terms of documents to demonstrate compliance, an employer may be asked to produce:

•the business licence or permit

•T2 Schedule 125 Income Statement Information and T2 Schedule 100 Balance Sheet Information

•commercial lease agreements, business permits, etcetera

•provincial/territorial employer and recruiter registration certificate/licence

•recruitment information

•anti-abuse policies/codes of conduct/compliance policies/whistle-blower protection policies/anti-harassment policies

•training policies and materials

•payroll records

•time sheets

•pension and benefits enrolment documents

•job descriptions

•copies of foreign workers’ work permits

•documentation in relation to job creation, job retention, training, development or transfer of skills and knowledge

•registration with provincial/territorial workplace safety/workers’ compensation clearance letter.

Employer opportunity to respond: Employers will be offered an opportunity during the compliance review to provide justifications for initial findings of non-compliance and to take corrective action. The regulatory justifications for non-compliance are, however, very limited.

Non-compliance: Employers that are found to be non-compliant or refuse to take corrective action to achieve compliance could be subject to:

•a two-year ban from the program and be listed as non-compliant on the CIC website

•refusals of any pending applications

•revocation of previously issued approvals.

Ministerial instructions

Under the recent ministerial instructions, Service Canada now has the authority to suspend, revoke or refuse to process an LMO based on public policy considerations. CIC has the authority to revoke a work permit.

Ministerial instructions are not regulations but have the same force and effect. They are special powers provided to the minister to implement key changes quickly and are not subject to public consultation.

Ministerial instructions in relation to LMOs

Suspension: An LMO suspension is the temporary removal of the force or effect of an LMO during its period of validity, and prior to the corresponding work permit being issued. A suspended LMO may not be used to obtain a work permit from CIC.

An LMO may be suspended when any of the following happens:

•New information becomes available after an LMO is provided which, if known at the time of the assessment, would have led to a different opinion.

•There are reasonable grounds to suspect false, misleading or inaccurate information was provided.

•There are reasonable grounds to suspect the employer is not complying with the conditions set out in the Immigration and Refugee Protection Regulations (S. 209.3 or 209.4) in respect of that LMO or work permit or any other work permit.

•The employer’s name has been added to the public list of ineligible employers as a result of non-compliance.

This change permits the re-evaluation of an LMO based on labour market information obtained after the LMO was issued which, if known at the time of the opinion, would have resulted in a negative decision.

This information could very well include labour market information, studies and representations from stakeholders having expertise in the sector or occupation in question. This change introduces an element of uncertainty for employers and temporary foreign workers.

Where an LMO is suspended but a subsequent decision is made not to revoke it, Service Canada will re-issue another LMO at no additional cost to the employer if the validity period on the original LMO has expired.

Revocation: Revocation is the permanent cancellation of the effect or force of an LMO. A revocation may occur before or after a corresponding work permit has been issued.

When a revocation occurs, the LMO may not be used to obtain a work permit from CIC. If the LMO is revoked after the work permit is issued, CIC may also revoke the work permit.

An LMO may be revoked when:

•new information becomes available after the LMO is issued that indicates the employment of the foreign worker is having, or will have, a significant negative effect on the labour market in Canada

•false, misleading or inaccurate information was provided in the request for an LMO

•the employer’s name has been added to the public list of ineligible employers as a result of non-compliance.

The power to revoke an LMO creates uncertainty for employers and for foreign workers, and it’s not clear to what extent a duty of fairness will apply to decisions to revoke.

Refusal to process: Service Canada is now authorized to refuse to process LMOs for a given sector, region or occupational group, if either of the following occurs:

•Information indicates the employment of a foreign national in a given sector, region or occupational group may or will have a significant negative impact on the labour market.

•The LMO request relates to an application for a work permit, the processing of which would be refused by CIC (under section 87.3 of the IRPA).

Information on any refusal to process sectors, regions or occupational groups will be provided on the TFWP website.

The implications of this change are considerable, as Service Canada can now refuse to process applications based on its own labour market analysis, notwithstanding the fact the employer has tested the market by way of thorough recruitment.

Employer opportunity to respond: In all cases of a suspension or revocation of an LMO, the employer will be notified and given an opportunity to respond or provide new, relevant information.

Ministerial instructions in relation to work permits

CIC now has the power to revoke a work permit in any of the following circumstances:

•Service Canada revokes the LMO on which the work permit was based.

•New information becomes available indicating the employment of the foreign worker is having, or will have, a significantly greater negative effect than benefit in relation to the development of a strong Canadian economy.

•False, misleading or inaccurate information was provided in the request for the work permit.

•The employer’s name has been added to the public list of ineligible employers as a result of non-compliance.

•The work permit was issued to the foreign national on the basis of her relationship to another foreign national whose work permit has been, or is being, revoked.

It is unclear at this time whether the revocation of a work permit will result in the worker being out of status in Canada.

Tips for employers

It is crucial employers be proactive in implementing best practices for ensuring and demonstrating compliance, such as:

1. Implementing an official corporate immigration policy, including comprehensive internal guidelines, expectations and processes, and confirming that the use of temporary foreign workers is short-term and only in cases of demonstrable skill shortages.

2. Implementing detailed training plans to document knowledge and skills transfers by temporary foreign workers to the Canadian work force.

3. Establishing an internal immigration compliance officer who is accountable for:

•maintaining recruitment procedures

•maintaining records and ensuring compliance in relation to changes to employment terms including wages (such as reassessment of prevailing wage on annual basis), promotions and variation of working conditions

•verifying supporting company documentation

•developing document retention practices

•developing third party/vendor management policies.

4. Establishing corporate protocols to respond to requests for inspections and compliance reviews.

5. Creating foreign worker verification files containing key information, document retention protocols and centralized storage and retrieval processes, in order to respond to compliance reviews and inspections in a timely manner.

6. Developing and circulating internal communication on anti-abuse worker guidelines and policies, and on whistleblower processes to encourage credible reports from employees relating to complaints of abuse and the prompt and fair resolution of any complaint.

The government of Canada is determined to ensure the temporary foreign worker program facilitates the temporary entry of workers to meet immediate skills shortages, and not the creation of a permanent workforce of temporary workers.

The changes implemented to meet this objective present challenges for Canadian businesses that employ global expertise directly or through third-party service providers.

It is crucial employers react quickly to implement compliance measures to protect their ability to continue to use the TFWP.

Howard Greenberg is a partner and global immigration leader at KPMG Law in Toronto. He can be reached at (416) 943-0288 ext. 224, hgreenberg@kpmglaw.ca or visit www.kpmglaw.ca for more information.

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