HR beware: Non-compliance could lead to fines, bans from Temporary Foreign Worker program, says lawyer
For those employers that hire employees through the Temporary Foreign Worker (TFW) Program, the government late last year legislated some “housekeeping” changes that will have to be considered.
In the past, employers hiring workers for set terms (between six and 18 months) established the wage rate for that term and that was generally it.
“But now, [the federal government] is saying that every year, the employer is required to go and review the website, and make sure that the wage rate they’re paying is still above the prevailing wage rate because the government updates that every fall,” says Shannon Houston, partner and immigration lawyer at Miller Thomson in Calgary.
“For employers who are only paying the prevailing wage rate, this means it’s really critical that they check it every year. For the most part, it’s housekeeping: keeping tabs of your foreign workers, making sure managers haven’t promoted a foreign worker without talking to HR and checking that their work permit actually allows them to be promoted — that kind of thing.”
Organizations were required to offer the incoming foreign worker the prevailing wage rate for the job code — that can be found on Employment and Social Development Canada’ Job Bank website — and that must align with Canada’s median wage rate for the specific job code category.
The TFW program is proving to be popular with the majority of Canadians, found a recent survey.
Regular check-ins with Job Bank wage rates key
While this sounds simple enough, there are pitfalls to be aware of, according to Houston.
“The problem is they don’t really announce when they’re making the change; it does tend to happen in November and so it’s just a matter of having HR departments check out those wage rates in November because they’re only giving employers until Jan. 1 to make sure that wage rates are updated for each year.”
“So if you’re paying a person $24 an hour, and that was the prevailing wage rate for 2023 but come November 2024, they’ve increased it to $24.50 and you haven’t increased that wage rate, there’s penalties, including fines, and being found non-compliant with the program,” she says.
As many companies make compensation decisions around the beginning of the year, those employers will have to account for the proper wages rates at the end of the previous year, says Houston.
For those who shrug off this new requirement, some punishments could be quite harsh.
“You could be banned from the [TFW] program, depending on how bad the non-compliance is so it’s really important for employers to keep up on that wage rate change now,” says Houston.
Recently, 116 employers were found to be non-compliant with the TFW program and this resulted in $1.5 million in penalties.
New rules also around LMIAs
In addition to this change, another area that could affect certain employers revolves around the Labour Market Impact Assessment (LMIA) timing.
Before the latest changes, LMIAs were valid for 18 months. Now they are set to be in force for only 12 months, says Houston.
“The 18 months validity period came in during COVID and it was because it was taking longer for employers to get people here with all the border restrictions and so they extended it. It used to only be six months before COVID. They haven’t quite gone down to where it was before but they’re acknowledging that things aren’t taking quite as much time anymore. Twelve months seems to be more of a happy medium, in my opinion.”
“I don’t think that the 18 months was ever supposed to be a long-term plan. It was just because of the state of the world at the time,” she says.
For HR professionals, this new regime shouldn’t cause much consternation, however, it’s rules need to be paid attention to.
“My biggest recommendation is to keep track of your foreign workers. What type of foreign workers they are, what type of work permit they have; keep track of those expiry dates, and then making sure internally that everybody knows you can’t just move foreign workers around the same way that you can Canadian workers, they need to be checked and make sure that they remain compliant, because in the Temporary Foreign Worker Program, it’s the employer that is at risk of fines, and not any non-compliance issues: they can be temporarily banned from using the program, if they’re found,” says Houston.
