‘Any employer working with temporary foreign workers should assume that they're going to get audited’: immigration lawyer says routine HR decisions can trigger serious consequences.
For employers that hire temporary foreign workers, the landscape has shifted quickly and sharply as the federal government tightens temporary foreign worker (TFW) rules and ratchets up compliance enforcement.
According to Kyle Hyndman, lawyer and partner at MKS Immigration Lawyers in Victoria, it’s a moment that employers need to be paying close attention to.
“It's definitely a time of big change, and the changes that the government has implemented in the last year or so are really targeted at reducing the number of temporary and new permanent residents,” Hyndman says.
“So, any employer that is working with temporary foreign workers has to understand that that's the context they're working in.”
He links the current approach to a reversal from the immediate post-pandemic years, when federal policy emphasized bringing in more newcomers. In his view, that backlash has produced “a very sudden pendulum shift, in terms of approach, in terms of numbers, in terms of attitude.”
According to analysis by McInnes Cooper in St. John’s, there has been a sharp uptick in Employment and Social Development Canada (ESDC) employer compliance inspections, with 1,400 completed in the 2024-25 fiscal year and a non-compliance rate of about 10 per cent.
Hyndman says the cumulative effect of these policy and enforcement changes is a significant one, pointing out that “it's not a business-friendly environment for employers of temporary foreign workers, and they need to approach this with a very compliance mindset.”
Immigration compliance as core HR function
In practical terms, Hyndman stresses that employers that regularly employ TFWs need to shift immigration law compliance into the spotlight of human resources practices.
“It can no longer be seen as kind of a sideshow that some HR generalist was tasked with – it has to be a core function of that department, because the obligations are onerous and the compliance regime is strict and punitive, and many employers may decide that it's not worth it.”
What this means is a fundamental question of necessity for employers, Hyndman adds – and it’s a question that should be answered before they sponsor or hire foreign workers.
“I think that's the first thing that employers have to do, is say, ‘Is this something we actually want to do? Do we really need to change our entire approach to using temporary workers?’”
Increased inspections and audits
McInnes Cooper’s analysis noted that in September 2025 alone, 23 employers were fined between $5,000 and $15,000 each for failing to produce documents requested by inspectors, even when no other violations were present.
Another high-profile example of heightened scrutiny – and financial stakes – saw a New Brunswick seafood plant, Bolero Shellfish Processing, fined $1 million and barred from using the TFW program for 10 years.
According to Hyndman, the likelihood of inspection has grown to the point where employers should plan for it as a matter of course.
“Certainly, the number of investigations is on the rise. The number of administrative monetary penalties and value of those penalties is on the rise,” he says.
“More employers are being inspected, either as a result of complaints or past non-compliance or just based on random selection. … I think any employer working with temporary foreign workers should assume that they're going to get audited at some point by IRCC or Service Canada.”
Record-keeping and documentation
Because of that assumption, Hyndman stresses that thorough record-keeping practices are necessary – including training HR teams on protocols, regulations and compensation.
He adds that although his advice is directed at employers using the Temporary Foreign Worker Program (TFWP), it does not stop there.
“It applies to a certain extent, to all employer-specific work permits,” he says.
“If you're working with any employees who are not Canadian and are on employer-specific work permits of any kind, then you've got to treat this this monitoring and compliance regime very, very seriously.”
Employers should not wait for notice of an inspection to get organized, he says, adding that having a really robust system and checklists for record keeping proactively in place will reduce the stress involved in audits: “Having that all at the ready all the time for every temporary foreign worker will save a lot of grief down the road.”
Double enforcement and HR mistakes
Hyndman notes that missing paperwork can lead to findings of non-compliance, along with other unintentional infractions. He gives the example of roles where provincial employment standards technically require time sheets, but employers do not routinely keep them.
“Often mistakes are really well-intentioned. They're not nefarious in any way,” he says.
“Employers might be doing something that they think is helping the employee, or maybe something that they're doing for all of their employees, but turns out to be non-compliance.”
He points to pay increases and promotions as frequent problem areas under LMIA-based work permits. Employers often focus on minimum payments, he explains, but fail to consider that pay increases are also subject to rules and scrutiny.
“For example, giving a salary increase that's beyond the allowable amount within the program,” Hyndman explains.
“Or a change in the role, a promotion to a related but more senior role with additional responsibilities, that maybe takes them into a different NOC code. That could be non-compliance.”
He says employers also need to understand that federal immigration rules effectively reinforce provincial employment standards and human rights obligations, introducing a “double enforcement” situation.
“HR people have to be knowledgeable and careful about the temporary foreign worker program requirements, but be doubly vigilant about the provincial requirements, because those have a sort of derivative impact on the immigration compliance.”
