Harper Government brings in stiff new penalties for those who abuse foreign worker programs

OTTAWA, July 6, 2015 /CNW/ - The Honourable Pierre Poilievre, Minister of Employment and Social Development, today announced stiff new consequences for employers who break the rules of the Temporary Foreign Worker Program (TFWP) and the International Mobility Program (IMP). The Government initially announced that penalties would be enhanced for employers that break the rules of the programs in June 2014.  

Employers who are found non-compliant with program conditions could be subject to financial penalties ranging from $500 to $100,000 per violation, and up to $1 million in a one-year period. In addition, the existing two-year ban from the programs will be replaced with bans of various lengths – including one, two, five and ten years. Employers could face a permanent ban for the most serious violations.

The new consequences will encourage compliance and help prevent employers from misusing the programs or mistreating workers by ensuring that employers who violate program conditions face appropriate consequences. When compliance is not achieved, these new consequences will match the abuse. The new consequences, announced in June, are part of program changes made in June 2014 and will come into force on December 1, 2015.

Quick Facts

• Since 2013, Employment and Social Development Canada (ESDC) has conducted thousands of inspections to verify employer compliance with TFWP requirements.
• Since the launch of the Confidential Tip Line in April 2014 and the Online Fraud Reporting tool in June 2014, ESDC has received thousands of complaints of alleged violations of conditions of the TFWP.
• Since 2010, ESDC has revoked more than 400 Labour Market Impact Assessments (LMIAs), in cases where employers had broken the rules of the TFWP. If the new consequences had been in force at that time, these employers would have likely been subject to a financial penalty and/or a ban from the programs.

Quotes

"The Harper Government will not tolerate any abuse of the Temporary Foreign Worker Program or the International Mobility Program. We are committed to protecting the Canadian labour market and economy as well as foreign workers. Employers who break the rules will face the full force of the law, including financial penalties up to $1 million and permanent bans from the programs."
– The Honourable Pierre Poilievre, Minister of Employment and Social Development

"Our Government is committed to ensuring that Canadians are always considered first for available jobs. Both the Temporary Foreign Worker Program and International Mobility Program are important avenues for international workers to come to Canada and gain experience in our labour market on a temporary basis. However, our Government is dedicated to providing all Canadians with the tools and opportunities they need to become part of the competitive global workforce. We will not allow for abuses of our generous foreign worker programs, and we will ensure that those employers who do not respect the rules face the consequences."
– The Honourable Chris Alexander, Minister of Citizenship and Immigration

Associated Links

Canada Gazette, Part II

Overhauling the Temporary Foreign Worker Program

Find out if you are exempt from a Labour Market Impact Assessment

Stronger Enforcement and Tougher Penalties

Online Fraud Reporting Tool

Employers who have broken the rules of the Temporary Foreign Worker Program

Backgrounder

Over the past two years, the Government of Canada overhauled the Temporary Foreign Worker Program (TFWP) to ensure that Canadians continue to be considered first for available jobs. To offer greater clarity and transparency, the TFWP was re-organized into two distinct programs: the TFWP and the International Mobility Program (IMP). This was done to reduce confusion and better reflect the major differences between the processes for foreign workers required to have a work permit issued following a Labour Market Impact Assessment (LMIA) to obtain a work permit and for those who are LMIA-exempt.

These changes help ensure the TFWP is only used as intended—as a last and limited resort to fill genuine labour shortages on a temporary basis when qualified Canadians and permanent residents are not available.

As announced on June 20, 2014, the Government of Canada also committed to enhancing penalties for employers who break the rules of the TFWP and the IMP.

In fall 2014, Employment and Social Development Canada (ESDC) and Citizenship and Immigration Canada (CIC) consulted widely on the proposed changes through the publication of a discussion paper (Regulatory proposals to enhance the Temporary Foreign Worker Program and International Mobility Program compliance framework) online and in-person meetings with stakeholders, providing an overview of the proposed system of financial penalties and bans and seeking comments from individuals and organizations. The changes being implemented take into account the feedback received by stakeholders through this consultation process.

Temporary Foreign Worker Program

The TFWP, led by ESDC, includes the streams under which foreign workers enter Canada at the request of employers following the Labour Market Impact Assessment (LMIA) process, including agriculture workers under the Seasonal Agricultural Worker Program and the Agricultural Stream, and the High-Wage and Low-Wage Streams (including the Caregiver Program).

International Mobility Program

The IMP, led by CIC, includes the streams under which the employment of foreign nationals is not subject to an LMIA, and whose primary objective is to advance Canada's broader economic and cultural national interest, rather than filling particular jobs.

Conditions

Employers must always uphold the conditions set out in the regulations, their positive LMIA and its annexes and/or in the form submitted to support a foreign national's application for an LMIA-exempt work permit. This includes, but is not limited to:

• providing accurate information in the context of the LMIA application;
• providing accurate information in the context of a job offer for a work permit application;
• retaining documents and records that relate to compliance for a period of at least six years;
• paying wages that are substantially the same as – but not less favourable than – those set out in the offer of employment;
• providing the same occupation as set out in the offer of employment;
• providing working conditions that are substantially the same as – but not less favourable than – those set out in the offer of employment;
• making reasonable efforts to provide a workplace free of abuse;
• remaining compliant with any federal/provincial/territorial employment or recruitment laws; and
• remaining compliant with any other conditions imposed by the regulations, such as hiring or training Canadians or permanent residents, if that was a factor that led to the issuance of the work permit.

New financial penalties and bans of various lengths

Currently, the consequences for employers found non-compliant with conditions of the TFWP and the IMP following an inspection are a two-year ban from using the programs and the publication of their name on a public list of employers who have broken the rules of the programs. Non-compliant employers may also have their LMIA revoked.

As of December 1, 2015, employers who are found to be non-compliant with the conditions of the TFWP or the IMP could be subject to financial penalties ranging from $500 to $100,000 per violation, depending on the severity and type of the violation, the compliance history of the employer, and the size of the business. The maximum total penalty amount that can be imposed on an employer is $1 million over one year.

Employers who are found to be non-compliant with the conditions of the TFWP or the IMP could also be subject to a ban from using the programs. The previous mandatory two-year ban has been replaced with bans of various lengths - including one, two, five and ten years, as well as a permanent ban for the most serious violations. Bans will not be cumulative, and in cases where there are bans for multiple violations, the longest ban will apply. Employers who are banned from using the programs will be ineligible to employ foreign nationals for whom a work permit is required for the duration of their ban. Their LMIA applications and the related work permit applications will not be accepted.

In addition, employers who receive a financial penalty or ban will have their name published, alongside other information such as the financial penalty amount and the ban length imposed.

Employers will be encouraged to self-monitor their compliance with program conditions, and to correct and voluntarily disclose non-compliance as soon as it is discovered. Where applicable, employers could have their consequences reduced as a result of the voluntary disclosure. Employers will also be given the opportunity to respond to preliminary findings of non-compliance, as well as the potential consequences, before a final determination is made.

Temporary Foreign Worker Program and International Mobility Program:
Stronger Penalties

Illustrative Scenarios

Violations are determined on a case-by-case basis, and the consequences imposed will be proportionate to the violation. These scenarios are for illustrative purposes only and consequences will depend on the number of points assessed.

Scenario 1:  Underpaid wages

Employer A is employing five foreign workers to work as pipefitters at $25 per hour after finding that no Canadians or permanent residents were available. Employer A then underpays the workers by $5 per hour. An inspection finds that the employer failed to provide the wages stated on the job offer.

Potential Outcome:

• Five violations (as five foreign workers are negatively affected) – wage condition
• Mid-range financial penalty ($3,000 to $35,000)
• Potential ban, depending on the impact of the violation on the temporary foreign workers and the Canadian labour market
• Employer's name and details of the violation and consequence published on the public list

Scenario 2:  Underpaid wages, but with voluntary disclosure

Employer B is employing five foreign workers to work as pipefitters at $25 per hour after finding that no Canadians or permanent residents were available. Employer B then underpays the workers by $5 per hour.

The employer conducts regular reviews of their obligations to foreign workers and discovers the underpayment. Employer B then pays the wages owed to the workers and voluntarily discloses the facts to Employment and Social Development Canada (ESDC) and/or Citizenship and Immigration Canada (CIC). An inspection is launched.

Potential Outcome:

• If the employer has an acceptable justification (e.g., good faith error):
  • employer will not be found to have committed a violation
• If the employer does not have an acceptable justification:
  • employer will be found to have committed five violations – wage condition
  • if the voluntary disclosure is deemed acceptable, employer will receive a reduced consequence (could be only a warning letter) because they corrected and voluntarily disclosed the non-compliance
  • if only a warning letter is issued, employer's name will not be published on the public list.

Scenario 3:  Provision of false or misleading information

Employer C is employing two foreign workers to work as managers after finding that no Canadians or permanent residents were available. A tip is received alleging that Employer C did not make any efforts to recruit Canadians or permanent residents. 

An inspection finds that Employer C provided false and misleading information on their Labour Market Impact Assessment (LMIA) application. Had ESDC been aware of this information, it is likely that Employer C would not have been allowed to hire foreign workers.

Potential Outcome:

• One violation – LMIA accuracy condition
• Mid-range financial penalty ($3,000 to $35,000)
• Likely no ban from the TFWP/IMP
• Employer's name and details of the violation and consequence published on the public list

Note: For LMIA-exempt foreign nationals, a similar scenario could take place with respect to the provision of false or misleading information on a work permit application.

In this scenario, the foreign workers were not directly affected by the violation. If they had been negatively impacted, the potential outcome could be a finding of two violations rather than one.

Scenario 4: Not substantially the same wages and occupation 

Employer D is employing one foreign worker who is LMIA-exempt as an intra-company transferee with specialized knowledge. The foreign worker is an IT expert working in a management position in Canada. The employer is randomly selected for an inspection.

The inspection reveals that the foreign worker is not performing any management tasks, but has been doing coding work with a lower salary than set out in the initial job offer (difference of $1,000 since the worker arrived three months ago). The inspection therefore finds that the employer failed to provide the wages and occupation as stated on the job offer. Employer D did nothing to correct the situation or to prevent the situation from happening again. 

Potential outcome:

• Two violations – wage and occupation conditions
• High-range penalty (around $50,000 for each violation)
• Potential 5-year ban from the programs
• Employer's name and details of the violation and consequence published on the public list

Scenario 5:  Egregious Violation

Employer E has physically abused an agricultural foreign worker causing very serious injuries. An inspection finds that Employer E failed to make reasonable efforts to provide a workplace free from physical abuse.

Potential Outcome:

• One violation – reasonable efforts to provide a workplace free from abuse condition
• $100,000 financial penalty
• Permanent ban from the TFWP/IMP
• Employer's name and details of the violation and consequence published on the public list
• Relevant enforcement bodies (e.g. Canada Border Services Agency, Royal Canadian Mounted Police) are notified

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SOURCE Employment and Social Development Canada