Major Changes to LMIAs: What you need to know before September 26, 2024
On August 6, 2024, the Canadian government announced significant updates to the Temporary Foreign Worker Program (TFWP) and its Labour Market Impact Assessment (LMIA) process. These changes will take effect on September 26, 2024. If you are an employer or an applicant involved in the hiring of temporary foreign workers, these updates could directly impact your LMIA applications, particularly for low-wage positions. Here's what you need to know:
Key Updates Starting September 26, 2024:
1. Refusal to Process LMIA Applications for Low-Wage Positions
LMIA applications for low-wage positions will no longer be processed under certain conditions. Specifically, applications will be refused if:
The workplace is located in a Canadian Census Metropolitan Area (CMA) with an unemployment rate of 6% or more, and
The offered wage is lower than the median hourly wage in the respective province or territory.
However, exemptions will apply to:
Primary Agriculture stream,
Seasonal positions of less than 270 days, and
Occupations in food manufacturing (NAICS 311), construction (NAICS 23), and healthcare (NAICS 622 and 623).
These sectors are deemed essential, and their LMIA applications will continue to be processed even in higher unemployment regions.
2. Cap on the Proportion of Low-Wage Positions
Employers will face stricter limits on the proportion of low-wage temporary foreign workers they can hire. The new rule reduces the cap from 20% to 10% of their total workforce at a specific worksite.
However, certain sectors will continue to have a higher cap:
Food manufacturing (NAICS 311), construction (NAICS 23), and healthcare (NAICS 622 and 623) can still hire up to 20% of their workforce in low-wage positions.
For employers in Québec, this new cap applies to positions eligible for "simplified processing."
3. Reduction of Maximum Employment Duration for Low-Wage Positions
The maximum duration of employment for low-wage temporary foreign workers is being reduced from two years to one year.
As with other measures, exceptions are in place for:
Positions in the Primary Agriculture stream, which are exempt from this change.
4. Dual-Intent LMIA Applications
The TFW Program will now harmonize its requirements for dual-intent LMIA applications (those supporting both temporary employment and permanent residency) with the updated rules for low-wage and high-wage positions.
For low-wage dual-intent applications, the same rules on refusal to process, caps on low-wage positions, and one-year maximum employment duration will apply.
What Does This Mean for Employers?
These changes represent a significant tightening of the rules governing low-wage positions within the TFWP. If your business relies on temporary foreign workers for low-wage roles, it’s critical to assess how these updates may affect your workforce planning.
Actions Employers Should Take:
Review your LMIA strategy: If you are applying for low-wage LMIAs, ensure the wages offered are above the provincial/territorial median and that your business complies with the new caps on low-wage hires.
Plan ahead for employment duration: Consider the reduced employment duration when planning your workforce needs and ensure you are prepared for more frequent LMIA applications.
Stay informed: Visit the TFW Program website after September 26, 2024, when these changes will be officially reflected, for further guidance and compliance.
Conclusion
These new LMIA measures reflect the government's efforts to align temporary foreign worker recruitment with local labour market conditions, particularly in regions experiencing higher unemployment. While certain sectors like agriculture, construction, and healthcare continue to benefit from exemptions, businesses across Canada will need to navigate these changes carefully to maintain compliance.
Want to learn more? Set up a consultation with one of the lawyers in our firm.
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About the author:
Mark Holthe
Canadian Immigration Lawyer
