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Employer Audits and Compliance – Frequently Asked Questions

Employment and Social Development Canada (ESDC) operates the arm of the Temporary Foreign Worker Program that is responsible to issue Labour Market Impact Assessments, or LMIAs.

Immigration, Refugees and Citizenship Canada operates the arm of the Temporary Foreign Worker Program that is responsible for LMIA-exempt work permits, whereby employers must submit an electronic offer of employment via the online portal before hiring a foreign worker.

Both departments have a compliance unit that is responsible to follow up on employment arrangements to ensure that the employer provided honest information when seeking to hire a foreign worker, and followed the requirements of either department since the time that the worker started employment.

The inspections that are performed by either of these departments are called Employer Compliance Reviews, and may take place over the phone, through the mail or with an onsite inspection by investigators. Following are some of the most frequently asked questions our office fields with respect to Employer Compliance Audits.

I just received a phone call stating that my company has been selected to participate in an Employer Compliance Review. What does this mean?

An Employer Compliance Review is a process whereby the Integrity Unit of either ESDC or IRCC requests certain documentation from an employer in order to verify that the employer followed through on their commitments made during the process of hiring a foreign worker.

Generally speaking, the process starts with a telephone call and then a letter is sent. The letter will advise which specific temporary foreign workers the unit would like to see records related to, and will request certain initial documentation, which generally includes a copy of the work permit, some payslips and a description of the duties the temporary foreign worker is performing.

If you had counsel that represented you with submitting the LMIA or electronic offer of employment, then you should notify them about the audit and find out if they are willing, and have the necessary experience, to assist you with the audit response.

This would be a good point at which to engage experienced counsel if you don’t have or don’t feel comfortable proceeding with your current representative. It is important to receive competent legal advice at the start of the proceeding, so that you don’t inadvertently cause more issues for yourself. It is an investigation after all, not a courtesy call to see how your foreign workers are helping your business.

Did someone complain about our company?

There are different avenues for a company to be selected for an Employer Compliance Review or LMIA audit. The department seeks to eventually audit every company that has participated in the Temporary Foreign Worker Program, so it’s most likely that you were selected for an audit randomly and there is no specific reason other than system integrity. Audits are also initiated in response to complaints made against employers, and when a company has a prior history of issues with either ESDC or IRCC.

What will I need to do?

You will be requested to provide documentation and explanations to the investigator through the regular mail service. After you provide the initial set of documents, you will receive a letter from the unit in about 3-4 weeks time. The letter will either state that your records look fine and the audit is closed, or it will ask for further documentation to explore areas of concern. Again, we recommend that you get some competent advice before you respond to the initial request so that you can keep the audit process as efficient as possible in your situation. Officers have been known to make requests that are outside the scope of their regulatory authority, and competent counsel will recognize these instances and push back appropriately.

How long will the audit take?

The audit can take anywhere from about 3 weeks to more than a year, depending on the situation. When your payroll records match the LMIA approval or electronic job offer, and meet Provincial labour standards, and the worker’s duties match their work permit, you are very likely to receive a letter stating that your audit has concluded. Where there are issues with any of the aforementioned areas, you will be asked to provide an explanation of the discrepancies. A back and forth dialogue will ensue, via paper mail, until the Integrity Unit is either satisfied that you have acted in good faith, or they decide to level some sanction against your business for violations of the program. The more complicated the issue at hand, the longer this process will take. An understanding of the legal framework underlying the authority of the integrity Unit is essential when an employer is asked to provide explanations related to any deviations; because there can be significant legal penalties applied to violations.

Am I in trouble?

You can probably best ascertain that issue on your own, based on your understanding of the employment of foreign workers at your place of business. If you maintain proper records, follow Provincial Labour standards and have upheld the employment contract you signed with the foreign worker(s), it is quite unlikely that you will be in any sort of trouble.

However, if your company has been lax regarding compliance with labour standards, or outright changed the conditions of employment for your foreign workers after they started to work, you will have some explaining to do. Depending on the intentions of the employer and the magnitude of the deviations, you may find yourself in trouble. Sanctions can range from being required to pay back to the foreign nationals any wages or benefits that were required but not provided, to being blacklisted by the government and not being able to use the temporary foreign worker program for a period of time, to significant fines against the company, to criminal charges against the employer in serious cases of abuse.

Why is my pending LMIA application taking so long to process?

If you had submitted an LMIA application that was not processed before the Employer Compliance Review process started, the pending LMIA will not be processed until the audit is complete.

What is the timeframe for review with a compliance audit?

Employers can be asked to provide records for 6 years following the first day the temporary foreign worker started to work for the company. That means you need to keep any records related to an LMIA application or an electronic job offer for at least 6 years, including copies of advertising, copies of the application, any resumes received and any follow up activities that might have been required as part of a transition plan.

How can I be proactive in ensuring I have the needed information?

Most of the records that you will need to provide are kept as a normal part of doing business. Documents like payslips and employee time sheets are the crucial pieces of information for any audit. If you were responsible to pay for the worker’s airfare from their home country, you need to keep proof that you made those payments. However, you may wish to also collect additional documentation as a matter of best practice for your business, to ensure you can adequately demonstrate the employment relationship you have with your temporary foreign workers. To that end, it is wise to also keep the following for every foreign worker:

  • written requests for time off or vacation
  • doctors’ notes if part time hours or light duty is required
  • termination notices – both if the employer is terminating the worker, or the worker is quitting

The Way Immigration is very familiar with the requirements of the Temporary Foreign Worker Program and has assisted with concluding numerous employer compliance audits in a positive fashion. We would be pleased to assist your organization to respond to an Employer Compliance Audit.

 

FRAN WIPF, A REGULATED CANADIAN IMMIGRATION CONSULTANT

Fran Wipf is an expert in Canadian immigration matters. She was licensed as an immigration consultant in 2008, and since that time, she has assisted thousands of individuals, families and businesses to find Canadian immigration success. You can learn more about Fran, and the services she offers, at www.thewayimmigration.ca

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