Expert Tips before Applying for a Labour Market Impact Assessment

Applying for a Labour Market Impact Assessment (LMIA) in order to hire foreign workers can be an uncertain and stressful process. Read on to discover what you need to consider before starting the process.

A Labour Market Impact Assessment is a document that is issued as the result of a process whereby a Canadian employer demonstrates to the government that their business needs to hire a specific type of worker and no one in Canada is available to do the work. If the Canadian government is satisfied that the employer both needs the worker and cannot find anyone already in Canada, then an LMIA approval is issued so that a foreign worker can apply for a work permit in order to fill the vacant position.

The government department that is responsible for the LMIA process is Employment and Social Development Canada (ESDC) or Service Canada for short. In most cases, a foreign national seeking to work in Canada will require an approved LMIA before they can apply for a Canadian work permit.

Obtaining an LMIA is not an easy process. The Canadian government works to discourage Canadian employers from relying on temporary foreign workers because it wants to ensure that Canadian workers have the first chance at any available employment. The LMIA process is expected to be used as an avenue of last resort, only when it is impossible for the Canadian business to find the worker needed from within Canada.

Although there is a lot of information circulating that indicates LMIAs are impossible to obtain, and much of what you read makes it sound like way too much trouble; the truth is that, if there is a genuine labour shortage for your position and region, LMIAs are possible to obtain. Further, if you work with the right professional, your part of the process in hiring foreign workers will be streamlined and stress free.

You should seek to work with someone who is interested in understanding your company’s location, financial position, labour market conditions and the duties of the position you need the LMIA for before giving you an opinion on the likelihood of success. We also recommend asking any potential representative about the number of LMIA applications they have been involved in and their success rate in the past 12 months.

The main goal of the LMIA system is to protect the Canadian labour market for Canadian citizens and permanent residents, and not to help the Canadian employer fill their vacant positions. The Temporary Foreign Worker Program (TFWP) aims to give Canadian residents the first chance at all available jobs, and support employers only where there are no qualified or available local workers for the position. In these cases, the Canadian employer must meet numerous standards that reflect Canadian employment laws, as well as wage expectations such as the median hourly wage for a specific position.

If you are not certain whether there is a shortage of qualified workers for your position, try advertising for a week and see what kind of response you get before hiring a professional to manage your LMIA process. If someone suitable shows up, or you receive multiple qualified applications, there is no point in pursuing an LMIA at this time.

When considering an application for a Labour Market Impact Assessment, it’s important to realize that you will need to provide certain documentation to prove that you are a legitimate business, and following all business regulations. Depending on the type of LMIA required, you may have to provide a copy of a business license, proof of worker’s compensation insurance, CRA payroll remittance records, or recent financial statements.

There are significantly more LMIA requirements if you wish to hire for low wage positions rather than high wage positions. The government sees low wage workers as more vulnerable and is therefore concerned about the employer/employee contract and will require you to ensure, for example, affordable housing and private health insurance until provincial health coverage kicks in.

If you have been reluctant in the past to properly document your business, are somewhat behind in filing your taxes, or have any outstanding issues related to Provincial labour standards, it would be wise to (a) find out what exactly you will need in order to submit the intended application and (b) get it in place before proceeding.

LMIAs are one of the most challenging applications to handle, even for professionals.

The LMIA application process itself is just pretty brutal, as is using the mandatory LMIA online portal. There are dozens of tiny variances to consider for each application, and seemingly insignificant factors that are strictly enforced by Service Canada. With no written procedures and continually changing rules, employers seeking foreign workers really need a professional who regularly deals with this department to ensure your best chance of success.

At The Way Immigration, we are usually eager to provide professional guidance to do-it-yourselfers. Trust me on this one. Don’t do it yourself.

If the purpose of the LMIA is to enable the worker to obtain a temporary work permit, ensure that the proposed worker has been properly assessed and will actually meet the conditions required for the work permit to be issued. Things like level of education, language proficiency, current and previous work experience, country of origin, family relationships in Canada, and previous applications can all impact whether or not your intended hire will be actually be granted the permit you need. There is no way to guarantee that any foreign national would ever be issued a work permit, but there are certain aspects of an individual’s situation that make it much more likely they will be refused. When you are spending time and money to pursue an LMIA, it’s important to eliminate as much uncertainty as possible in advance.

If the ultimate purpose of the LMIA is to enable the worker to qualify for permanent residency later, ensure that the proposed worker has been properly assessed and will indeed qualify for one of the PR categories available to become a permanent resident before starting the LMIA process. They will have to meet numerous criteria, and you need a viable transition plan. Otherwise, there is no point in obtaining a Permanent LMIA for that person, hoping the transition plan will work, because it will not. You can only make them a temporary job offer.

You have to be strategic using this program. It may not solve your immediate labour needs, but you can use the LMIA application process to plan into the future, especially if you envision relying on foreign nationals for your long term business success.

For the purposes of a Labour Market Impact Assessment, the government decides what you need to pay your worker. Service Canada publishes the minimum acceptable wage rates for nearly every possible position, based on geographic location. The rate you will need to pay in order to secure LMIA approval will depend on both the listed minimum and the wage range you are currently paying for the same position. You will be expected to adhere to this wage rate for your temporary worker for the length of time that the foreign worker is employed by your company, unless the government changes the minimum acceptable wage rates or your Province changes the overall minimum wage.

During the course of an LMIA application, the employer will be asked to specify several factors related to the employment of the foreign national, including wage rate, job duties, location of work, hours of work and benefits that will be provided to the foreign worker. At some point after the LMIA has been approved, Service Canada’s Integrity branch will contact the employer and ask for records to be provided that demonstrate the employer compliance, i.e. that you actually followed through with the specifics detailed in the LMIA.

Pay close attention to the wages and working conditions you have agreed to on the LMIA and ensure that you follow all Provincial Labour Laws. Don’t get yourself into a situation where you have a side agreement with the foreign worker to reduce their wages or change their position after the approvals have been issued. You will need to prove your compliance at some point in time, and the penalties for breaking the rules can be stiff.

You will need to maintain employment records on your foreign worker for at least 6 years after government approval of the LMIA, because Service Canada will at some point ask to see them. The records themselves aren’t really out of the ordinary for a well-documented HR file; but be aware that if you are a sole-proprietor who pays your workers cash and keeps your bookkeeping records in a shoebox, you are going to have to step up your game a bit.

Foreign workers cannot pay you for obtaining an LMIA for them, and they cannot pay for the government processing fee associated with the application. This is illegal. It’s an unsettled area of law as to whether or not the worker is allowed to pay for any professional fees associated with the LMIA, but in practice, Service Canada frowns upon the idea and some Provinces actually penalize employers if it happens.

Provincial registration is mandatory in some provinces for employers who want to hire foreign workers. It’s important for you to be on top of these regulations, because many jurisdictions require provincial approval of the employer before any recruitment related to an LMIA takes place. Again, penalties for violation can be severe.

There are numerous other ways to hire skilled foreign workers besides the LMIA system – the International Mobility Program has numerous categories of work permits. Some of these might be a better fit for a particular Canadian employer to handle their labour and skill shortages. Are you eligible for any of the LMIA exemptions? The LMIA route is usually considered the last resort for Canadian employers – be sure to canvas all other potenial options with a professional first.

The Way Immigration has more than a decade of experience with representing successful LMIA applicants through the Temporary Foreign Worker Program, and one of the highest success rates in the industry. We would be happy to assist your company with the process of hiring temporary foreign nationals and will work to ensure that both the LMIA and the immigration aspects of the process are thoroughly considered in advance.