All employers of temporary foreign workers in Canada need to understand how the employer compliance regime works. Both Immigration, Refugees and Citizenship Canada (“IRCC”) as well as the Department of Employment and Social Development (“ESDC”) regularly audit and inspect the employers of foreign workers to make sure that they are complying with the Temporary Foreign Worker Program and/or the International Mobility Program (which are the two main programs through which foreign nationals can work in Canada). Both ESDC and IRCC have indicated that about 25% of employers can expect an inspection in any given year.
Most of these inspections and audits start with the employer receiving a letter from the Government of Canada informing them that they will be examined on a multitude of factors, including whether they have employed the foreign national in the job that they were supposed to, whether they paid the wages that they were supposed to, whether the employer complied with laws regulating employment, whether they maintained records and whether they took reasonable efforts to provide a workplace that was free of abuse.
I have embedded below the standard employer compliance letter that is sent out at the start of an audit.
employercomplianceaudit
Consequences of Non-Compliance
There are several consequences to Canadian employers of non-compliance with the Temporary Foreign Worker Program and/or the International Mobility Program, including possible fines and prohibitions on hiring foreign workers. The fines can range from a few hundred dollars to up to a maximum of $1,000,000.00 in a calendar year. The bans can range from a few months to a permanent ban.
The Government of Canada maintains what is commonly called an Employer Blacklist on its website. The Employer Blacklist provides a good example of the types of fines and prohibitions that employers who have been found to be non-compliant can expect.
Sources of Information
While some employers of foreign workers deliberately breach program conditions, most do not, and are simply unaware of program requirements. As such, it is important that the employers of foreign workers either seek legal representation to confirm compliance, or familiarize themselves with the information in the following three links:
IRCC website on what constitutes compliance
IRCC website on assessing consequences of non compliance
IRCC website on assessing severity of a breach
Steps
An Inspection or audit typically begins with an employer receiving a standard form from the government advising them that an Inspection is about to occur. It typically looks like the following:
Audit1
Best Practices
As the Inpsection proceeds IRCC or ESDC will enter the results into a document that resembles this.
If non-compliance is found, the Employer may be asked to provide justification for the non-compliance. Acceptable justification will result in an employer not being fined or banned from using the program.
AuditJustify
There are several steps that employers can take to minimize the risk of being found non-compliant.
These include:
1 Ensure that responsibility for foreign workers is centralized.
It is important that companies do not have individuals making commitments to foreign workers that the people in the company who are responsible for the hiring and employment of foreign workers are unaware of. While the Government of Canada has taken steps to minimize the risk of this, such as through the creation of the Employer Compliance Portal, it is surprising how frequently individual managers within a company are able to commit the company to enforceable terms and conditions with the government. As such, it is imperative that Human Resources make it clear that any offers of employment, immigration nominations and changes to terms of employment of foreign workers go through them.
2. Do not change any terms of someone’s employment without first consulting a lawyer or checking the IRCC / ESDC website to determine if the change would constitute a breach.
Employers are often surprised at what constitutes a breach of the Temporary Foreign Worker Program and the International Mobility Program. For example, the IRCC website states the following about when a promotion will result in non-compliance.
As well, raises, failure of a temporary foreign worker to obtain permanent residency, changes in the location of employment and the failure of an employer to retain copies of advertisements can all lead to findings of non-compliance.
3. Have someone do an occasional spot audit of paystubs to make sure that an employee is being paid in accordance with the information that was provided to the Government of Canada when that person was hired.
This is a service that we have recently started offering, and it has worked wonders in helping employers spot breaches that they may not have been aware of. It is particularly beneficial for small employers, who may not be familiar with how overtime is calculated, how averaging agreements work, provincial rules for domestics, vacations, the requirement to keep timesheets and other technical requirements that can be difficult. The service is actually rather simple, and involves a “mock audit” using the same questionnaire as what the government uses, and which is embedded above. Indeed, I would imagine that most of the employers who were found non-compliant with the Temporary Foreign Worker Program or the International Mobility Program could have avoided such a finding if they had done a mock audit.
4. Make sure that all aspects of a foreign worker’s employment is documented at the time that it occurs. This includes paystubs, hours of work, variations to employment, etc.
One of the biggest mistakes employers make is not properly keeping records. Employers must cooperate and provide documents as requested in order to demonstrate compliance. In Farms v. Canada (Employment and Social Development Canada), for example, an ESDC Inspector penalized a farm as follows:
Based on information provided by the employer, the inspector determined that 20 Temporary Foreign Workers had deductions of $200-$250 during the first 6 weeks of employment. The employer stated they provided payment advances however the employer could not demonstrate that the payment advances had been made. Further, there is a requirement in the Seasonal Agricultural Worker Program employment contract to have a written agreement with the foreign workers for any extra deductions being taken from pay cheques. The employer could not provide any evidence of written agreements with the foreign workers, confirming the foreign worker’s consent to the deductions. The inspector could not confirm the existence of payment advances or the consent for the extra deductions directly with the Temporary Foreign Worker(s) as they are no longer in Canada.
5. Check whether the company has harassment policies, and if not, develop them.
Many employers are unaware that in British Columbia it is mandatory for employers to have written harassment and bullying policies. The failure to have such a policy can lead to a finding that the employer did not take steps to provide a workplace that is free from abuse.
In writing this post, my goal is not to deter companies from hiring foreign workers. In today’s labour market, it is growing increasingly essential to do so. However, it is imperative that companies fully understand the rules before they do so, and implement best practices as early as possible.
6. Check work permit conditions.
Most work permits have conditions on them. It is important to review them carefully. The following PDF contains internal IRCC Q&A which shows various scenarios of how employment location can be restricted.
Employer Compliance Location
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Jurisprudence
In Millenium Pacific Greenhouses Partneship v. Canada (Employment and Social Development), 2022 FC 960, Justice Norris ruled that it was unreasonable for an Inspector to determine that ” simply because of an employment relationship, the employees would defend the employer’s version of events, whether it was true or not” and that “information presented by the company in its own defence cannot be found less credible simply on the basis of the bald assertion that it is “in [the company’s] best interest” – in other words, that it is self-serving.” The Court further stated:
this Court has found it necessary to intervene when decision makers have diminished the value of evidence for this reason alone and without meaningful consideration of other factors potentially affecting the weight of the evidence (e.g. being consistent with other credible evidence, being corroborated in material respects, and so on). See Tabatadze v Canada (Citizenship and Immigration), 2016 FC 24 at paras 4-7, and the cases cited therein; see also Aisowieren v Canada (Immigration, Refugees and Citizenship), 2020 FC 305 at paras 15-16 and the cases cited therein.
In Luigi’s Concrete Ltd. v. Canada (Employment and Social Development), 2024 FC 1446, Madam Justice Pallota affirmed that companies cannot reduce a foreign worker’s salary on the basis that they receive economic benefits elsewhere, like free accommodations. The Court also reiterated that justification requires that an employee be justified.
Rep Q&A
