Employers in the Canadian hospitality industry rely heavily upon the temporary foreign worker program to staff their workplaces. Approximately one half of temporary foreign workers obtain their right to work in Canada through a process that requires a positive “Labour Market Opinion” (“LMO”) prior to the employer is able to hire the temporary foreign worker.
Until recently, LMO applications have taken up to four months to process. Needless to say, that makes the process less than responsive to immediate need for hospitality workers. However, through Canada’s new accelerated LMO application process (“A-LMO”), eligible employers can obtain a positive LMO in only 10 days. While the ability to have a more agile hospitality workforce has generally been positively received, it does have its potential downsides of which employers must be aware.
In order for the program to run efficiently as it is designed to do, Human Resources and Skills Development Canada (“HRSDC”) (the entity which issues the required ‘positive LMO’) has less opportunity to vet and verify applications at the front end. Instead, HRSDC asks employers to “attest” to their own compliance at the outset. Up to 20% of A-LMO applications will later be selected for “post-compliance reviews”.
This means that there is now “back end monitoring”, where HRSDC will confirm, after the fact, that the employer has complied with the TFWP’s requirements.
The potential penalties are not ones to be taken lightly. According to HRSDC penalties for non-compliance discovered in a post-compliance review include the following:
ineligibility to use the A-LMO application process
possible revocation of other LMOs (for which work permits have not been issued)
sharing the compliance review information with other federal and provincial government bodies for further investigation
greater scrutiny of any pending or subsequent LMO applications
Because post-compliance review information may be shared with other government bodies, it is also important to consider the enforcement powers of Citizenship and Immigration Canada (“CIC”). The CIC is empowered to disqualify employers from participating in the foreign worker program for a period of two years if they fail to provide foreign workers with “wages, working conditions, or employment in an occupation that are substantially the same as those offered”. This means that a unilateral wage increase which causes the employment terms and conditions to vary from those originally offered could result in a finding of non-compliance and disqualification. During this two year period, new temporary foreign worker applications would not be approved and existing temporary foreign worker arrangements would not be renewed.
To put the added risk of back end monitoring into perspective, consider TFWP recruitment requirements. Under the A-LMO application process, the employer is required to attest to the fact that it has made adequate efforts, but failed, to identify a Canadian citizen or permanent resident who can (and will) do the job. This is a matter of following guidelines which are in some ways vague and subjective. For example, recruitment activities must be “consistent with the practice within the occupation”. In the standard LMO process, an HRSDC officer will review and approve the employer’s recruitment efforts before issuing a positive LMO. If the employer has not complied, the LMO application is declined but there are no further consequences. Under the A-LMO process, an employer will have to make its own assessment of whether the recruitment requirements have been satisfied. If a post-compliance review officer disagrees with the employer’s assessment, the penalties noted above may be imposed.
In short, while the new A-LMO process provides great opportunities for employers in the hospitality industry to accelerate the hiring process, employers must be more diligent than ever to ensure they do not suffer the potential consequences of back end monitoring.