An introduction to Labour Market Impact Assessments (LMIA)

An Introduction to Labour Market Impact Assessments

The Labour Market Impact Assessment or LMIA is currently one of the most crucial aspects of Canadian Immigration Law. As we will discuss, it is particularly important for those seeking to employ foreign workers and for certain individuals who are looking to independently apply for permanent resident status.

An LMIA is the Government of Canada’s way of determining whether or not there is a need for a foreign worker and what effect the hiring of a foreign worker would have on the Canadian job market. For a positive LMIA to be issued, Service Canada (the government department responsible for the LMIA program), must be satisfied that the hiring of a foreign worker would have a neutral or positive effect on the Canadian job market.  The issuance of a positive LMIA by Service Canada confirms that an employer has a need for a foreign worker and that there wasn’t a Canadian worker with the necessary experience or qualifications who was willing or able to take the job.

LMIA’s currently serve two important purposes. Firstly, an employer must typically obtain a positive LMIA before their temporary foreign workers will be eligible for a work-permit (subject to certain LMIA-exempt work permit categories) – this is the traditional purpose for an LMIA that has existed since their introduction.

The second purpose of an LMIA, which has recently become more prominent with the launch of the Express Entry system, is to allow an employer to provide a permanent job offer to eligible skilled foreign nationals in order to support their applications for permanent residence.

Launched at the beginning of 2015, the Express Entry system is an application control mechanism which governs who will be permitted to apply for permanent residence under several of Canada’s economic immigration streams. Under the Express Entry system, each individual is ranked according to an automatically assessed a point score according to a published points criteria (points are awarded based on several factors such as age, work experience, education and language ability) and only the highest ranked individuals are periodically invited to apply for permanent residence.

LMIAs are extremely important under the current Express Entry system. Under the current incarnation of the Express Entry points criteria, having an LMIA based job offer results in an individual being awarded so many additional points that they can essentially guarantee that they will receive an Invitation to Apply – even if they otherwise score very poorly on the other criteria.

The policymakers at Immigration, Refugees and Citizenship have signaled that they are considering reducing the weight that the Express Entry system places on LMIA backed job offers so that they no longer guarantee an Invitation to Apply (though still significantly increasing the chance of being invited). I agree that some change to the current system may be necessary. The current Express Entry system tends to overemphasize the possession of an LMIA sometimes allowing less qualified individuals to rank higher than more qualified individuals with much more experience and education. The Government is currently engaging in consultations to determine what changes should be made to the Express Entry system.

The stakes for obtaining a positive LMIA can often be extremely high. An employer’s ability to obtain a positive LMIA is often the difference between a foreign national being able to continue working in Canada or needing to go home, it can also be the difference between a foreign national being invited to apply for permanent residence or not having any pathway towards becoming a Canadian permanent resident.

Obtaining a positive LMIA is a complex and very technical process which can be daunting for many employers. For example, prior to making an LMIA application employers are generally required to first advertise the position in a very specific manner for a period of 28 days.  These very specific recruitment requirements exist so that Service Canada can be satisfied that the position was adequately made available to potential Canadian workers. Failure to precisely comply with the minimum recruitment requirements is a common issue resulting in the refusal of LMIA applications by Service Canada.

Employers must also note that the application requirements can also differ quite significantly depending on whether the position is considered a “high-wage” or a “low-wage” position, a distinction which depends on whether the position’s offered wage is above or below the median provincial wage (Service Canada currently uses $25.38/hr as Alberta’s median provincial wage). Applications for high-wage positions require the filing of a “Transition Plan” which outlines the steps that the employer is committing to take to reduce their reliance on temporary foreign workers. Applications for low-wage positions, on the other hand, may be subject to a cap which restricts the proportion of an employer’s workforce which can be made up of low-wage temporary foreign workers.

Furthermore, employers must be aware of the importance of complying with the working conditions and terms of employment set out in the LMIA approval. Inspections and compliance reviews can be used by Service Canada to monitor employer compliance and it is therefore imperative that employers carefully maintain the records necessary to prove their compliance. Depending on the severity of the breach and the employer’s compliance history, a failure to follow the terms of the LMIA can result in a whole host of penalties, including significant monetary penalties or a ban from being able to obtain future LMIAs. Common compliance problems include non-payment of overtime, insufficient wages or hours, or the employment of a temporary foreign worker in an unauthorized location or in an unauthorized occupation.

If attempting to apply for an LMIA, it is important to try to be aware of the many requirements and complexities of the application process and the subsequent compliance regime. The assistance of an experienced immigration lawyer can be valuable in helping to navigate this complicated yet often crucial process.

McCuaig Desrochers LLP, a general practice law firm with Edmonton’s largest group of immigration lawyers (www.mccuaig.com).  This article first appeared in the August 2016 edition of the Millwoods Mosaic – the Multicultural Voice of Southeast Edmonton and is intended to provide general information only and should not to be relied on as legal advice or opinion.  We invite you to contact one of the members of our experienced immigration group for assistance.

Immigration & Citizenship Lawyers

Breanna L. Case
Student-At-Law

Megan L. Dawson
Partner

Eric J. Mahood
Associate

Nathan A. Po
Partner

Olivia Wang
Associate

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