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Are you an employer who wants to hire a temporary foreign worker? As you may know, you may need to apply for a Labour Market Impact Assessment before you may hire a foreign worker. If you need help determining the differences between the High-wage and Low-wage Streams, continue reading this blog. You will find useful information about which stream is best suited to your situation.
A Labour Market Impact Assessment (LMIA) is an assessment conducted by Service Canada. You may need to obtain a positive LMIA before you may hire a temporary foreign worker. A positive LMIA shows that there are currently no Canadian citizens or permanent residents who are willing or available to do the job due to a temporary labour or skill shortage. With a positive LMIA and other documents, a temporary foreign worker can successfully apply for a work permit to come and work in Canada for that employer.
The high-wage and low-wage streams are similar, but not identical. The program requirements, employer responsibilities, and required forms differ between the two programs.
Cap on proportion of low-wage positions
Transportation costs
Housing or accommodation
Health and Workplace Safety
An employer is subject to a cap on the proportion of low-wage positions at a specific work location. The cap that is applicable to you depends on whether you have hired temporary foreign workers in the past. If you are already at the capped limit for low-wage positions, your LMIA will likely be refused.
However, there are exceptions to the cap. For example, this cap will not apply to you if you are hiring a temporary foreign worker for an on-farm agricultural position. Another exception is if you have fewer than 10 employees nationally. This is not an exhaustive list of exceptions. Please contact Akrami & Associates so that we can assist you in determining your best course of action.
The employer is also responsible for transportation costs. This includes the temporary foreign worker’s transportation costs to and from their current country of residence. If the temporary foreign worker you wish to hire is currently in Canada, you are also responsible for his or her transportation costs to and from their current location in Canada to the new work location in Canada.
The employer must also ensure that there is suitable and affordable housing available to the temporary foreign worker near his or her work location. In certain situations, the employer may also be required to provide the temporary foreign worker with suitable housing.
Finally, the employer is required to pay for all health and workplace safety insurance.
Transition plans for high-wage positions
A Transition Plan outlines the employer’s plans to assist temporary foreign worker employees to become permanent residents. The employer must commit to the plan and perform the activities stated in their plan. The Transition Plan can also outline the employer’s plan to hire and train Canadians and permanent residents. The Transition Plan is submitted with the LMIA application.
Not all employers under this stream are required to submit a Transition Plan. If the employer believes the exemption applies to them, they must apply for the exemption in the LMIA application.
To be exempt from submitting a Transition Plan, the employer must show that:
The position they wish to hire a temporary foreign worker is limited in duration;
The position is not a position that will exist after the temporary foreign worker leaves; and
This is not a position that employers could transition to Canadians or permanent residents
Two things determine whether an employer should submit an LMIA application for a high-wage or low-wage stream:
Wage being offered to the temporary foreign worker
Location of position being offered to the temporary foreign worker (i.e. which province/territory)
Each province and territory has a median hourly wage as determined by Statistics Canada.
If you are an employer who is offering a wage that is above or at the median hourly wage, you should submit an application that meets the program requirements for the High-wage Stream.
If you are an employer who is offering a wage that is below the median hourly wage, you should submit an application that meets the program requirements for the Low-wage Stream.
The prevailing wage affects the minimum wage you, the employer, are required to offer a temporary foreign worker. The prevailing wage of occupations in each region across Canada can be found on Job Bank. The prevailing wage indirectly affects whether you will submit an LMIA application for a High-wage or Low-wage Stream.
As an employer, you must pay the temporary foreign worker a wage that is equal or more than the posted prevailing wage for the position being offered. The prevailing wage differs based on location. For example, the current prevailing wage for a Chef in the Calgary region is $17.00, while the prevailing wage for a Chef in the Toronto region is $15.75.
However, please note that there are other factors to be considered when you decide on an appropriate wage for the temporary foreign worker. If you are paying your current employees who are working in the same position a wage higher than the prevailing wage, then you must also pay the temporary foreign worker a wage that is within the other employees’ wage range. For instance, if you are paying your current Toronto Chefs $30 per hour, you cannot only offer your temporary foreign worker $16 per hour.
Prevailing wages are tied to specific occupations, while the median hourly wage is not. “Median hourly wage” for a province of territory is determined by Statistics Canada. This is the wage you refer to when you are deciding whether an LMIA application for a High-wage or an LMIA application for a Low-wage Stream is appropriate.
The prevailing wage indirectly affects which Stream you should apply under, because it affects the minimum wage you must offer the temporary foreign worker. If the prevailing wage is higher than the median hourly wage, then you should submit an LMIA application that meets the requirements of the High-wage Stream.
If you are still unsure about which program requirements you must meet as an employer, you can contact Akrami & Associates for assistance. We will provide step by step guidance on determining an appropriate wage, the applicable stream you should apply under, and the program requirements you must meet. We can also provide assistance with respect to your entire LMIA application.
With Akrami & Associates, there is always a way!
