Are you a Canadian company looking to hire a foreign worker to work for your company? Before you can hire the foreign worker, you may need to have a Labour Market Impact Assessment – which is a document that allows you to extend an offer of employment to a foreign worker. In this blog, we will provide some useful information about the Labour Market Impact Assessment process, when it is required and how to get one.
The government of Canada understands Canadian companies may sometimes experience temporary labour or skill shortages. In cases where a Canadian company cannot find qualified Canadian workers to fill these shortages, the company may need to hire a foreign worker. The Labour Market Impact Assessment Process is required to show that hiring the temporary foreign worker will not have a negative impact on the Canadian job market by ensuring that qualified Canadians are not bypassed for a foreign worker.
Some companies may not be required to undergo the Labour Market Impact Assessment before they can hire a foreign worker. For example, if the foreign worker has an open work permit, then the company will not need to hire the foreign worker through the Labour Market Impact Assessment process.
Companies who can hire temporary foreign workers through Canada government’s International Mobility Program are also exempt from the Labour Market Impact Assessment process. To qualify to hire under this program, the company will need to determine if their hiring needs qualify under one of the Labour Market exemption codes. The job offer must include the exemption code and the employer may be required to pay an employer compliance fee.
If you are not exempt from the process based on your hiring situation, you will need to apply for a Labour Market Impact Assessment and pay the required processing fee.
The employer will need to apply to the Employment and Social Development Canada/Services Canada. There are two streams for the Labour Market Impact Assessment process and the stream applied to will be based on the wage offered for the positions. The two streams are low-wage positions and high-wage positions. Each position has its own requirements, so it is important the employer meets the requirements when they apply.
In addition to the wage requirement, the employer will need to advertise the position for a specific period to allow Canadians and permanent residents to apply for the position. The employer must provide reasons for refusing any application and must show at the end of the advertising period that it was unable to find a qualified Canadian to fill the position.
The employer will also be required to pay the $1000.00CAD processing fee and complete the necessary government forms. If the application is approved, the employer will be issued a positive Labour Market Impact Assessment, which is the document the employer can use to offer employment to the foreign worker.
With the offer of employment, the foreign worker can apply for a closed work permit. A closed work permit is a document that allows the foreign worker to work legally in Canada but only for the company that hired him or her through the Labour Market Impact Assessment process. In order to apply for a work permit, the foreign worker will need to submit the offer of employment letter, along with a copy of the Labour Market Impact Assessment document and the Canadian employer’s Labour Market Impact Assessment number. The foreign worker will also need to complete the required government form and paid the processing fee.
The closed work permit is a temporary document and will only be authorized for a specified period. If the foreign worker wants to renew the work permit, the employer will need to resubmit a new application for a Labour Market Impact Assessment and be required to submit a new offer of employment to the worker.
As previously mentioned, there are two streams through which a Canadian employer can hire a foreign worker to fill a temporary labour or skill shortage in their company. The two streams are the low-wage earner stream for Labour Market Impact Assessment and a high-wage earner stream for Labour Market I Assessment.
The low-wage earner stream means that the employer is offering the temporary foreign worker a wage that is below the provincial and territorial median hourly wage. Whereas, the high-wage earner stream meant that the employer will be offering to pay the temporary foreign worker a wage that is at or above the provincial or territorial median hourly wage.
Each of the streams have its own requirements for employers to know what requirements to meet and submit the proper application under that stream. For example, those looking to hire under the low-wage earner stream will be subject to a cap on the proportion of temporary foreign workers they can higher at a specific location. The employer must therefore make sure that they have not already hired the allowable number of foreign workers for their company at the work location.
On the other hand, employers looking to hire through the high-wage earning stream may be required to submit a transition plan. This is a detailed plan that the employer will need to submit to show their plan to recruit, retain and train Canadian and permanent residents and to reduce reliance on the Temporary Foreign Worker program.