Employer Compliance Reviews: Take Them Seriously or Suffer the Consequences

Authors: Carolyn Frost, Reis Pagtakhan

Many employers in Canada hire temporary foreign workers when they are unable to recruit Canadian citizens or permanent residents for job openings. In recent years, the government of Canada has engaged in stronger enforcement and has handed out tougher penalties for employers found non-compliant with their legal obligations to temporary foreign workers.

Through the use of what are called Employer Compliance Reviews, the government of Canada audits approximately one in four employers that hire temporary foreign workers for compliance with immigration laws every year.

Considering the potential impact of strict penalties for non-compliance, businesses that hire temporary foreign workers should be ready for an employer compliance review and should respond with the seriousness that these inspections deserve.

The government of Canada’s most recently reported statistics indicate that 19 million temporary foreign workers entered Canada to fill vacancies within Canada’s national labour force. Within the trucking industry, the Conference Board of Canada has recently reported that, by 2020, there will be a supply gap of 25,000 drivers. Many trucking companies fill these gaps by hiring temporary foreign workers.

Given the industry reliance on temporary foreign workers to fill driver shortages, for most readers this means that it is a matter of when, rather than if, your operation will be audited.

Therefore, your company must be vigilant to ensure it is compliant with all relevant labour, employment and human rights laws pertaining to all employees, as well as its statutory and regulatory obligations to temporary foreign workers outlined in the Immigration and Refugee Protection Act and Regulations.

If your company employs temporary foreign workers, your operation may be subject to an Employer Compliance Review.

An Employer Compliance Review can be initiated anytime from the first day a temporary foreign worker starts work to as many as six years later.

There are three circumstances that can trigger an employer compliance review: known past non-compliance, random selection and reason to suspect non-compliance (usually because a tip was received).

Among other things, inspectors will consider whether:

  • the employer has remained actively engaged in the business;
  • the employer has complied with the relevant federal and provincial laws that regulate employment;
  • the employer has made reasonable efforts to provide workers with a workplace free from abuse;
  • the representations submitted in the offer of employment (i.e. wages, occupation, hours, benefits, etc.) were accurate at the time of submission;
  • the foreign worker’s current working conditions are substantially the same as and not less favourable than those indicated in the offer; and
  • the employer has met any agreed-to commitments in the application filed with the government of Canada to hire the temporary foreign worker.

In making such determinations, inspectors have wide investigatory powers, including the authority to conduct on-site visits without warrants and interview the employee(s) and employer.

In addition, inspectors are authorized to compel employers to produce documents so as to verify and substantiate their compliance.

If your company hires temporary foreign workers, then your organization must retain all employment related documents from the first day that the temporary foreign worker’s work permit is issued and for six years after that.

Not everybody passes these inspections. There is a wide variety of reasons that employers have been found non-compliant. Areas where employers have made mistakes resulting in penalties include:

  • Not being able to show that the information listed in the offer of employment was true, for a period of six years, starting on the first day the temporary foreign worker worked for them.
  • Failing to keep documents that show the employer met the conditions of employing a temporary foreign worker, for a period of six years, starting on the first day the temporary foreign worker worked for them.
  • Failing to ensure that the job description on the Labour Market Impact Assessment application was true, for a period of six years, starting on the first day the temporary foreign worker worked for them.
  • Not giving an inspector the documents requested.
  • The pay, working conditions or the job were not substantially the same as or better than what was listed on the offer of employment.
  • The employer was not actively engaged in the business for which the temporary foreign worker was hired to work.

It is imperative that employers understand the consequences that may flow from a finding of non-compliance, as some penalties can be devastating to employers that depend on these workers to fill their labour shortages and maintain their operations.

In the event that an employer is found to be non-compliant, its name will be disclosed on the government’s public “blacklist” of non-compliant employers. This list publishes the business operating name and address, the results of the investigation and the associated consequences.

Further to being publicly disclosed on the employer blacklist, employers may receive a number of penalties which range in severity depending on both the seriousness of the violation and the employer’s compliance history.

Penalties may include warning letters, LMIA suspensions, and administrative monetary penalties upwards of $100,000. In addition, employers found non-complaint may be temporarily banned from hiring temporary foreign workers for upwards of 10 years, or may be subject to a permanent ban for egregious non-compliance. To date, the most serious penalty handed out has been a $54,000 fine and a one-year ban on hiring temporary foreign workers.

This article first appeared in Western Canada Highway News.

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MLT Aikins lawyer Carolyn Frost practises in the areas of transportation, immigration and labour and employment law. Reis Pagtakhan is a partner with MLT Aikins, practising in the area of immigration. The authors thank Christine Jeroski for her contributions to this article. 

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.