LMIA in Canada: 7 Tips for Employers

Canadian employers facing labour or skill shortages have the option of hiring a foreign worker. But they can’t just hire anyone. Rather, they should make genuine efforts to hire Canadians and permanent residents first. In fact, this is the core of most Labour Market Impact Assessment (LMIA) applications.

Only if a business can’t find a suitable candidate among locals should it seek permission from the government to hire a temporary foreign worker. The process of getting such confirmation is what a Labour Market Impact Assessment entails. Not only does this process have a lot of legal specifics, but also one minor omission, not even a mistake, can end in refusal. For example, inadequate advertising and offering a low salary can lead to denial, but that is not everything; there are more examples below.

The most unfortunate scenario for an employer is the associated cost and delay in the case of LMIA refusal. It means having to re-advertise (again!), pay a CAD$ 1,000 processing fee (again!), and wait for processing when there is a drastic need for a worker, leading to unhappy clients, delays, and other circumstances.

Below are LMIA tips and specifics that we recommend all Canadian employers get briefed on. Indeed, these are a few important pieces of advice for employers wishing to hire foreign workers and who need to apply for a Labour Market Impact Assessment.

1 - Labour Shortage Must Be Real

A Labour Market Impact Assessment (LMIA) is only worth applying for when there is a genuine need for a foreign worker. It is not meant to discourage applying for an LMIA, but first, consider the following:

Do you encounter a real employment shortage? There are various possible scenarios when it is genuine. The truth is that some jobs are hard to perform, and Canadians do not want to apply. For others, you would need someone with a deep understanding of your community background, values, or even language, which may well be essential for a particular position. Or, a business may need a worker with specialized knowledge, which is in short supply in Canada.

Just keep in mind, there are resources that the Employment and Social Development Canada (ESDC) and Service Canada officers may check to verify the genuineness of a need for a foreign worker. Job Bank Outlook, for example, allows officers to explore employment prospects for various jobs and occupations in Canada’s locations. If the job opportunities are limited for the occupation in which you want to hire a foreign worker, chances of getting a positive LMIA are low, except when there are some unique requirements.

The message here is - if an employer faces a genuine labour shortage, only then should they apply for assessment. On the contrary, if there is no labour need, but there is a goal for a family, relative, or good friend to immigrate to Canada, there are many other programs more suitable. If you are still serious about hiring a foreign worker, you will want to continue reading.

2 - Select Suitable LMIA Stream

There are various Labour Market Impact Assessment (LMIA) Streams. Ultimately, the assessment will come down to whether or not an employer has met all the conditions for a particular stream. These include, for instance, requirements for job advertisement, employer's eligibility, forms, supporting documents, and fees.

For example, ABC Company intends to hire a foreign worker for the position of Web Developer. Most LMIAs must meet minimum advertising requirements, which is to post a vacancy in three or five sources for four weeks within three months, etc. However, this specific occupation is exempt from it under the Global Talent Stream. Thus, an employer might have spent around a month and paid for advertising simply because they were not aware of this variation.

On the contrary, there are restrictions for non-compliant employers or those whose LMIAs were revoked within two years. Thus, requests from ineligible employers will not even be processed and are likely refused.

So, the takeaway - it is very important to check in advance whether any limitations, conditions, and exemptions exist for a position for which an employer wishes to hire a foreign national. Then select the appropriate LMIA stream.

3 – Follow & Comply with LMIA Application Requirements

It can’t be emphasized enough how important this one is. Labour Market Impact Assessments (LMIA) are highly technical applications with lots of details and very strict deadlines.

For example, each LMIA type has its own set of requirements and questions asked in the LMIA online form. If the company answers questions wrongly and the wrong form is generated, the application may be returned as incomplete or refused. The issue here could be the time. An LMIA requirement is that companies must apply for assessment within three months from the start of advertising. Commonly, LMIA processing time is up to six months depending on the stream, with some exemptions. So, when the processing starts, and if the package is returned as incomplete or refused, it usually crosses the three-month deadline. As a result, the application is considered as one that has never been submitted and the deadline has already passed. The employer would need to start over from the beginning: new advertisement, recruitment, fees, and the worst - waiting time – another about half a year. To prevent this from happening – double, triple-check everything on the day of submitting an application.

Another common issue lies in a job advertisement itself. It should not be too restrictive or general. Rather, it must attract the largest number of job applications from Canadians. If it is simply a match of a foreign worker’s resume, it will not pass the screen by an officer.

LMIA wage is another intricate area. It is well known that both a job advertisement and wage offered to a foreign worker must be equal to or above the median wage for a particular occupation and location.

Still, what is hard to predict is the increase in the median wage. The government may increase the prevailing wage at any time. If the raise is more than 10%, an ongoing advertisement and salary offered to a temporary worker must be increased too.

Let’s say if the hourly wage increased by CAD 5, this will result in an additional CAD 800 per month or CAD 9,600 per year. This may well be above the employer’s initial estimation, budget, and what it can pay at all. The solution is to either accept the increase or start over again with a different job. Again, new advertisement, recruitment, fees, and the worst - waiting time – another half a year or so.

4 – Answer ESDC’s Questions Promptly

In some cases, Employment and Social Development Canada (ESDC's) officer contacts the employer or lawyer to clarify information. The request may be related to recruitment efforts, business finances, and operations, tax documents, industry standards, or any other area of concern. If ten days are given for response, it is a strict deadline unless an extension to gather documents has been requested. Not responding on time is likely to result in a negative Labour Market Impact Assessment (LMIA) or refusal.

5 – Prepare for Employer’s Interview with ESDC Officer

Likewise, officers conduct Labour Market Impact Assessment (LMIA) interviews with employers before making a decision. It is not mandatory, but in the majority of cases, officers prefer to do it. Any questions related to the LMIA application may be asked.

It is very important to review the application right before the interview and remind yourself of such important information. Any discrepancies or controversies between the application and the employer’s responses will be disadvantageous for the assessment.

When allowed by the Department of Employment and Social Development Canada (ESDC), employers can request their representatives to join the interview and help with some answers. Based on our experience of representing employers in LMIA applications, certain questions are common and almost always asked.

6 - Apply for an LMIA-based Work Permit Within 6 Months

A positive Labour Market Impact Assessment (LMIA) is just a part of the process of getting a foreign worker to do a job in Canada. When the Department of Employment and Social Development Canada (ESDC) issues a confirmation letter, it is the employer who must notify the foreign worker immediately. Ultimately, a worker should apply for a work permit and will need an employment agreement/job offer letter, a copy of the LMIA, and the LMIA number.

A common mistake is a delay in applying for a work permit. Often, it is due to confusion between the LMIA expiry date and the duration date. The expiry date is usually within six months from the issuance of the LMIA. It is the date by which a foreign worker must have applied for a work permit. In other words, if he has not applied by that date, the LMIA is no longer valid. This is the worst scenario for the employer who has gone through the LMIA process, and, due to a mistake, now must apply for a new LMIA.

The maximum duration of employment that can be requested under LMIA is up to three years depending on the stream. However, if a foreign worker has not applied for an LMIA-based work permit within six months, then, even if the permit under LMIA work duration is three years, it will no longer be valid.

7 - Employer’s Compliance With LMIA

It is not just a right to have a foreign worker but also a serious responsibility. Service Canada inspects such employers randomly. In brief, employers must comply with the terms of a job offer approved through LMIA.

Non-compliance may result in a warning, a penalty, or a ban from hiring temporary workers. The penalty ranges from $500 to $100,000 per violation, up to a maximum of $1,000,000 over one year. The ban is from 1 year to permanent.