Low-wage LMIA Stream

Essential Aspects of the Low-Wage LMIA Application

In this article, we discuss the characteristics of the Low-Wage Labour Market Impact Assessment (LMIA) Stream in detail. For those exploring various options, it might be helpful to begin with an overview and comparison of the different LMIA streams.

Canadian firms typically use the Low-Wage LMIA when hiring temporary foreign workers for low-wage positions. If an hourly wage offered to a temporary foreign worker falls below the provincial median wage plus 20% for that job's location, then it's classified as a low-wage position, and the Low-Wage LMIA becomes the appropriate choice. 

Many employers want to know the minimum wage rate they must offer to qualify for an LMIA to hire foreign workers. To better understand wage requirements, read about the LMIA wage rate, or, if you are sure about the wage rate, continue reading this article about the Low-Wage LMIA Stream.

Checklist to Determine if a Business Can Hire a Foreign Worker Using the Low-Wage LMIA Stream

The primary criteria, such as business status, occupation, wage, and cap, that determine whether a business can use a Low-Wage LMIA to hire foreign workers are listed in the table below. If you answer "yes" to all the following questions, you may consider using the Low-Wage LMIA to hire foreign workers.

• Is the business operational and in good financial standing?
• Does a business aim to hire foreign workers for low-skilled or semi-skilled positions because these vacancies cannot be filled by Canadians or permanent residents? Such jobs typically demand only a basic level of education, training, or experience and don't require specialized knowledge. The skills essential for these roles can be acquired relatively quickly on the job. Please note that recruitment efforts should be undertaken prior to submitting an LMIA application.
• Does the hourly wage for a foreign worker meet all of the following criteria? 1) It equals or above the median occupational wage in the job's location. 2) It falls under the provincial median wage plus 20% in the job's location. 3) It is consistent with the range currently paid to other employees in the same role, with equivalent skills, and in the exact location.
• Is the job located in a census metropolitan area with an unemployment rate of less than 6%, or does it fall under one of the exceptions even if the unemployment rate is higher? [See details below.]
• Does a business meet the cap set for the low-wage stream or qualifies for an exemption? [See details below.]

The Cap under the Low-Wage LMIA

Employers can only hire a certain number of foreign workers per job location in low-wage positions. The purpose of this cap is to ensure that Canadians and permanent residents are prioritized for vacant jobs.

Therefore, identifying the cap is a primary consideration.

• General rule - a 10 % cap limit on the proportion of foreign workers that can be hired in low-wage positions at a specific work location.
• Higher cap for specific occupations in defined industry sectors - a 20% cap on the proportion of foreign workers that can be hired in low-wage positions in the following industry sectors:
  • Construction
  • Food manufacturing
  • Hospitals
  • Nursing and residential care facilities
  • Educational services
  • Healthcare and social assistance – specific positions in caregiving: registered nurse or registered psychiatric nurse; licensed practical nurse; home childcare providers; attendant for persons with disabilities, home support worker, live-in caregiver, personal care attendant; In-home caregivers.
• No cap - exemption allowing an unlimited number of foreign workers that can be hired in low-wage positions in the following jobs:
  • On-farm primary agricultural positions (National Occupational Classification [NOC] codes 80020, 80021, 82030, 82031, 84120, 85100, 85101, and 85103)
  • Caregiving positions for health care institutions (NOC codes 31301, 32101, and 33102)
  • Jobs supporting a permanent residence visa
  • Highly mobile positions, i.e., involving regular crossing of provincial, territorial or international borders
  • Truly temporary positions, i.e., with a duration of employment of 120 calendar days or less, and when the position will no longer exist after a foreign worker finishes work (e.g., leaves the country)
  • Positions in seasonal industries having peak and off-peak periods at the same time around a year, with a duration of employment of 270 calendar days or less per year
• Small businesses with fewer than 10 employees - employers who have fewer than 10 employees nationwide can hire 1  temporary foreign worker, or 2 - for industries with a 20% cap.

If you don't meet a cap, consider offering a wage equal to or above the provincial median and hiring foreign workers using the High Wage LMIA.

Refusal to Process LMIA

Employers cannot apply to hire temporary foreign workers for low-wage positions if the job is located in a census metropolitan area with an unemployment rate of 6% or higher. To address this limitation, employers can offer a high wage (i.e., a rate equal to or above the provincial median wage) and apply under the High-Wage LMIA stream.

Certain occupations in specific sectors and subsectors are exempt from refusal, even if they are located in areas with an unemployment rate of 6% or higher. These include:

• Occupations in primary agriculture
• NAICS 23 – Positions in construction
• NAICS 311 – Positions in food manufacturing
• NAICS 622 – Positions in hospitals
• NAICS 623 – Positions in nursing and residential care facilities
• Specific in-home caregiver positions under: NOC 31301 – Registered nurse or registered psychiatric nurse; NOC 32101 – Licensed practical nurse; NOC 44100 – Home childcare providers; NOC 44101 – Attendant for persons with disabilities, home support worker, live-in caregiver, personal care attendant.
• This exemption also applies to positions that support permanent residency applications only (without a work permit application).

Statistics Canada updates the unemployment rates quarterly, April to June, July to September, October to December, and January to March. Employers should proactively check these unemployment rates before they start the low-wage LMIA process. 

Employer Obligations Specific to Hiring under the Low-Wage LMIA

Once you've determined that the Low Wage LMIA is a stream that your business can use, it's important to understand the additional employer obligations specific to this stream:

• Pay for the round-trip transportation costs for the foreign worker to arrive at their work location in Canada and return to their country of residence at the end of their work period.
• Provide or ensure suitable and affordable housing is available. Suitable housing does not require major repairs. Affordable housing costs less than 30% of a foreign worker’s pre-tax income, including municipal services (electricity, fuel, water, etc.)

As with any other LMIA, employers must provide emergency medical care insurance and workplace safety insurance (where mandated by law) from the first day of the foreign worker's employment.

A company should not pass on the costs of transportation, housing, or insurance to the worker.

Maximum Employment Duration Under Low-Wage LMIA

Employers whose Low-Wage LMIA has been approved can sponsor a temporary worker for a maximum employment duration of 1 year. After this period expires, they can apply for a new LMIA.

The only exception of a 2-year duration exists for low-wage positions in meat processing. The business’s main activity must be in the manufacturing of meat products and hiring for the following roles: butchers (retail and wholesale), meat cutters and fishmongers (retail and wholesale), agricultural service contractors and farm supervisors, specialized livestock workers and farm machinery operators, livestock labourers, industrial butchers and meat cutters, poultry preparers and related workers, and labourers in food and beverage processing.

Low-Wage LMIA Processing Time

The processing time for a Low-Wage LMIA application by the Employment and Social Development Canada (ESDC)/Service Canada is approximately 2-3 months.

Start LMIA 

Depending on business conditions, stages, and needs, there are specific steps to follow in the LMIA process.

If you are looking for a corporate immigration law firm or lawyer in Canada, we are here based in Toronto to help. Call us at +1-647-493-5205 or email info@leromlaw.com for additional information you need to start the process.