Immigration Update and Employer Immigration Update and Employer - - PowerPoint PPT Presentation

Immigration Update and Employer Immigration Update and Employer Compliance – What You Don’t Know Can Hurt You

September 2014

Bill MacGregor

Introduction

• Focus of presentation is on immigration compliance, recent

developments, and what companies using Temporary Foreign Workers (TFWs) in Canada need to know to avoid problems Workers (TFWs) in Canada need to know to avoid problems

• Trends:

G t t l d th i d i i k

• Greater onus put on employers and their decision-makers
• Increased penalties and consequences for failure to comply

F il t f ll l ill ti l ff t b i th t

• Failure to follow rules will negatively affect businesses that

employ foreign workers, or move personnel across borders

• e.g. Visa or entry refusals; red flags on travelers; company reputation at

g y ; g ; p y p visa office or border could be tarnished etc.

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Penalties and Consequences

Under IRPA (Canada’s immigration legislation)

• S124 - violation if you employ a foreign worker in Canada

without proper authorization

• Deemed knowledge of violation unless you can show

due diligence was used to determine whether Temporary due diligence was used to determine whether Temporary Foreign Worker (TFW) was authorized to work

• S126/127 – violation where anyone directly/indirectly

y y y misrepresents or omits to provide a material fact that “could induce an error” applying IRPA P lti i l d fi t $100 000 d j il ti

• Penalties include fines up to $100,000 and jail time
• Employers found non-compliant face 2 year ban from being

able to use TFWs and new monetary penalties able to use TFWs, and new monetary penalties

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Entering Canada for Business Purposes

• Key Question: Does the activity in Canada require a work

permit?

• If not, may enter as a business visitor
• Common misconceptions about work permit requirements:
• Short visit = no work permit needed
• No direct pay in Canada = no work permit needed

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• What matters is the purpose of entry / activity
• If a work permit is needed then must identify a category that
• If a work permit is needed, then must identify a category that

fits the worker and the purpose of entry

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Canadian Work Permits

• To work in Canada, TFW must usually obtain a Canadian work

permit

• A work permit is a document that sets out the occupation, work

location and employer in Canada Citi f t i th t i T R id t Vi

• Citizens of countries that require a Temporary Resident Visa

(includes China) must apply at a visa office for a work permit

• Must have properly prepared and documented supporting

Must have properly prepared and documented supporting package for any application

• There are two main work permit categories for Chinese

nationals: 1. Intra-Company Transferee; or 2. LMIA (formerly call LMO) Based Work Permits

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Intra-Company Transferee Work Permit Category

• For employees at “executive” or “managerial” level, or who

have “specialized knowledge”

• Must: (1) be currently employed by; and (2) have worked full-

time for at least 12 consecutive months in preceding 3 years for, a properly related foreign entity outside Canada for, a properly related foreign entity outside Canada

• Must prove proper ownership relationship between foreign

employer and Canadian (e.g. parent – subsidiary; two p y ( g p y affiliates owned by common parent company etc.)

• Initial work permit granted for up to 3 years
• Time cap of 5 years for specialized knowledge workers, 7

years for managers/executives

• Special rules for start-up situations

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Intra-Company Transferees – Specialized Knowledge

• Canada changed “specialized knowledge” rules in June 2014
• Tougher definition of “specialized knowledge”:

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• Applicant must show a high degree of both proprietary knowledge and

advanced expertise M t d t t d d i t k l d hi h i “

• Must demonstrate advanced proprietary knowledge which is “uncommon

knowledge of the company’s products or services and its application in international markets”; or “an advanced level of expertise of the company’s processes and procedures such as its production, research, p y p p p , , equipment, techniques or management”.

• Mandatory wage floor introduced: TFW must be paid at least

th ili f th ti d l ti f k the prevailing wage for the occupation and location of work

• Changes make it more difficult to transfer specialist

employees to Canada employees to Canada

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Labour Market Impact Assessments / LMIAs

• LMIAs (formerly called Labour Market Opinions/LMOs) are the

basis for many Canadian work permits

• Canadian or foreign employer may apply for permission to hire

a TFW in Canada by applying to Service Canada

Employer must demonstrate that no qualified Canadians can be found

• Employer must demonstrate that no qualified Canadians can be found
• Must meet strict recruiting rules (content, placement and duration of job

listings)

• Must pay at least prevailing wage for the occupation and location
• Cannot use language (other than English or French) as a job requirement

unless it is essential for the job in Canada

• If LMIA is granted, the TFW may then apply for a Work Permit

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New Regulatory Regime of January 1, 2014

• To “detect and deter employer non-compliance”
• New IRPA Regulations introduced January 1, 2014
• Significant changes to IRPA Regulations
• Many more statutory requirements put on employers (both for

LMIA and LMIA exempt work permit situations) L th f li i d i d f 2 t 6 (b t t

• Length of compliance period increased from 2 to 6 years (but not

retroactive)

• Broad powers of inspection granted

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• Tougher “substantially the same” test

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New Regulations: Tougher Employer Conditions For all TFW situations (LMIA based or LMIA exempt):

• Must comply with laws regulating employment and recruiting
• Must provide each TFW with “same occupation”, and wages and

working conditions which are “substantially the same – but not less favourable than” the TFW’s offer of employment p y

• Must make “reasonable efforts” to provide a workplace free from

abuse

• During the “period 6 years beginning on the first day of employment

for which the work permit is issued”, (1) must be able to show any information provided to get LMIA or Work Permit was accurate AND p g (2) must retain any document that relates to IRPA compliance.

• Failure to comply is only justified if employer “made all reasonable efforts” to

comply

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New Regulations: Inspection Powers

Very broad inspection powers given to government officers: M ith t t t l h TFW

• May occur without a warrant at any place where TFW

works or did work in Canada I ti t d d d t t

• Investigators may demand any documents or access to

computer systems (

• Triggered randomly or where there is a concern (so a

complaint to the government may trigger inspection)

• Can occur anytime up to 6 years from first date of

employment of TFW

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Recent Overhaul of Canada’s TFW Program

• Major changes to the TFW Program made June 20, 2014
• Affects almost all aspects of the program
• Continues trend of placing greater compliance

requirements on employers using TFWs

• Split Canada’s program into two streams:
• Temporary Foreign Worker Program, administered by

ESDC/Service Canada, to deal with LMIAs (formerly LMOs) I t ti l M bilit P d i i t d b I i ti

• International Mobility Program, administered by Immigration

Canada, for all LMIA-exempt work permits

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Recent Overhaul: New LMIA Regime

• LMIA application fee increased to $1,000 (from $275)
• New “high wage” v. “low-wage” job concept based on

provincial median wage

New % cap on number of low wage TFWs allowed per work site

• New % cap on number of low-wage TFWs allowed per work site
• Change reduces ability to use TFWs in lower skill positions

LMIA f l kill i i i d i f d

• LMIAs for lower skill positions in accommodation, food

services and retail trade sectors can only be obtained in economic regions where unemployment rate is less than g p y 6%

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Recent Overhaul: New LMIA Regime cont.

• Employers must now usually provide a Transition Plan
• utlining activities to reduce reliance on TFWs
• utlining activities to reduce reliance on TFWs
• Transition Plan will be assessed by Service Canada on

subsequent LMIA applications

• Employers must demonstrate compliance with the Transition Plan
• New 10 Business Day LMIA processing for: (a) highest

paid occupations i.e. where the TFW will work in an

• ccupation/NOC that has a median wage that is in the

top 10% of wages for the province where the job is top 10% of wages for the province where the job is located; (b) highest demand skilled trades; and (c) short duration (less than 120 days) entries

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Recent Overhaul – Other Changes

• New LMIA forms as of June:

Employers must provide more information on recruiting results

• Employers must provide more information on recruiting results
• More employer declarations/representations in form
• New Transition Plan form

New Transition Plan form

• Stronger compliance and enforcement mechanisms:

N t fi f li t b i t d d

• New monetary fines for non-compliance to be introduced
• More resources to be put into employer inspections
• International Mobility Program (non-LMIA work permits):
• New work permit fees to be introduced
• Enhanced employer compliance requirements

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Tips for Foreign Businesses Coming to Canada

• Consider an ownership structure to maximize work

permit options

• This may allow for intra-company work permits
• The Canadian entity MUST be properly related to the foreign

employer of the transferee to be eligible employer of the transferee to be eligible

• Sales or software licensing agreements from foreign

vendor to Canadian customer: vendor to Canadian customer:

• Proper contract language may support entry as after-sales service

business visitors

• E.g. installers, trainers or personnel providing warranty repairs

relating to non-Canadian equipment or software sold to a customer in Canada

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Options for Investors / Business People

• Can you invest to get Canadian permanent (PR) status?
• The “passive investor fallacy”
• No federal investor program
• Provincial Nominee Programs (PNPs) for business

/ people / entrepreneurs:

• Minimum personal net worth and investment requirements

Th “1/3 hi l ” Thi i ll th i i hi

• The “1/3 ownership rule” – This is usually the minimum ownership

% required by PNPs

• All PNPs require ongoing active management in Canada.

q g g g

• Must create and/or maintain jobs for Canadians
• Other immigration solutions e g work permit in Canada

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Other immigration solutions e.g. work permit in Canada and then transition to PR status?

Best Practices for Immigration Compliance

Employers need to adopt best practices and policies.

• Keep up to date on changes to rules and requirements

Keep up to date on changes to rules and requirements

• Recruiting protocols to ensure consistency

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• Review content of LMIA and Work Permit applications
• Document retention relating to TFWs and recruiting – will

need to be maintained for 6 years need to be maintained for 6 years

• Changing employment terms of TFWs in Canada – need

protocol in place to avoid non-compliance protocol in place to avoid non compliance

• Consider moving TFWs to permanent status as soon as

possible to “narrow” compliance requirement window p p q

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Conclusion

• Companies engaging TFWs in Canada need to be aware
• f trend of increasing compliance requirements and

ti f li negative consequences of non-compliance

• Companies and their managers may face liability for non-

li compliance

• Companies must be able to demonstrate ongoing

li h th TFW i C d d LMIA compliance, whether TFWs are in Canada under LMIA or LMIA exempt Work Permits P ti h t i b d hi i f i

• Proactive approach to crossing borders, hiring foreign

workers and implementing strong internal systems and policies is critical to ensure compliance

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Thank You

Bill MacGregor Tel: 519-575-7528 Email: bill.macgregor@gowlings.com

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