When drafting or assessing an open position for temporary workers, businesses or their consultants need to obtain a Labour Market Impact Assessment. LMIAs are designed to provide the Canadian government with insight into the impact of foreign temporary employees on the local labour market, including the unemployment rate among Canadian residents.
This process also assures that foreign workers are placed in the required position at the right time, at a fair pay rate, and with the right credentials. It comes into view when there are no local skillsets to handle advertised job openings. This guide helps readers understand the financial implications of an LMIA. So kindly read on to learn more.
Introduction to LMIA
Foreign workers who intend to work in a Canadian company need to go through a process before getting hired. This is where LMIA comes into view. It is a document a Canadian employer must have before foreign recruitment as it indicates the need to fill a position with low-wage or high-wage workers. It also applies to workers need for either the Agricultural Stream or Seasonal Agricultural Worker Program.
Before receiving this confirmation letter, the hiring firm in need of skilled expatriates must demonstrate that the locals or permanent residents aren’t suitable for openly advertised offers. If satisfactory, the company receives the LMIA document, alongside a number, with which it can proceed with the foreign recruitment.
Once in place and coupled with other requirements like a contract and an offer letter, the foreign staff can apply for a Canadian work permit.
Understanding the criteria for eEligibility
Although Misapplies to temporary foreign workers, it exempts some of these individuals. Employers can learn more about this by reviewing either work permit exemptions or LMIA exemption codes. The former falls under the Authorization to Work without Permit category, which ranges from R186(a) Business Visitor to R186(x) Registered Indians, while the latter is situated within the legislative sections, ranging from A25.2 Public Policies to R207 Permanent Residence Applicants in Canada.
Workers in these categories don’t need the documentation to apply for a work permit in Canada. The International Mobility Employees Unit provides extra eligibility information. It comes in handy for individuals from visa-exempt countries who reside outside Canada.
Considerations for approval
Since ESDC issues LMIA, it will assess an employer’s recruitment to ensure it doesn’t violate or affect the labour market. Hence, the agency will request detailed information, including:
- Specific job posting for expatriates
- Number of Canadian applicants and interviewees (if any)
- Application denial reasons for Canadian citizens and PRs
But that isn’t all. Other aspects come into play, including the viability of labour shortage in the particular hiring industry, compliance of working conditions with labour laws alongside employment agreements, salary consistency with the national average pay, the hiring process effect on the local labour market, the transference of such skills to Canadians.
Hiring a foreign skilled worker comes with the same conditions as a citizen or PR. Employers must ensure that the work environment is conducive and safe. There should be payments for the duration worked, overtime inclusive. Concerning this factor, an employer must determine the prevailing wage using the current pay grade for similar positions.
A prevailing wage calculation is required for jobs that fall under the unionized category. In this situation, it makes sense to use a collective bargaining agreement. For non-union jobs, a median wage estimate will be required. Job Bank can assist employers here. Once calculated, the median wage becomes the prevailing wage.
Finally, skilled workers should receive breaks and days off. Undoubtedly, there is a significant financial and time benefit for employers hiring a foreign skilled worker. When properly qualified, it’s an assurance that they will stay in the long run. Employers must also consider their obligations and ensure compliance in case they choose to make these workers full-time.
Some employers find that their work culture may not be right for a foreign worker, or that the relationship may not develop as expected. In any case, there are ways they can help create a workspace favourable to employee well-being and personal fulfilment. These could come in the form of non-monetary benefits.
Application Processing Time for an LMIA
It typically ranges from one to three months. Some are completed in 10 working days, which encompasses highly-skilled, high-paying, and short-term jobs. The document is valid for six months and once it expires, employers can’t renew it as it is one-time. Instead, they must re-apply.
Other (LMIA) requirements including costs
A fee of $1,000 CDN is required per application. Employers also have to pay an additional fee of $100, known as a privilege fee. These costs come with other requirements like:
- Openly listing a job position on the Canadian Job Bank website for a minimum of four weeks. In addition, the employer must have implemented two other hiring means or more.
- Prioritizing general strong language skills, which can be either English or French or any other one that is in high demand.
- Detailing proof of helping expatriates become Canadian PRs or investing in apprenticeships or skills training for the locals.
- Submitting a transition plan to ESDC, especially for advertised high-paying job positions.
As a condition of receiving application clearance, employers must not lower working hours or lay off local workers in favour of their foreign counterparts.
Employers confronted with the challenge of obtaining a qualified workforce find LMIA straightforward and rewarding. The process isn’t a magic trick, so they need to do their research. One wrong move could have severe consequences.
Understand that ESDC oversees the application approval, classified under the Temporary Foreign Worker Program (TFWP). However, the paperwork isn’t equivalent to a resume screening or an interview. The resume screening will determine if an applicant qualifies for an advertised position; an interview will evaluate the individual’s personality. But neither of them is a formal labour assessment.
There will be a lot of questions to answer when it comes to hiring a foreign skilled worker, but the answers are simple. If employers stick to the guidelines, they will create a work atmosphere that will result in positive outcomes.