A Comprehensive Guide to Low-Wage LMIA in Canada (2024)

Jorge, a 39-year-old from Bolivia, discovered an exciting job opportunity in Canada. His future employer decided to apply for a Low-Wage LMIA to initiate his work permit. However, Jorge felt curious and anxious about this process. He wondered, “What exactly is a Low-Wage LMIA?” and “Will I get a work permit?” His journey was full of anticipation, questions, and hope as he looked forward to a new life in Canada. The Low-Wage LMIA would be a crucial step toward his dream job and a fresh start.

Introduction to Low-Wage LMIA

A Labour Market Impact Assessment (LMIA) evaluates whether hiring a foreign worker will negatively impact the Canadian labour market. It ensures that the employment of a foreign worker doesn’t affect the job opportunities for Canadian citizens and permanent residents. However, not all LMIAs are the same. When employers offer wages below the provincial or territorial median, the LMIA falls under the Low-Wage category. This classification affects the application process and requirements for employers. The following table shows the current provincial median wages.

Understanding Low-Wage LMIA helps employers comply with specific regulations while ensuring fair treatment and compensation for foreign workers. The rest of this article will acquaint employers and work permit applicants with the requirements. Of course, you may always book an appointment with me for more information.

Business Legitimacy Requirements

Ensuring business legitimacy is a critical component of the Low-Wage LMIA application process. Employers must prove their business provides goods or services in Canada and that the job offer meets a reasonable employment need. Moreover, they must show their ability to fulfill all terms of the job offer.

To understand the required documents and additional details, refer to my comprehensive article on Business Legitimacy in Canadian LMIA Applications.

Recruitment and Advertisement Requirements

Recruitment is crucial for finding qualified employees and fulfilling LMIA requirements. Employers must prioritize hiring Canadians and permanent residents first. Here are the key steps:

Minimum Recruitment Requirements

1. Job Bank Advertisement: Advertise on the Government of Canada’s Job Bank. If using an alternative method, provide a written explanation.
2. Additional Methods: Conduct at least two more recruitment activities targeting different underrepresented groups, such as Indigenous persons, vulnerable youth, persons with disabilities, newcomers, and asylum seekers with valid work permits.

Understanding Underrepresented Groups

Recruiting from underrepresented groups is crucial for Low-Wage LMIA compliance. Of course, you must target at least two of these groups. Here’s a breakdown of these groups:

Indigenous Persons

Indigenous persons include First Nations, Métis, and Inuit peoples. They are the original inhabitants of North America and their descendants. The Canadian Constitution recognizes these distinct groups with unique cultural practices, languages, and histories.

Vulnerable Youth

Vulnerable youth face various barriers to employment. Canada considers the following youth vulnerable:

• Indigenous youth;
• Black and other racialized youth;
• 2SLGBTQI+ youth;
• youth with disabilities;
• youth who are early leavers from high school;
• youth living in low-income households;
• youth experiencing houselessness or precarious housing, and
• youth living in rural, remote, Northern or fly-in communities

Persons with Disabilities

A person with a disability has a long-term or recurring impairment. This includes physical, mental, sensory, psychiatric, or learning impairments. Such individuals consider themselves disadvantaged in employment due to their impairments. They believe employers also perceive them as needy. This definition covers those whose functional limitations have been accommodated at work. Disabilities can involve coordination or dexterity issues, mobility challenges, visual impairments, hearing difficulties, speech impairments, and other disabilities​. Please refer to the Canada.ca Employment Equity Groups page for more detailed information.

Newcomers

Newcomers are individuals who have recently immigrated to Canada. They bring diverse skills and experiences but may face language barriers and lack Canadian work experience. Supporting newcomers helps integrate them into the workforce and economy​.

Asylum Seekers with Valid Work Permits

Asylum seekers with valid work permits are individuals seeking refuge in Canada who are legally permitted to work. They often need employment to support themselves and their families while awaiting the outcome of their asylum claims​​.

Essential Occupations

Sometimes, ESDC identifies certain occupations as essential. Canada prioritizes the issuance of LMIA and work permits for these jobs. Since the list could change, I do not publish it here, but you may book a consultation session to see if your occupation is essential.

Job Match Service

Employers must use the Job Match service on Job Bank and select the “default” option. This service matches job seekers to the employer’s requirements, rated from one to five stars. For Low-Wage LMIA positions, employers must invite all job seekers with two or more stars to apply. However, the expectation is for the first 30 days of job posting on Job Bank. Of course, this ensures a broad pool of candidates. The Job Match service helps employers find suitable candidates quickly and efficiently. Employers must keep records of these invitations for compliance purposes.

Methods of Recruitment

Acceptable recruitment methods include:

• General employment websites
• Websites targeting underrepresented groups
• Online classified websites
• Specialized websites for specific occupations
• Newspapers or newsletters
• Community resource centres
• Employment centres
• Magazines and journals
• Job fairs
• Partnerships with training institutions
• Professional recruitment agencies
• Union consultations
• Settlement organizations
• Organizations assisting underrepresented people
• Internal company recruitment

If both additional recruitment methods are online, ensure they offer unique value and target different audiences. When using multiple similar websites, treat them as one recruitment method.

Retention of Recruitment Documentation

Keep records of recruitment and advertising efforts for six years. Provide results from recruitment efforts when requested.

Job Advertisement Duration

Advertisements must:

• Occur within three months before LMIA application submission.
• Run for at least four consecutive weeks.
• At least one recruitment activity must continue until the LMIA decision.

Some recruitment efforts could be less than four weeks. For example, you may participate in a job fair for three days. You may not consider these as your three mandatory recruitment options. However, they could complement your efforts and reflect your genuine efforts to hire Canadians and permanent residents. Therefore, conduct as many extra recruitment efforts as you can.

Job Advertisement Information

Include the following in your job advertisement:

• Company name
• Business address
• Position title
• Job Duties
• Terms of employment
• Language of work
• Wage details
• Benefits package
• Work location
• Contact information
• Skill requirements

Proof of Advertisement

Provide documentation to prove recruitment efforts:

• Copy of the advertisement
• Information on where and how long the position was advertised
• Proof that advertisements targeted the appropriate audience
• Proof of other recruitment activities

Variations to Advertising Requirements

Certain occupations and provinces have variations in advertising requirements. Here are some examples:

• British Columbia
• Saskatchewan
• Quebec

I highly recommend advertising on these websites if the employer is in any of these provinces. However, you must still advertise the job on Job Bank and target two underrepresented groups.

Important Update: The Canadian government approves a six-month freeze on new low-wage LMIA applications in Montreal, starting September 3, 2024, for jobs paying below $27.47/hour, with some exceptions.

Processing Fees for Low-Wage LMIA Applications

The processing fee for each Low-Wage LMIA application is $1,000. Employers must pay this fee to cover processing costs. You can pay using Visa, MasterCard, American Express, certified cheque, money order, or bank draft. ESDC won’t refund the payer if they withdraw or cancel the application. Additionally, a negative LMIA result does not qualify for a refund.

Employers must not recover the fee from the temporary foreign worker. In some cases, the cost is exempt. For instance, no payment is required if the job offer supports an Express Entry PR application and is not dual-intent. This exemption encourages employers to help workers transition to permanent residency.

Wage Requirements for Low-Wage Positions

Employers must offer wages to Temporary Foreign Workers (TFWs) similar to those paid to Canadian and permanent resident employees. This applies to those hired for the same job, at the same location, and with comparable skills and years of experience.

Determining the Prevailing Wage

For TFWP purposes, you must pay the prevailing wage. This is defined as the highest of:

1. The median salary on Job Bank.
2. The wage range of the current employees in the same job and location with similar skills and experience.

I have published another article that explores the prevailing wage in detail.

Excluded from Wage Calculations

Only guaranteed wages are considered when determining the wage rate. Exclusions include:

• Overtime hours
• Tips
• Benefits
• Profit sharing
• Bonuses
• Commissions
• Other forms of compensation

Unionized Positions

Employers must offer the same wage rates and compensation forms for unionized positions as those established under the collective agreement.

Variations to Wage Requirements

Some sectors have unique wage requirements that are considered the prevailing wage rate. These sectors include:

• Maritime sector jobs.
• Positions in Cold Lake.
• Fee-for-service physicians.
• International medical graduates in Quebec.
• Ski and snowboard instructors in western provinces.

For positions in Quebec, refer to the wage table provided by Ministère de l’Immigration, de la Francisation et de l’Intégration (MIFI).

Consequences of Offering Below Prevailing Wage

Offering a wage below the prevailing rate does not meet the labour market factor for wage assessment. This will lead to a negative LMIA decision.

Prevailing Wage Reviews

Starting January 1, 2024, employers must update TFWs’ wages to reflect the prevailing wage. This review, part of the LMIA and employment agreement, ensures TFWs always receive the prevailing wage. Consequently, employers must reassess and apply the prevailing wage at the start and annually, using updated wages posted on Job Bank. The updated wage must never drop below the salary identified in the positive LMIA during the TFW’s employment.

Sanctions for Non-Compliance

Failure to update wages accordingly may result in sanctions under the TFW Program’s compliance regime. These sanctions can include administrative monetary penalties and bans from using the program.

You don’t need to report a wage modification to Service Canada if it meets the prevailing wage. Consult the “Modification to a positive LMIA” to determine when a change requires contacting the Employer Contact Centre or submitting a new LMIA application.

Job Duties and Working Conditions

Temporary Foreign Workers (TFWs) hired through a positive LMIA must perform duties specific to their hired occupation. Canadian law protects all workers, including TFWs, ensuring fair treatment and safeguarding human rights. Moreover, you must adhere to all provincial and local employment laws and by-laws.

Employer Responsibilities

Employers must:

1. Pay for All Work: TFWs must receive payment for all work, including overtime (as required by law).
2. Provide Workplace Safety Insurance: Employers must offer safety insurance to protect TFWs.
3. Offer Equal Benefits: TFWs should receive the same benefits as other employees.
4. Respect Identification: Employers cannot take TFWs’ identification documents.

Legislation and Standards

Employment in most occupations is governed by provincial or territorial legislation. These laws cover work hours, working conditions, and termination of employment. Each province or territory has a Ministry of Labour assisting with work-related questions or issues.

Federal Regulation

Some employers are regulated federally by the Canada Labour Code, which ensures consistent protection for all workers under its jurisdiction.

Cap on Low-Wage Positions

As of April 30, 2022, employers face a 20% cap on hiring temporary foreign workers (TFWs) for Low-Wage positions at each work location. This cap ensures Canadians or permanent residents have priority for available jobs. For example, if 50 people work at a workplace, ten or fewer may be Low-Wage TFWs.

Increased Cap for Specific Sectors

Starting May 1, 2024, certain sectors can hire up to 30% of TFWs for Low-Wage positions. Eligible sectors include:

• Construction (NAICS 23)
• Hospitals (NAICS 622)
• Nursing and Residential Care Facilities (NAICS 623)

Please note that this list is subject to change. Book a consultation for official advice.

Application Requirements

Employers must complete the “Cap for Low-Wage Positions” section in the LMIA application. They may need to submit documents like payroll records to prove compliance with the cap.

Important Notes for Employers with Less than 10 Employees

1. Employers with fewer than ten employees nationally no longer have cap exemptions as of April 30, 2022.
2. Employers with a workforce of fewer than ten must complete the cap section, including TFWs on approved LMIAs that have yet to start.
3. Employers can hire a maximum of 2 TFWs (20% cap) or 3 TFWs (30% cap) based on the industry.

Exemptions to the Cap

Certain applications are exempt from the cap, including:

• On-Farm Primary Agriculture: Positions like labourers, workers, and managers for NOC codes 80020, 80021, 82030, 82031, 84120, 85100, 85101, and 85103.
• Caregiving Positions: Healthcare institution roles for NOC positions 31301, 32101, and 33102.
• Permanent Residence Applications: Positions supporting a TFW’s permanent residence through Express Entry.
• Highly Mobile or Truly Temporary Positions: Roles lasting 120 calendar days or less, extendable if the peak season, project, or event continues.
• Seasonal Low-Wage Positions: Jobs in industries with significant fluctuations in labour demand, not exceeding 270 calendar days.

Employers can use the one-time exemption per work location each year. To use this exemption for multiple applications, submit them simultaneously.

Transportation and Housing Provisions

Transportation Costs

Employers must pay for the round-trip transportation costs for TFWs to arrive at their work location in Canada at the beginning of their work period and return to their country of residence at the end. This ensures that TFWs do not bear the financial burden of travel expenses.

• Initial Travel: Employers cover the costs of TFWs travelling to Canada.
• Return Travel: Employers pay for the return trip when the work period ends.
• New Employer: If a TFW switches to a new employer with a positive LMIA, the new employer assumes transportation costs.
• No Cost Recovery: Employers must not recover transportation costs from the TFWs.

Housing Requirements

Employers must provide or ensure that suitable and affordable housing is available for TFWs. This housing must meet specific standards the Canada Mortgage and Housing Corporation defines.

• Suitable Housing: Housing must not require major repairs, such as fixing plumbing, electrical wiring, or structural elements.
• Affordable Housing: Housing costs, including rent and utilities, should be less than 30% of the TFW’s before-tax income.
• Proof of Housing: Employers may need evidence of affordable housing, such as newspaper ads.

Health Insurance and Workplace Safety

Health Insurance

Employers must obtain and pay for private health insurance that covers emergency medical care for TFWs not covered by provincial or territorial health insurance.

• Coverage Start: Insurance must start from the TFW’s first work day.
• No Cost Recovery: Employers cannot recover insurance costs from TFWs.
• Inspection Compliance: Inspectors will verify that the insurance covers at least basic emergency health care and that costs are not charged to the worker.

Workplace Safety

Employers must ensure that TFWs are covered by provincial or territorial workplace safety insurance or an equivalent private plan.

• Insurance Requirements: The plan must provide compensation equal to or better than provincial or territorial plans.
• Consistent Coverage: All employees at the worksite must be covered by the same provider.
• First-Day Coverage: Insurance must start on the TFW’s first workday, with no cost recovery from the TFWs.

Pesticides and Chemical Use

Employers must inform TFWs about the use of pesticides or chemicals in the workplace and provide necessary safety measures.

• Protective Equipment: Employers must provide protective gear at no cost.
• Training and Supervision: Employers must offer formal and informal training and necessary supervision.

Following these guidelines ensures a safe, fair, and compliant working environment for TFWs in Canada.

Employment Agreements

Although a copy of the employment agreement isn’t required when submitting the LMIA, employers must provide a completed and signed contract to each TFW before their first workday. The employment agreement should:

• Match the Job Offer: Include details for employment in the same occupation, with the same wages and conditions as in the job offer.
• Language Preference: Be drafted in English or French, based on the foreign worker’s preference.
• Signed Agreement: Be signed by both the employer and the TFW.

Employers can create their agreements, provided they include all necessary information. Alternatively, they can use the provided employment agreement template. Employers must maintain comprehensive records throughout the employment process that document compliance with the agreement.

For positions in Quebec, employers should refer to the MIFI website for specific requirements.

Employment Contracts in Maritime Transport

For positions on foreign vessels in Canadian waters, employment contracts must also specify:

• Applicable Dates: Dates when Canadian employment laws and regulations apply.
• Wage Details: Monetary and non-monetary compensation details, including wage “uplift” and payment methods.

Language of Work

Employers can only specify English or French as job requirements in LMIA applications and job advertisements. If another language is essential, employers must justify this in the application.

Positions with No Language Requirement

In rare cases, a job might not require any language skills. Employers must provide detailed explanations, including:

• Effective Job Performance: How the TFW will perform duties effectively and safely without language skills.
• Health and Safety Measures: Reasonable measures are in place to ensure everyone’s health and safety at the workplace.

Employers must also provide appropriate documentation to support these measures. Examples of reasonable measures include:

• Translated Materials: Translated workplace safety manuals and procedures.
• Safety Training: Providing workplace safety training in the TFW’s identified language.
• International Signs: International safety signs with symbols are used.
• On-Site Translators: Having official translators available on-site.
• Bilingual Staff: Employing workers or supervisors who can communicate with the TFW.

Special Provisions for Unionized Positions

When hiring TFWs for unionized positions, employers must:

• Match Collective Agreement: Advertise and offer the same wage rates and terms as the collective agreement.
• Same Conditions: Offer TFWs the same terms and conditions as Canadian and permanent resident workers.
• Submit Wage Structure: Submit a copy of the collective bargaining agreement section on the wage structure.

Hiring TFWs must not impact current or foreseeable labour disputes. During the LMIA assessment, if it is determined that hiring TFWs could affect the outcome or settlement of any labour dispute, the LMIA application will receive a negative decision.

Employers should work closely with union representatives to effectively recruit Canadians and permanent residents.

We Can Help!

At Parsai Immigration Services, we have helped many employers apply for LMIA, and many employees apply for work permits. Book a consultation session today for official immigration advice. Alternatively, if facing immigration hurdles, you may fill out the following form.