The prevailing wage for LMIA applications

The prevailing wage for LMIA applications is a term that you repeatedly see on the IRCC website. However, the phrase appears confusing to many. Therefore, I decided to write this article for clarification.

• What is LMIA?
• What is a prevailing wage?
• The median wage on Job Bank
• Exceptional prevailing wages
• Ask your questions!

What is LMIA?

Before discussing the prevailing wage, let’s talk about LMIA. A foreign national may only work in Canada, if:

• There is a genuine need for the job position in Canada;
• The hiring of the foreign national won’t affect the Canadian Labour market negatively; and
• The recruitment of foreign nationals won’t weaken the position of labour unions in Canada.

ESDC or Employment and Social Development Canada is the entity that investigates these issues at the request of an employer. Consequently, they will issue a letter to cast their opinion. They call this letter an LMIA, which stands for Labour Market Impact Assessment. A positive or neutral LMIA letter could allow the foreign national to apply for a work permit. However, an adverse LMIA letter prevents them from pursuing a work permit application. I have a more detailed article on the subject of LMIA. Nonetheless, keep in mind that some foreign workers are exempt from an LMIA or even a work permit.

What is a prevailing wage?

The government of Canada considers the highest of the following as the prevailing wage:

• The median wage on Job Bank
• The wage that is within the wage range that you are paying your current employees hired for the same job and work location and with the same skills and years of experience (source: IRCC)

I explain the first item in the next section of the article. However, for the second item, let’s consider the following example.

Your accounting department currently hires two bookkeepers. Both of them have about three years of work experience. However, you pay one of them $18 per hour and the other one $20 per hour. You intend to hire another bookkeeper who is a foreign national and has three years of work experience in the field.

If we disregard the median wage on Job Bank, for now, the prevailing wage in this example is between $18 and $20 per hour. Of course, you may play it safe and consider the average salary that is $19 per hour (i.e., ($18+$20)/2). Nonetheless, in real life, you also need to consider the median wage on Job Bank.

The median wage on Job Bank

Job bank, a government of Canada job board website, posts salary ranges for various jobs in Canada. When you look up a specific job title, they show you a typical lower range, median and higher range salary for the job. For example, the following image shows the results for the role of bookkeepers in the Toronto region.

Of course, these numbers could change over time. In reality, an employer could pay outside this range. However, this table is a good indication of how employers compensate their employees in Canada. Median wage represents the most typical salary somewhere between the low and high values. Therefore, it is not the average. Regardless, in many cases, it means the prevailing wage for the position in that specific region.

When calculating the median wage, you must focus on the region first (e.g. Toronto Region). However, you may consider the provincial median wage if the regional salaries are not available. To be on the safe side, I consider the highest value between the regional and the provincial wages. Of course, in the absence of a median salary for the province, you may consider the national median wage. Regardless, the prevailing wage is the maximum value of the salary range you offer to your existing employees and the Job Bank median wage.

In the previous example, your employees’ salary range is between $18 and $20 per hour. However, this value is less than the $21.98 per hour median wage for Toronto Region. Therefore, if you are hiring your bookkeeper for Toronto, you must pay them at least $21.98 per hour. In other words, the prevailing wage in this example is $21.98 per hour.

Exceptional prevailing wage cases

The government of Canada has particular guidelines for the following jobs. Of course, this list is subject to change:

• Pharmacy interns (excluding the Province of Quebec)
• Pharmacy students (excluding the Province of Quebec)
• Program leaders, instructors (recreation, sport and fitness)
  • Snowsport instructors (British Columbia, Alberta, Saskatchewan and Manitoba)
  • Camp counsellors (Ontario)
• Fee for service physicians
• Cold Lake
• Maritime sector
• International medical graduates in Quebec

If any of these cases apply to you, contact us or consult with the ESDC website for more information. Regardless, for Quebec jobs, consult with the official MIFI website.

Ask your questions

If you have a broad question about immigration to Canada, please post it below. Of course, a typical question is like, “What is the prevailing wage for LMIA applications?” However, if your question is specific to your case, book a consultation session with me.