Sponsor 0:05
ANNOUNCER. This episode of the Canadian immigration podcast is sponsored by the Canadian immigration Institute, one of the best sources of video content on Canadian immigration to help you navigate your way through the Canadian immigration process. Head on over to the YouTube channel, where there's tons of video content, and you can join mark yes myself in a number of live video streams, Q and A's all designed to help you navigate your way through this crazy Canadian immigration process. When you're done there, like and subscribe and then head on over to the Canadian Immigration institute.com where you can find all those awesome DIY courses that I've been talking about. Thank you, Canadian immigration Institute. You are the sponsor of this amazing little podcast. You
Speaker 1 1:05
i The Canadian immigration process can be complex and frustrating with the Canadian Immigration Department making it virtually impossible to speak to an officer. There are few places to turn to for trusted information. The Canadian immigration podcast was created to fill this void by offering the latest on immigration law, policy and practice. Please welcome ex immigration officer and Canadian immigration lawyer Mark Holthe as he is joined by industry leaders across Canada sharing insight to help you along your way.
Mark Holthe 1:51
Welcome back everyone to another episode of the Canadian immigration podcast. This is episode 173 and we are flashing back to our business immigration series, in all circumstances happen Alicia, where we see repeated patterns, and we think to ourselves, oh, we really need to do an episode on this topic, because people are just not getting it. And in this case, with our lovely holiday season approaching us, and it's the time of giving from employers, sometimes there are promotions, sometimes there are bonuses, things like that. And so today, it's all about promotions and other LMIA violations. So how have things been for you?
Alicia Backman-Beharry 2:34
Alicia, yeah, well, you know, I thought maybe we'd be a little bit of a Grinch coming up to the Christmas season. Because if you don't know this, it can come back and be really, really problematic for you as the employer, but it can also come back and be problematic for the employee. And so I really wanted to revisit the fact that often a promotion is an LMIA violation. And I will say that again, because I don't think that people realize it's true. Promotions are often LMIA violations, and so it's really important that people understand, especially just like you said, coming into end of year that you know as an employer, if you have a positive LMIA, and you've got named workers on that LMIA, and they're already working in that job, you can't actually material, materially change the circumstances of their employment without being offside in your employer compliance obligations.
Mark Holthe 3:33
And sometimes people focus on the temporary foreign worker program to the exclusion of the international mobility program. But anytime you are on an employer specific work permit, these things that we're talking about today potentially can impact you. So if we slide over and just you know, by way of introduction, I think most people understand that when you work in Canada on a work permit, there are conditions associated with it, and when employers apply for a Labor Market Impact Assessment or register for their job offer within the international mobility program, there's an expectation that throughout the duration of that work permit that there will not be material changes to the conditions of that permit. And so Alicia maybe, well, let's start right now with, you know, a little bit of an overview over these minor LMIA modifications that employers just love to try to make.
Alicia Backman-Beharry 4:28
Yeah, and so ESDC does give some guidance on what are minor LMIA modifications. And so they say, in some cases, well, here, here's actually setting the stage. Sometimes, if you make a modification, it is actually going to be significant enough that you have to submit the employer has to submit an entirely new LMIA application. You have to start from ground zero. You've got to do your advertising and recruiting. You've got to go through the whole thing again, submit a new LMIA, get a new approval, and then have people switch and turn into a new work. Permit in order to change anything. So ESDC says, well, there are some minor LMIA modifications that maybe don't need to be reported, but they are very few, and so the examples that they give for minor LMIA modifications are minor job changes that don't change the Knock Code, so something that's very small, but you're still staying within the national occupation occupation classification parameters. And then they talk about the increases in wages. And here's what they say, increases in wages that don't have to be reported are equal to or less than the highest of these three things, 2% the prevailing wage. But there's an asterisk. Or Stats Can consumer price index and the average inflation rate of the previous year and the rate to be used for 2025 is 2.4% so of course, you know two, 2.4 is higher than the two. So if you've got a change, a modification in wage that's within that 2.4% you might be okay, or if the prevailing wage went up. And that brings me to another point. Is on the November 19, ESDC just changed their rates. So if you take a look at the job bank, the wage rates under the NOx are different as of November 19, so employers also have an obligation to go back and take a look at the prevailing wage and pay employees. What the new prevailing wage is, if it is higher, if it's gone down, they don't pay the lower wage.
Mark Holthe 6:38
All right, so which ones do they have an obligation to report?
Alicia Backman-Beharry 6:45
Yeah, and so this is where if there was an administrative error, or the company has changed their contact information, if the employment relationship has broken down. And so this is one where employers may not realize if an employee quit or has been let go, they definitely need to notify ESDC that they're no longer in their employment, also if they have a leave of absence. So that's important as well, to report change in work location. So this is super important companies, and you know, they don't realize that everything is locked in stone. So often, companies will want to apply for a two year or a three year term on that LMIA so that the worker can get a two or three year work permit. Well, that's not always advantageous if the company wants to promote or move that employee within different locations within its offices, or if it wants to change the activities that that employee is going to do. So if there's a change in work location, but no change in the work activities or the employer, then they still do need to report it. So this is where make sure that you are reporting this to ESDC and then specifically for GTs, if we're looking at a global talent stream LMIA, then as long as the work location is the same, remain at or above the prevailing wage in this in the new economic region as it was before. But they still need to report,
Mark Holthe 8:17
yeah, and this is one of the frustrating things to Alicia, because if you look here, they give specific instructions on reach out to the employer contact center to report changes, and then they say the employer is responsible for determining whether a modification is considered minor or material. The call center agents can't advise you. And I'm like, Well, how fair is that? Like, if you have an employer who's trying to do things right. It's, it's like they are setting employers up for failure, and they're just waiting for them to trip up so that then they can either bar them from the program or, you know, in the most serious situations, or levy fines, which they just love to do. So we're in a different world now than we were 10 years ago, and they are actively looking, not just as we've seen things change through the immigration department, but when it comes through ESDC and and even within the international mobility program, they're actively searching for ways to catch employers and when they specifically are not giving advice you can't go, like to CRA and request a ruling. You know, you can't go in advance which, which makes it really, really challenging. So unfortunately, the rule of thumb, and the rule that we always go by with our employers, is just don't change. So don't take the chance if you feel like you absolutely have to, well then, okay, let's reason through this together. Reach out, we'll talk about it, make determinations, and if we feel like there are changes that need to be reported, then, then, you know, we'll obviously always be proactive with it. Then, you know, waiting for them to do an audit later, or hoping they are not going to audit on it.
Alicia Backman-Beharry 9:56
Yeah, and that's exactly right. Mark, the thing that we tell them. Employers is reach out to us before you make any changes. So go talk to your immigration business Immigration Council right away before you do anything. So treat it like every single term in that work permit and the LMIA, or, as you said, the employer portal offer in terms of job title, job duties, the knock, the location of work, the salary, the benefits, the hours, treat it like it is set in stone and you cannot change it, and then flag that with your HR so that they know that everything there is completely paralyzed until you maybe talk to your immigration lawyer. Maybe you have to go back and get a new LMIA. Maybe you have to notify ESDC of minor modifications, but that all has to be assessed prior to the change.
Mark Holthe 10:48
Yeah, and that's, that's a good point, Alicia, so what we've been talking about right now are minor LMIA modifications, or modifications to the terms and conditions of employment that may or may not trigger a need to notify IRCC. But now what we're talking about, and what we're going to transition to, is material changes, material changes to a positive LMIA that may very well require you to resubmit a new LMIA application. So let's chat a little bit about that.
Alicia Backman-Beharry 11:21
So ideally, people reached out to us well in advance. You've had a chance to talk to your business immigration counsel. You determined, oh, you know, I don't think it is material, or if it was material, they're down the road of applying for a new LMA, but probably, probably they did not realize, and probably you're in the world of maybe there's an employer compliance audit, or maybe somebody files for permanent residence. This is normally where we see it. One of the employees files for permanent residence and they say, Oh yeah, I'm under a closed work permit, and I grew up promoted six months ago, and, you know, here are my new job duties. And right away I say, Uh oh. And we have to go back and talk to the employer. So material modifications, what ESDC says is, here are examples of material changes that do not respect the terms of that initial positive LMIA and the annex and change in occupation or job duties. So you cannot move somebody or change their job, including promotions or demotions. So which would change the Knock Code. So if you promote somebody and it goes from manager to a senior manager, and that actually is going to change the knock, then that is offside change an employer. Of course, you can't swap employees. There are some provisions when you have a buyout of a company, but that's kind of another aside. But generally, you cannot change the employer. Who's the employer of record on the LMIA. But it is also really important for employers to know you can't sub out employees, so you cannot make sure have them go to different work sites or work sites operated by a different employer or an affiliated employer. And even you can't do that, even if the employer of record continues to pay the wages for that worker, any decrease in wages. That's always bad. But also, just like we talked about any increase in wage that is greater than that 2.4% or that increase in the prevailing wage, any change in benefits or non monetary compensation. So this is why we wanted to talk about this before Christmas, because if you have a different benefit or a bonus that was never advertised or disclosed on the LMIA that could be offside, change in hours, change in work location to a different economic region under GTs, or something that would require a change to the LMA stream. And this one can be particularly tricky when the wage rate cut off between low wage and high wage changes, and so this is one to really watch out for when they update the changes to what the cut off is in your province between a low wage and a high wage, LMIA, Anything else that would change the failure to meet the transition plan, if you had a high wage LMIA. So if you had activities under that transition plan that you're not able to meet, or there's going to be a major alteration in what you're doing in your transition plan, that's a major modification which could put you offside, or the educational requirements, which is not one that we see very often.
Mark Holthe 14:41
Yeah, so in those circumstances, it's much more likely that you're going to need to apply for a new Labor Market Impact Assessment. So Alicia, what do you advise employers when they've already gone down this rabbit hole? You know, let's say they've already promoted someone like you've got Employment Standards issues that then come up, or they've. Having them a raise or already issued the bonus. These are all major, major issues that come up that you know, that we deal with quite frequently. But what do you advise an employer in those circumstances?
Alicia Backman-Beharry 15:13
Yeah, so you're going to want to talk to the employee, you're going to want to talk to the employer and come up with some sort of agreement on what to do. And then, of course, there's a discussion with ESDC and probably IRCC, depending on where that person is, whether they're applying for PR. But if you realize that you've been offside, then it's probably important to revert back right away to the terms exactly as they were under that LMIA. And then you're in the world of maybe you go and do a new LMIA, start advertising and recruiting and line it up to actually have to switch to a new work permit. Or you might be in the scenario where, if you know that you're offside and it was a material modification, then you might have to do a voluntary disclosure to ESDC and say, we just did an HR Audit and Review. We just realized that we promoted somebody without authorization. We didn't know about this until now, or, you know, we just realized it right now. We want to bring this to estcs attention as soon as possible and be proactive.
Mark Holthe 16:14
Yeah, and I want to just show those who are watching and those who are listening. There's an interesting statement here that ESTC provides regarding this non compliance and then voluntary disclosure. So one of the one of the things it says here is that you will also need to take corrective action to fix compliance issues which Alicia has talked about. So you want to fix whatever is offside once you tell us, we may inspect so the act of voluntary disclosure can trigger, then a compliance review. And they say here, if we find issues, you may face reduced penalty based on these factors. So essentially, if you voluntarily disclose, they say, Look, we're probably going to be a little kinder with you, because you're being proactive. But some of the factors that they look at, and this is why it's so important to act quickly, not sit on it is how complete your disclosure is. Did you just say a little bit? But really, you have a whole host of other issues at the back that are going on. Whether your business is not already the subject of an inspection. Do you have you already got yourself into trouble and had warnings and, you know, we gave you, we gave you kind of a little bit of a slap on the head last time, you know, but now things are different because you're a repeat offender, the impact on the tempered foreign workers, which is interesting, because obviously, if you're giving a worker a more favorable wage, you're paying them more, that's a different situation than if you're not paying them what you you ultimately what you should have. So they're going to look a lot less favorably on you if you're not paying them what they should be then, versus if you do pay them more, but if you pay them more, like we talked about, you're still subject to the administrative monetary penalties those you know. You're still you're still subject to to receiving some form of a penalty, and then they talk about the impact on the Canadian labor market, the timeliness of the disclosure, how many times you've used voluntary disclosure in the past, and then how you fix the issue and make sure it doesn't happen again. So you're basically coming forward, you're repenting, promising you'll never do it again, and seeking forgiveness and and then obviously, the type of conditions that you failed to comply are taken into consideration. And the the funniest of all here is, once again, the employer contact center here, where you can call which basically they have no ability to answer your questions anyway.
Alicia Backman-Beharry 18:40
So interesting, yeah, yeah. And Mark, just like you said, yes, they look at, have you had a compliance audit that was not favorable in the past? And they also look at, just like you said, whether it's ongoing right now, and the timeliness of that voluntary disclosure, so if they've already triggered an employer compliance review, and then you're like, oh, wait a minute, I have this voluntary disclosure that's not going to help you too much. So you actually have to get ahead of it. You have to be the one to disclose it before they start to do the investigation. Yeah. But the reason, and people say, Well, why is this like, this is silly. Why can I not promote my temporary foreign worker? And the reason is because of the impact on the Canadian labor market. So if an employer hires in a foreign national and they're paying them a set wage, and they've advertised and recruited and they can't find Canadians at that wage, ESDC is saying, well, it's not fair, then for that worker, after having been there for a year, to get an increase in their wages or salary or a bonus, even, because you really have to go back to the Canadian labor market and re advertise at that higher wage or with that bonus structure, because now you might get a Canadian so this is the rationale behind it.
Mark Holthe 19:55
Yeah. Well, let's wrap up here with probably what everybody wants. Wants to hear, what are the consequences? So what if I do this? What's the big deal? And I think first and foremost, with all of these, you know, findings of non compliance is that it's something that is, it's a public facing reality. So when you're in a when you're a company, and you've been found non compliant. There's also this public shaming that goes on, and the government has this website for employers who have been found non compliant. And the level of non compliance can vary significantly, but ultimately, your your company's name is on this list, and it might have been something minor, but it's, it's a reputational thing as much as it is a financial thing. So you can go through the list here, you know, alphabetically. And they have all of these different companies in there, just to give you some idea here, you know, this is just recently, like, if we look, you know, we've, we've got, just as of, you know, within the last two weeks they go most recent. We can kind of search it by date of final decision. But just in this last month alone, we've got 1234567899,
Mark Holthe 21:16
in, you know, we're in the month of November alone. That is shown up here, and then for October, like it just, yeah, there's, there's a ton. So clearly, they update it a couple times a month, but there's been a lot of action on the on the compliance side.
Alicia Backman-Beharry 21:32
And one of the things, but that people have to fill out usually when they're doing their PNP applications or when they're looking at their Federal Express Entry profile, and they're saying that they have a job offer. One of the questions is, is that employer on the non compliant list? And people don't usually actually realize what that is, but this is what it is. So before you can actually as an employee, fill out your PNP application, or if you want to rely on a job offer in terms of points or so selection grid factor points for FSW application, or if you want to be looking at that strategically on your Express Entry application, so that you don't have to pay settlement funds or something like that. Or show settlement funds if you claim a job offer, make sure your employer is not on this non compliant list. Go and search and make sure that they're not there.
Mark Holthe 22:21
Yes, and this is just an example. I just pulled up searched my city, poor Ricky's all day grill here, got themselves into trouble. But not only did they get themselves into trouble, but they have found themselves ineligible because they never paid the monetary penalty when it was levied against them. So yeah, you need to treat this super serious and and just Yeah, as a company, the the one thing I guess, Alicia that I want to really drill into to companies is that you and all of your competitors have to do this. And if you're a company who does things the right way, eventually you are going to rise to the top. Immigration has taken on this enforcement in a way that they've never done before for a number of reasons, public shaming themselves for for how the temporary foreign worker program has been managed has you know, it's been in the news, and there's nothing that gets the action of a government and and the party that's leading the country, then an embarrassing story or something that can harm the chances of getting elected again. And so this is very squarely on the radar of immigration. If you have not yet had an inspection as an employer, understand it will come. And there was a period of time where they were a little bit soft, and then they got burned. They were a little soft on the initial vetting of applications, and so there was a little bit of fraud that crept in, which was a real embarrassment to the department. And so they are very squarely on board with this, and all the monetary penalties those funds go into the coffers to help with enforcement. The $1,000 processing fee that you pay now is being more than ever before, reallocated to where it should be for firm for compliance and reviewing whether or not employers are doing what they're supposed to do. So it's never before has there been a time where employers need to take this more seriously.
Alicia Backman-Beharry 24:20
Yeah, and understand, in addition to the negative consequences for the employer, ESDC can cancel the work permit, they can cancel the LMIA or IRCC can cancel the work permit. ESDC can cancel the LMIA, just like you said, Mark, there are certain violations. So when you look at that, the naughty list, to keep with the Christmas theme, if you take a look at the violations, it has each of the codes, six, five, whatever it is, and you can scroll down on the hyperlinks, and at the bottom it says, these are all the sections of the regulations that the employer failed to comply with, and these are all the provisions that they were found to have been non compliant with. So there are a number of them. There are 29 Different things that ESDC completes their inspections on, and these are the common violations. So take a look at these. It can result in the employer actually completely being barred from various programs, and it has really serious consequences for the employee, because when the employee is going to apply for their next work permit or for permanent residence, if there's anything that is different from exactly the terms that were inputted in that LMIA, and also, if it was an employer specific work permit under the imp that is something that is potentially a very real problem.
Mark Holthe 25:39
It looks like we're up to 30 here they've got listed now, a big, lengthy list. So there you have it. Alicia and I are playing the Grinch here for Christmas, if you are an employer who is contemplating whether or not you can give a wonderful Christmas gift or a bonus and the impact it could have on these employer specific work permits. Now remember, if you are employing a post grad work permit holder or someone on an open work permit, generally speaking, these conditions and these employer compliance things we're talking about don't don't apply. It's really related to the underlying job offer that was registered for the imp program, or the actual LMIA terms and conditions that were agreed on when that that LMIA was originally issued. So that's what we're talking about. But it's, hmm, yeah, when you're trying to do things right, you're trying to, I guess we say no good deed goes unpunished, and so be aware of that. All right. Thanks so much everyone for joining us. Thanks, Alicia, and we'll see you again on another episode of the Canadian immigration podcast.
Speaker 1 26:48
Thank you for listening to the Canadian immigration podcast, your trusted source for information on Canadian immigration law, policy and practice. If you would like to book a legal consultation, please visit www dot Holthe law.com you can also find lots more helpful information on our Canadian immigration Institute YouTube channel, where you can join mark on one of his many Canadian immigration live Q and A's. See you soon, and all the best as you navigate this crazy world we call Canadian immigration. I.
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