CANADA: New Wage Review Requirements for Employers of Temporary Foreign Workers
Effective January 1, 2024, employers in Canada who hire through the Temporary Foreign Worker Program (TFWP) will be required to annually review the wages of employees holding Labour Market Impact Assessment (“LMIA”)-based work permits to ensure that the wages paid align with the prevailing wage for the National Occupational Classification (“NOC”) for the region where the employee works. Importantly, employers will be required to complete their wage rate review at the beginning of a foreign worker’s period of employment and by January 1st of each year following the Job Bank wage update. Prevailing wage rates are set by Employment and Social Development Canada (“ESDC”), and are typically updated in November each year. They can be reviewed on ESDC’s Job Bank website, and are categorized by the applicable NOC code and the region of employment.
Should an employee’s wage fall below the prevailing wage, the employer is obligated to raise it to meet or exceed the wage floor. An updated wage may never fall below the wage identified in the positive LMIA at any time during a temporary foreign worker’s employment period, even if the prevailing wage decreases.
Other important updates included in ESDC’s policy regarding the Temporary Foreign Worker Program include:
LMIAs will now have a reduced validity from an 18 month maximum to a 12 month maximum; and
Employers in selected sectors (food manufacturing, wood products manufacturing, furniture, and related products manufacturing, accommodations and food services, construction, hospitals, nursing and residential care facilities) may hire up to 30% of their workforce in low-wage positions through the Temporary Foreign Worker Program.
These changes will remain in effect until August 30, 2024 and may be amended at a later date based on evolving labour market and economic conditions.
What this means for our clients:
This policy only affects employers sponsoring temporary foreign workers who require an LMIA. Employers will not be required to review the wages of foreign workers documented under the International Mobility Program which captures treaty-based work permits.
Employers should revise their internal policies and schedule a wage review no later than January 1st of each year to ensure wage compliance and must keep records of these reviews for future inspections. Importantly, employers should ensure they are searching the most current median wage data from the Job Bank website wage reports when reviewing wages, or submitting new LMIA applications.
Olivia Adamski
Attorney (Licensed in Ontario)
Olivia Adamski is a business immigration attorney focused on helping clients bring talent to Canada. She enjoys assisting individuals and corporations navigate the complex Canadian immigration landscape and all aspects of cross-border planning. Olivia has developed a comprehensive knowledge of Canadian immigration law and has been regularly retained to deal with thorny legal scenarios involving inadmissibility, status and compliance.
Olivia@golawcorp.com.