Background
The Temporary Foreign Worker Program (TFWP) includes an emphasis on compliance and enforcement. Inspections of 25% of workplaces that employ foreign nationals are subject to compliance reviews and inspections. The compliance reviews and inspections include not only employers of foreign nationals under the TFWP, but also the International Mobility Program (IMP) which includes intra-company transfers and certain free-trade agreement work permit categories (e.g., USMCA).
Administrative Monetary Penalties (AMPs) will increase risk exposure for any workplace that employs foreign nationals. AMPs are an increasingly common regulatory compliance mechanism that permit a regulatory body to impose monetary penalties for incidences of non-compliance, often without the benefit of a proceeding.
The Administrative Monetary Penalty Regime
The AMP regime is designed to promote compliance with TFWP and IMP requirements. Penalties may be imposed for a range of violations, including non-compliance with record keeping requirements and failure to adhere to conditions laid out in a Labour Market Impact Assessment (LMIA) approval or offer of employment (including payment of certain wages, and to provide certain working conditions).
Where an employer fails to comply with multiple conditions or program requirements, each failure will be treated as a separate violation. As such, penalties under the AMP regime are cumulative, up to a maximum of $1 million. The penalty regime uses a point system to determine the size of the penalty, taking into account a number of factors, including the size of the employer, previous incidences of non-compliance and the degree to which the employer benefited from the violation. In addition to monetary penalties, employers may also be barred from hiring foreign workers and have the details of their violations published on a website.
Violations may be identified during routine compliance reviews, which encompass previous LMIA applications and are generally triggered by new applications for LMIA approval or during inspections. Those inspections may be conducted on-site, without a warrant, and inspectors are granted broad powers to interview employees and compel the production of payroll records and other documents. Such inspections are already underway and the Employment and Social Development Canada (ESDC) has set an inspection target of 25% of workplaces employing foreign nationals in 2015.
After a preliminary finding is made, an employer has 30 days to respond. Employers may invoke certain justifications –such as good faith errors and administrative failure in their response. Once a final determination has been issued, an employer will not be able to apply for new LMIAs or support new work permit applications until the penalty has been paid or a payment agreement has been reached. Employers wishing to challenge a final determination by ESDC must seek leave to apply for judicial review in Federal Court.
Who Is Affected?
Any employer of foreign nationals is affected. Both LMIA-based and LMIA-exempt work permits, including NAFTA work permits and intra-company transfers may be subject to compliance reviews, inspection and enforcement action by ESDC.
Tag-along Risk Concerns
Inspectors who, in the course of their inspection, identify violations of other statutes and regulations, such as human rights and employment standards legislation are permitted to share these findings with the relevant regulatory authorities. Immigration inspections may be conducted without a warrant and may compel the production of any document required to ascertain compliance with program requirements. As a result, immigration inspections may expose employers to significant tag-along risk with respect to other statutes and regulations.
Employers of foreign nationals should ensure that they are compliant with not only program requirements and any conditions set out in LMIA approvals, but also all other relevant employment, human rights, and other legislation.