Stephen Green

Partner

Green & Spiegel LLP

390 Bay Street, Suite 2800

Toronto, ON M5H 2Y2

T: 416-862-7880

F: 416-862-1698

Changes to Canada’s Temporary

Foreign Worker Program

1

AGENDA

1. Business Visitors

2. LMO Exempt ICT

3. Labour Market Opinion Work Permits

4. New Reforms to the Temporary Foreign Worker Program (TFWP)

5. Compliance Reviews

6. Practice Tips

7. Possible Upcoming Changes to Intra-Company Transfers (ICT)

2

1. BUSINESS VISITOR

3

Definition

A Business Visitor is a foreign national who enters

Canada to conduct international business

activities. It is crucial that the individual will not

engage in employment that will provide services,

create competition within the Canadian labour

market, or remove opportunities from it, as such

activities require Work Permits.

4

Business Visitor Examples

DO ✔

DON’T X

Buying Canadian goods or services for a foreign

business or government

Buying Canadian goods or services for a

Canadian affiliate/business

Attend meetings, conferences, conventions or

trade fairs

Entering the Canadian labour market, even if only

for a short-term transfer assignment

Providing after-sales service (mainly supervision,

not hands-on labour)

Performing repairs or specialized service not

listed in the original or extended sales agreement,

warranty or service contract;

Performing hands-on installation generally

performed by construction or building trades

Being trained by a Canadian company that has

sold you equipment or services

Performing work in Canada for a Canadian

company pursuant to a contract for

goods/services made with a foreign employer

Attending Board of Directors meetings to

select/appoint chief or govern the organization

Receiving any form of remuneration from the

Canadian company

5

Business Visitor Pre-requisites Visa Requirements • Foreign nationals from countries that require

a Temporary Resident Visa (TRV) will need

to apply for a TRV abroad along with

documents to qualify as a Business Visitor • Notable visa exempt countries include: United

States, United Kingdom, France, Italy and

Spain.

Admissibility Requirements • Security

• Human or International Rights Violations

• Criminality

• Organized Criminality

• Health Grounds

• Financial Reasons

• Misrepresentation

• Non-compliance with IRPA

• Having an inadmissible family member

6

Business Visitor Requirements There must be no intent to enter the Canadian labour market, as in no

gainful employment in Canada;

The activity must be international in scope, a presumption of underlying cross-border business activity;

Primary Source of the worker’s remuneration remains outside Canada;

Principal place of the Worker’s employer is located outside Canada;

Accrual of profits of the foreign employer is located outside Canada;

Documents:

Proof of remuneration outside of Canada

Copies of an after-sales agreement (if applicable)

Letters from the Canadian parent/subsidiary stating the purpose of the visit

Promotional/training materials

Valid travel document (ie. passport) valid for a minimum of 6 months

Return airline ticket

Sufficient funds for visit and return trip

7

Training:

Training of clients limited to a pre-existing contract

Client is seller/purchaser of foreign goods and services to be used within or outside of Canada

Provide or receive training from a Canadian parent or subsidiary of the corporation that employs the Business Visitor outside of Canada

Receive training related to goods and services purchased from a Canadian parent or subsidiary

After-Sale Services

May perform activities that are derived from warranty and after-sales contracts

The after-sales contract must be part of an original sale or lease agreement, and an extension of the original contract

Services must be performed during the validity of the warranty/after-sales contract

Services cannot include hands-on installation

NOTE: After-Sales Services

The contracts should state the categories of service that will be performed by the employee. The employee must bring a copy of the contract with him/her to present to Canadian Immigration officials upon entry to Canada. Although sensitive and confidential information (ie. pricing) may be omitted, the complete service and warranty section of the contract must be with the employee.

8

Specialized knowledge

Relevant post-secondary degree or diploma, license, certification

Required skills and/or advanced knowledge level to perform activity in Canada

Specialized training needed to provide the service and indicates expertise that is beyond hands-on building and construction work

Installation

When a sales contract or purchase order is for a software upgrade to use a product that was previously sold, if the contract states the individual will:

Supervise the installation

Configure or provide training regarding the upgraded software

Third Party

After-sales sections do not apply to service contracts that are created with a third party after the sales or lease contract has been signed, unless the original sales contract states the third party’s name and their services

Lease Agreements

The existence of a sales transaction is a key element of an original cross-border transaction conducted under a lease agreement

9

Additional Factors Remuneration

Business Visitors should typically be remunerated by the foreign employer, and his/her activities should be intended to benefit the foreign employer.

Note: an activity conducted for the benefit of the Canadian entity is still considered work, even if there is no pay or if the payment is from a foreign source

Duration of stay Business Visitors may be permitted to stay in Canada for a few

days to a few weeks.

The Immigration Officer will consider how long the foreign national intends to stay, the activity to be performed, and previous entries to Canada.

Negotiations Where a Canadian company is engaged in contractual

negotiations with a client in Canada, any Business Visitors entering Canada must leave prior to the execution of the contract.

10

2. LMO Exempt Intra-Company

Transfers (ICT)

11

Intra-Company Transfers Foreign Workers who are issued Work Permits as Intra-Company

Transferees (either under NAFTA or IRPA) are exempt from having

to obtain an LMO. The wages to be paid to the Foreign Worker

must be similar to Canadian wages for the same occupation.

The Foreign Worker must meet the following criteria:

The Foreign Worker must be currently employed by a multi-

national company and seeking entry to work in a parent,

subsidiary, branch, or affiliate of that enterprise;

The Foreign Worker has been employed continuously (via

payroll or by contract directly with the company), by the

company that plans to transfer him or her, outside Canada in a

similar full-time position (not accumulated part-time) for at least

one year in the three-year period immediately preceding the

date of initial application.

12

Intra-Company Transfers Intra-Company Transferee criteria continued:

The employment must fall under one of the following categories:

Executive : direct management of the organization or a major

component, establishing goals and polices, exercising wide

latitude in discretionary decision-making and receiving only

general supervision board of directors, stockholders or higher

level executives;

Senior Managerial: manages organization or departments,

supervisors and controls the work of other mangers, has authority

to hire and fire and exercises discretion over day-to-day activities;

Specialized Knowledge : involves many years of experience and

advanced level of knowledge which is uncommon in the industry.

Their role must be critical to the enterprise and can include

proprietary knowledge of systems/services/products.

13

Intra-Company Transferee Specialized Knowledge:

Special knowledge an individual has of a

company’s product or service and its

application in international markets or an

advanced level of knowledge or expertise in

the organization’s processes and procedures.

(Product, process and service can include

research, equipment, techniques,

management, or other interests).

14

Intra-Company Transferees Specialized Knowledge cont’d:

unusual and different from that found in a particular

industry. The knowledge need not be proprietary or

unique but uncommon. As a general guide, special

knowledge may involve a person’s familiarity with a

product or service which their company makes.

Advanced knowledge is complex - again, not

necessarily unique or known only by a few individuals

(proprietary), but advanced. An assessment of

whether such knowledge exists in Canada is not

relevant as the test is whether the applicant

possesses such knowledge.

15

Intra-Company Transfers Intra-Company Transferee criteria continued:

The Foreign Worker must be transferring to an enterprise that

has a qualifying relationship with the enterprise in which he or

she is currently employed, and will be undertaking employment

at a legitimate and continuing establishment of that company

(where 18-24 months can be used as a reasonable minimum

guideline);

They must only be coming to Canada for a temporary period;

They must comply with all immigration requirements for

temporary entry (ie. admissibility).

16

3. Labour Market Opinion

Work Permits

17

Labour Market Opinion-based Work

Permits

In most cases, an employer needs to apply for a

Labour Market Opinion (LMO) from Service

Canada before an employee may apply for a

Work Permit.

The LMO is a labour certification process which

involves demonstrating that local recruitment has

been unsuccessful and there is a need to hire

foreign workers.

18

Recruitment and Applying for a LMO

The recruitment process may differ depending on

whether the position falls under NOC 0, A, or B, or

under low skilled workers

19

Recruitment and Applying for a LMO

(NOC 0, A and B)

Employers can choose one or more recruitment

methods consistent with the normal practice of

the occupation, among the following:

Advertisement on recognized Internet employment

sites such as Monster, Workopolis

On the website of a professional association

In national newspapers, professional journals or

newsletters

20

Recruitment and Applying for a LMO

(NOC 0, A and B) The advertisement must include:

Company operating name

Wage/salary or salary range

Location of work

Nature of the position and contract duration length

Job duties

Skills/Requirements

After 4 weeks of advertising on 3 separate recognized

mediums, if the employer cannot find a suitable candidate

who is a Canadian citizen or permanent resident, the

employer may apply for an LMO.

21

Reforms to the Temporary Foreign Worker Program - Recruitment

More stringent advertising and recruitment requirements were

implemented in April 2013; Employers are required to make greater

efforts to hire Canadians before they will be eligible to hire TFWs:

Employers must advertise positions for at least four weeks before

applying for an LMO (this requirement applies to all advertising methods);

Employers must advertise in 3 separate sources. In addition to advertising

on the national Job Bank website (or the equivalent provincial websites),

employers must prove they have used at least two other recruitment

methods;

If hiring for a higher-skilled occupation – one method must be national in

scope;

If hiring for a lower-skilled occupation – employers must demonstrate that

they made efforts to target under-represented groups in the work force;

Employers must show ongoing recruitment efforts until an LMO has been

issued. Employers must re-institute all recruitment advertisements to

show an ongoing recruitment effort of 3 types of recruitment;

22

Labour Market Opinions - Additional Employer Information Form

As of April 2013, Employers are also required to provide additional

information on the impact of temporary foreign workers on the Canadian

labour market, based on available labour market information for the

region and occupation. A negative LMO will be issued if an assessment

indicates hiring a TFW will have a negative impact on the Canadian

labour market through layoffs, offshoring, or outsourcing.

23

Additional Employer Information Form

Labour Market Impact Questionnaire

Definitions Offshoring describes the relocation by a company of a

business process from one country to another – typically an operational process, such as manufacturing, or supporting processes, such as accounting or IT services. More recently, offshoring has been associated primarily with technical and administrative services supporting domestic and global operations from outside the home country, by means of internal (captive) or external (outsourcing) delivery models.

Outsourcing describes the contracting out of an internal business process to a foreign or domestic third-party organization.

Lay-offs describes the temporary suspension or permanent termination of employment of an employee or a group of employees for business reasons.

24

Additional Employer Information Form cont’d

25

• Based on the proposed definition of ‘offshoring’, the

employers are asked to declare whether the job offer

related to a contract/subcontract will facilitate

offshoring.

• Employers are now required to provide a summary of

contractual agreements between the employer and

the company receiving goods and/or services.

• Employers are also required to provide details of

positive/negative impacts on Canadians/permanent

residents within company receiving goods/services

over the next 2 years as a result of hiring foreign

workers.

• Employers are also being asked to account for the

hiring of any foreign workers through work permit

exempt or LMO-Exempt processing streams.

Service Canada will look at several factors in

the LMO application, such as: Whether the job offer is genuine;

Whether there is a need for the foreign worker in the

local labour market, and whether the foreign worker will

have a neutral or positive effect on the labour market;

Whether the employer has demonstrated that the

employee will be paid the prevailing wage.

Whether the employer is in compliance with

employment standards (including with other foreign

nationals previously recruited)

Labour Market Opinion Assessment

26

Note: Under the new procedure, the genuineness of the job offer will be examined. Immigration officers will now assess whether a job is “genuine” on an expanded parameter.

They will examine: The employer’s past compliance with employment and

recruitment laws Whether the employer can reasonably meet the terms of

the job offer Whether the employer is “actively engaged” in the

business; and Whether the job offer is congruent with the employer’s

reasonable employment needs and is consistent with the type of business the employer is engaged in.

Labour Market Opinion

27

4. New Reforms to the

Temporary Foreign Worker

Program (TFWP)

28

In April 2013 and July 2013, the federal government

introduced legislative, regulatory and administrative

changes to the process for hiring temporary foreign

workers. These changes have had an impact on LMO

processing.

Key changes include: Additional information required from employers (discussed in slides 24-26);

Lengthier and broader recruitment requirements (discussed in slide 23);

More limited wage flexibility;

Implementation of measures for LMO revocation; and suspension of Accelerated

LMO processing;

Implementation of processing fees;

New restrictions on non-official languages as job requirements in LMO positions.

New Reforms to the Temporary Foreign Worker Program

29

30

Reforms to the Temporary Foreign Worker Program – Wage Flexibility

In a LMO application, the Temporary Foreign Worker Program reviews the

wages offered by the employer and compares them to wages paid to

Canadians and permanent residents in the same position and geographical

area.

As of April 29, 2013 the federal government introduced legislative,

regulatory and administrative changes requiring employers to pay

temporary foreign workers at the prevailing wage by removing the

existing wage flexibility (i.e. no longer able to pay temporary foreign

worker wages up to 15% below the prevailing wage for a higher-skilled

occupation, and 5% below the prevailing wage for a lower-skilled

occupation, provided they could demonstrate that the wage being paid to a

temporary foreign worker was the same as that being paid to their Canadian

employees in the same job and in the same location);

Reforms to Temporary Foreign

Worker Program – LMO Issuance

and Revocation

Effective as of April 29, 2013, the Accelerated Labour Market Opinion process was temporarily suspended and Employers are now subject to the regular processing;

Authority also provided to suspend and revoke work permits and Labour Market Opinions (LMOs) in certain circumstances: new information becomes available indicating that the entry

of a temporary foreign worker would have a negative impact on the labour market or if it is determined that the LMO or work permit was fraudulently obtained.

Suspending an LMO would stop the issuance of work permits. In cases where an LMO is suspended or revoked, CIC will review the work permits that were issued under that LMO on a case-by-case basis to determine whether the work permits should also be revoked.

31

Reforms to the Temporary Foreign Worker Program – Fees and Language Requirements

As of July 31, 2013 the federal government is introducing legislative,

regulatory and administrative changes that will:

Effective immediately, require payment of new processing fees for

Labour Market Opinion processing: Employers applying to hire TFWs

must now pay a processing fee of $275 for each position requested.

Employers hiring workers for on-farm primary agricultural positions

(under NOC codes 8251, 8252, 8253, 8254, 8256, 8431, 8432 and

8611), under Seasonal Agricultural Worker Program, or the Agricultural

Stream are exempted from the fee;

Effective immediately, require a new language assessment: English and

French are the only languages that can be identified as a job

requirement (both in LMO requests and in advertisements by

employers); unless employers can clearly demonstrate in writing another

language is essential and consistent with the regular activities of the job; 32

5. Compliance Reviews

33

Compliance Reviews Under the new regime, ALL employers hiring foreign workers on LMOs are subject to potential employer compliance reviews. There are no appeal rights, and the determinations are final once rendered.

Items that will be subject to review include the following:

Wages and Working Hours: Temporary foreign workers should receive working hours and wages that are substantially the same (STS) as those set out in the LMO confirmation letter and annex.

Job duties: Temporary Foreign Workers should spend the majority of their time performing job duties that are consistent with the occupation specified in the LMO confirmation letter and annex;

Working conditions: Employers should be complying with Canada’s employment and occupational safety standards;

Recruitment: Recruitment and job advertising efforts should be made in accordance with Service Canada’s requirements.

If it appears that employers did not fully respect the terms and conditions of employment set out in the LMO confirmation letters and annexes, the employer will have the opportunity to provide a rationale. HRSDC has indicated that it will accept limited justifications for any non-compliance.

34

Compliance: “Substantially the

Same” What is the “Substantially the Same” (STS) regime?

It is a mandate from CIC and Service Canada in which they determine whether the employer has had Foreign Workers employed in positions that are Substantially the Same (STS) as what was specified in their offers of employment in the two years prior to the opinion request/work permit.

The wages, working conditions, and occupation must be STS. An examination of a variety of documents including T4s, time sheets and payroll records may be used to see if employees actually worked in the jobs and under the conditions intended when the LMO or Work Permit was issued. There are limited reasons of justification that can be used by the employer.

35

Returning employers

All returning employers must demonstrate that they have met the terms and conditions of employment set out in previous LMO confirmation letters and annexes. In addition, some employers may be required to submit documentation to support a more detailed employer compliance review, including any or all of the following documents: Payroll records;

Time sheets;

Job descriptions;

Copies of the employer-employee contract;

Collective agreements;

Temporary foreign worker’s work permit;

Provincial workers compensation clearance letter or other appropriate provincial documentation;

Receipts for private health insurance (if applicable);

Receipts for transportation costs; and

Information about accommodations provided by the employer.

36

Returning employers (cont’d) In some cases, HRSDC will work with the employer to implement the appropriate

corrective action, which may include providing compensation to the temporary foreign

worker. However, employers may be found non-compliant if they refuse to provide a

rationale and/or provide only partial compensation to the temporary foreign worker.

If an employer is found to be non-compliant, it may result in severe consequences for

an employer, including the following:

The employer could be prohibited from obtaining a new Work Permit or a renewal

of a Work Permit for any foreign national for a period of two years.

The employer would be placed on an “ineligible employers list”, which is published

on a website for the public to view.

An employee can risk losing their status by extending or entering into employment

agreements with an ineligible employer.

Due to the information sharing program, an employer could be found to have

violated employment laws and thus, may suffer other consequences that transcend

these immigration issues.

LMOs and Compliance: What are the employer’s liabilities?

If employers are found to not have paid employees wages substantially the same as

those set out on the LMO, they may need to reimburse foreign workers for the

difference in order to maintain compliance.

Due to government information sharing, employers may be subject to sanctions and

penalties from employment regulators for violations of employment laws discovered

during compliance reviews.

37

6. Practice Tips

38

IMPORTANT: In light of the implementation of Bill C-35 (“The Cracking Down on Crooked Consultants Act”), Citizenship and Immigration Canada has commenced the active enforcement of an amendments to the Immigration and Refugee Protection Act (“IRPA”).

Section 91 of the IRPA limits third party representation (or offering of advice for consideration) to lawyers or other members in good standing with provincial law societies or Minister designated bodies.

The implementation of this Bill prohibits employers (through its recruiters and HR personnel) from offering immigration advice, complete application packages and/or liaising with CIC on behalf of international students and faculty.

39

Practice Tips (Cont’d)

Does your company’s HR department have

the resources, mandate and expertise to

implement accounting and human resources

practices that ensure both compliance with

STS and compliance review audits and the

maintenance of records required to

demonstrate compliance?

Does your company’s HR department have

recruitment policies and practices in place that

satisfy Service Canada’s requirements?

40

Practice Tips (Cont’d) In order to ensure compliance, your company will need to ensure:

Mandatory Police and background checks, as the immigration process does not always require such as part of the work permit application process;

Conduct internal reviews of recruitment practices, human resources and accounting policies;

Ensure that proper supporting documentation is kept on file for each foreign worker: Supporting evidence establishing qualifications and paid work

experience; Full disclosure of immigration history and dependent

information. Timesheets and records of all job assignments.

41

Practice Tips (Cont’d)

Review and maintain records concerning the type of

work permit each foreign worker has been issued in

order to ensure:

42

LMO Work Permits • proper recruitment efforts and employment standards;

Intra-Company Transferee

Work Permits

• position, duties, salary and qualifications of the foreign

workers meet the definitions of Executive, Senior Manager

and/or Specialized Knowledge workers;

Open Spousal Work Permits • The principal applicant has a skilled work permit valid for at

least 6 months and is working in a NOC 0,A,B position;

Student or Post-Graduate

Work Permit

• though there are exemptions regarding prevailing wages

and recruitment efforts, the job duties and wages must still

be in line with the foreign worker’s level of qualifications;

NOTE: For LMO and ICT permits: Ensure that the job descriptions on the LMOS

and Work Permit applications properly match the foreign worker’s duties

7. Possible Upcoming Changes

to Intra-Company Transfers (ICT)

43

Possible Upcoming Changes to ICT

Wage indicators for specialized knowledge workers;

Education, training, and experience indicators for specialized knowledge workers;

Extent of specialized knowledge workers within each company;

Third-party work-site concerns for intra-company transferees.

44

390 Bay Street, Suite 2800, Toronto, Ontario M5H 2Y2

Tel: 416-862-7880 Facsimile: 416-862-1698 www.gands.com

45