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What is a Labor Market Impact Assessment (LMIA)?

An LMIA is a labor market verification process whereby Employment and Social Development Canada (ESDC) assesses an offer of employment to ensure that the employment of a foreign worker will not have a negative impact on the Canadian labor market.  Employers will be required to provide a variety of information about the position for which they want to hire a foreign worker, including the number of Canadians who applied for the position, the number of Canadians who were interviewed, and detailed explanations for why the Canadian workers considered were not hired.

In their analysis of the offer of employment, ESDC will consider the following elements:

1. Is the salary offered to the foreign worker consistent with the average for the occupation in the area the position is located?

2. Are the working conditions consistent with labor laws and/or collective bargaining agreements?

3. Is there a labor shortage for that occupation in the area the position is located?

4. Is there an ongoing labor dispute in the company and/or industry?

5. Has the Canadian employer undertaken recruitment efforts in order to find a Canadian to fill the position?

6. Will the foreign worker be able to transfer unique skills or expertise to Canadians?

7. Will hiring the foreign worker help to create or retain jobs for Canadians?

8. Will the foreign worker be the employee of the Canadian employer, whereby the foreign worker is expected to work on a full-time basis at a pre-determined wage?

Generally speaking, for jobs located in one of Canada’s major cities, the more specialized the position and the higher the salary offered, the higher the chances of obtaining a positive LMIA will be. In less populated cities and regions, this is still true but generally obtaining an LMIA may be easier.

LMIA Based Work Permits:

Typically, foreign workers and employers must go through a two-step process in order to receive a Canadian work permit. First, the applicant must submit an application to ESDC for a Labor Market Impact Assessment, followed by a second application to Citizenship and Immigration Canada (CIC) for the actual work permit. The LMIA is issued by ESDC who, after considering numerous protective labour market factors, authorizes the Canadian employer to hire a foreign worker.

In June 2014, it was announced that work permits for foreign workers who require a LMIA will only be granted for a period of 1 year for all low-wage occupations.

How Long Does it take to Obtain a Labour Market Impact Assessment?

ESDC has committed to a 10 business day service standard for certain LMIA applications.  The 10 day processing will only be available for applications pertaining to jobs in high demand (such as skilled trades), jobs offering wages in the top 10% of wages earned by Canadians in that province or territory, and for jobs with a short duration work period (less than 120 days).

ESDC offices are responsible for processing LMIA applications, and there are ESDC offices exist in every Canadian province.

Requirements for Employers Applying for an LMIA:

Effective as of June 2014, all employers wishing to hire a temporary foreign worker to Canada must pay a processing fee of $1,000 CDN tied to each request for a labour market opinion.  A “privilege fee” of $100 CDN is also required.

English and French must be the only languages that can be distinguished as job requirements both for LMIAs and for job vacancy advertisements unless the employer can prove that another language is otherwise required.

Employers must also advertise all job vacancies in the Canadian job market for at least four weeks before applying for an LMIA and are required to prove that they have used at least two other recruitment methods in addition to having posted an advertisement on the Canadian Job Bank website.  Employers must focus advertising efforts on groups of Canadians who are under-represented, such as Aboriginals or persons with disabilities.

When employers are applying for LMIA for high-wage positions, they are also required to submit a transition plan to ESDC with their LMIA.  The transition plan should indicate how the company plans to reduce their reliance on temporary foreign workers.  Proof of investment in skills training or hiring Canadian apprentices are examples of how employers can prove they plan to reduce their reliance on temporary foreign workers.  Proof that the employer is assisting their high-skilled temporary foreign worker in becoming a Canadian permanent resident can also qualify as the transition plan.  If the employer is chosen for an inspection or if they apply to renew their LMIA, they will be required to report on the progress of their transition plan.

Employers are required to attest to their awareness that they are prohibited from laying off or cutting the hours of Canadian workers if they employ foreign workers.

Employers should be mindful of a number of criteria that affect whether or not ESDC will process an LMIA application.  Currently, if an employer’s LMIA application meets all of the following criteria, it will not be processed:

• The occupation listed on the LMIA is as defined as a job in Accommodations, Food Service or Retail Sales.  Under the North American Industry Classification System (NAIC), these occupations are classified as NAIC type 72, 44, or 45.

• The occupation listed is categorized as Skill Level D in the National Occupation Classification.

• The economic region where the job is to take place has an annual unemployment rate of over 6%.

 

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