Labour Market Impact Assessment (LMIA), Explained!

A company looking to hire a foreign worker under the Temporary Foreign Worker Program (TFWP) will need to request LMAI. LMAI is — a program designed to employ foreign nationals and temporarily address labour shortages at times when no qualified Canadians are available to work such positions.

Company will have to submit a proof that there will be no negative impact on Canadian labour workforce because of their hiring a foreign national, which will include:

  • Prove that no qualified Canadians were passed over for the job in favour of a foreign worker
  • Guarantee that the hired foreign worker will be paid a wage and provided benefits that meet federal and provincial standards
  • Prove that they have tried, prior to seeking out a foreign employee, to find a Canadian citizen or permanent resident for the vacant position

Additionally employers will have to advertise a vacant job opportunity for a minimum of four weeks prior to applying for an LMIA. In those four weeks, the employer must also have advertised the position using at least three recruitment methods, one specifically being the Canada Job Bank.

There are two classifications under LMAI; “high wage” or “low wage” employee. The primary difference between these two classifications is the added requirement of a “transition plan,”

LMIAs for high-wage workers

If foreign worker will be paid a rate equal to or above the median provincial/territorial wage, the transition plan is mandatory part of LMAI submission. Transition plans assist with by proving that the TFWP is being utilized in a limited capacity and as a last resort to fill employment gaps temporarily when no other options exist.

LMIAs for low-wage workers

Hiring a foreign national who will be paid under the median wage for a particular province/territory does not necessitate the submission of a transition plan.

There is a cap on foreign workers that a business can employ under this “low-wage” worker category. A company with 10 or more employees can have no more than 20% of their workforce be classified as “low-wage temporary foreign workers”.

Additionally, company hiring a low-wage foreign worker must:

  • Provide an employer-employee contract
  • Pay for the worker’s round-trip transportation
  • Ensure affordable housing is available
  • Pay for private health insurance until workers are eligible for provincial coverage
  • Register the temporary foreign worker with the provincial/territorial workplace safety board

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