Greater enforcement challenges TFW employers

It’s an impressive range of employers, ranging from convenience stores and food service companies to gas stations and hotels.

And yet the list provided by Ottawa is showing all the employers that are non-compliant when it comes to Canada’s Temporary Foreign Worker Program or International Mobility Program, which Canadian employers to hire foreign workers to fill temporary jobs when qualified Canadians are not available.

Just for 2024, the federal government provides alarming examples when it comes to the penalties:

• Gateway Newsstand in Brampton, Ont. was fined $75,000 and given a five-year ban
• Windsor Hotel in Greenwood, B.C. was fined $152,000 and given a two-year ban
• Ultra Shine Building Maintenance in Edmonton was fined $124,000 and given a five-year ban
• Coast Fresh Farms in B.C. was fined $46,000 and given a five-year ban
• H&R Productions (wedding photographers) in Surrey, B.C. was fined $45,000 and given a five-year ban

So, what did they do wrong? Again, the government provides a range of abuses, such as:

• The pay or working conditions didn't match, or were not better than, what was listed on the offer of employment, or the job was not the same as what was listed on the offer of employment.
• The employer didn’t provide the foreign national with information on their rights in Canada, in their chosen official language, on or before their first day of work
• The employer didn't put in enough effort to make sure the workplace was free of physical, sexual, psychological or financial abuse or reprisal.
• The employer didn't show up for a meeting with the inspector, to answer questions and give documents that were asked for.

Greater enforcement, penalties around TFWP

These recent cases of abuse come amidst boosted enforcement methods from Ottawa. The government has invested $48 million over two years, starting in 2023-24, to improve employer compliance under the TFW Program through activities that include hiring more program inspectors and maintaining A worker protection tip line. 

In addition, this funding has supported:

• outreach sessions to employer organisations and consulates to help spread awareness of temporary foreign worker rights and employer obligations
• enhanced tools to provide user-friendly mechanisms to report potential misuse of the TFW Program
• the implementation of a process to escalate concerns to appropriate stakeholders within 48 hours in situations where the health and safety of temporary foreign workers are at immediate risk.

Last fiscal year, Employment and Social Development Canada (ESDC) completed 2,122 inspections under the TFW Program. Of these, 94% of employers were found to be compliant but $2.1 million in penalties were issued for non-compliance — an increase of 36% from the prior fiscal year, at $1.54 million.

Additionally, a total of 12 employers were banned from the program, compared to the previous fiscal year, when seven employers were banned.

“There definitely has been initiative on the part of the government to ensure that foreign workers rights are protected, and that they know their rights,” says Bryan Kwan, partner at McLennan Ross in Edmonton, citing a major overhaul in 2015, after scandals involving companies abusing foreign workers, and 2022 amendments to the immigration refugee protection regulations.

More recently, Ottawa is ramping up the inspections, he says, citing an increase in the number of inspections, the hiring of more inspectors, and increasing average fines.

“The number of companies that are now blacklisted has drastically increased.”

Employers who are found to be non-compliant with TFW Program conditions are listed on a public-facing website managed by Immigration, Refugees and Citizenship Canada (IRCC).

In addition, some provinces and territories are bringing in legislation to better protect foreign workers, such as Ontario’s new rules for temporary help agencies.

“This is really meant to catch the bad actors in the Canadian labour market,” says Kwan.

What’s behind the non-compliance?

The more common mistakes that employers make with the program are around record-keeping obligations, he says.

And miscommunication is a bit part of that, says Kwan, between the recruiters, HR and the management and supervisors of the foreign workers.

“The knowledge level varies greatly and there's miscommunications about what has to be asked of the workers and what has to be retained in terms of record-keeping.

“A lot of employers don't appreciate that by participating in the Temporary Foreign Worker program or the International Mobility program, there are restrictions on the compensation package that you can pay; there's restrictions on the ability to promote and demote and change the job description of the foreign worker; and there's also obligations to comply with all applicable federal and provincial labour and employment legislation.”

For example, in the case of an open work permit, there may be restrictions on what an employer can do in terms of changing the job conditions, he says.

“Often, one of the violations that leads to a penalty is when the employer doesn't provide the wage or working conditions that are equal to or better than what they had originally submitted to the government.”

Some companies don't always know about the number of foreign workers on their payroll, says Kwan, which is important so as to track their immigration status.

“That's what we're really trying to encourage employers to do is to build in that sophistication. Because I find that a lot of organizations, it's one person, it's one HR manager that has the historical knowledge of the company's use of the foreign worker program, and the actual knowledge of the applicable immigration rules.

“And then if that person retires or they leave, that company is lost.”

‘Waste of taxpayer dollars’ on good employers

However, there are many employers that are “pretty solid,” says Ravi Jain, founder and principal lawyer at Jain Immigration Law in Toronto, and that’s not where the government’s focus should be.

“You have these regular companies that are bringing in higher skilled workers — they're competently run, they take these kinds of things quite seriously, they have legal counsel in-house, they have a proper HR and everything — so, to drag them through the process, they see a lot of random inspections, it just seems a bit unproductive,” he says.

“It's just unfortunate to spend any time on the really solid employers, it just seems like… a waste of taxpayer dollars.”

Instead, Ottawa should target employers or sectors known for higher abuse, as often seen with those hiring lower-skilled workers, says Jain.

“They should just be a little bit more targeted. And the tip line and then multi languages, all that stuff is good, but the more awareness they can raise, both with employers and the employees, I think the better it'll be,” he says.

“I'd rather see them try to focus on the fraud.”

Problems with LMIAs

Most employers need a Labour Market Impact Assessment (LMIA) before they can hire a temporary foreign worker, but there have been ongoing reports of abuse and misuse when it comes to these applications.

“There's rampant fraud with respect to Labor Market Impact Assessment, and it's been going on for decades,” says Jain.

As an example, he cites the many temporary residents in Canada made up of university students, who are desperate for work, especially after they graduate.

“The issue is that there's enormous pressure if you're not in STEM and if you're not a French speaker, and you're not in healthcare, you're not in a trade, then you don't get what's called a targeted draw under the Express Entry point system,” says Jain.

“So, what do they need to do, what gives them the edge? What gives them another 50 points and their Express Entry profile? A Labour Market Impact Assessment. And how does this relate to fraud? Well, because people are buying them. So, an immigration consultant will go to an employer… and say, ‘Hey, I'll give you 10 grand or 20 grand [to hire this person],’ they'll get 50 grand from the students, and they'll run the scam.”

This is something that the government needs to “wise up to, because it's happening on a widespread basis,” he says.

Challenges with immigration consultants

It's also important for employers to understand the process and what they can and cannot do, says Kwan.

“For instance, employers are not allowed to charge employees or recoup from the employees the cost of their own recruitment,” he says.

“So, when there is an immigration consultant that's been hired, or a third-party representative that's been hired, and the employer doesn't know what they're doing and what they're charging and to who, there is certainly the potential that the employer could get in trouble for not knowingly having charged the employee or had the employee pay for their own recruitment… and this is a big problem in the industry.”

In some parts of Canada, provincial legislation protecting foreign workers might be even broader, says Kwan.

“It's not just a recruitment — there are other limitations on what the employer can charge an employee for, or recoup from the employee, in terms of their immigration status.”

Immigration consultants are not lawyers, says Jain, so “they don't have that much to lose… they don't fear their regulator at all. And they're happy to participate in these scams, many of them.”

Preparing for TFWP inspections

Whether it's an innocent mistake or an administrative one, the government has been quite reasonable in allowing employers to bring themselves into compliance and better educate themselves about how they can improve their processes going forward, he says.

“Often, the non-compliance does stem from the disconnect between the various departments — legal, HR, the actual operating team — within an organization, and the lack of actually having formal policies to educate people about what the rules are with foreign workers and what the right policy or procedure is to follow when you deal with a foreign worker.”

And, when there is a compliance inspection, the inspectors are doing a more thorough job and asking a lot more followup questions, says Kwan.

“It's not unusual for them to make… multiple followup requests for additional documentation or additional information or to request to interview people.”

The government also seems to be making a greater effort to understand the context of violations and the intention of the employer, he says.

“So, when you see a large [employer] fine or ban from utilizing foreign workers, typically that happens in a case where the government has discovered that there was some intentional act on behalf of the employer to do something to violate the rules,” says Kwan.

“And by rules, I mean, not just the immigration rules, but if there's an intentional act to violate labour and employment laws as well — that's when you'll start seeing the fines and the blacklisting.”