LMIA stands for Labour Market Impact Assessment. It is used to assess the probable impact of hiring a temporary foreign worker on the Canadian job market.
In most cases, Canadian employers must seek government approval before they can hire a foreign worker. This is to assure that no Canadian workers are available to fill the required position thus allowing the hiring of foreign workers. The employer must submit a LMIA application which is sent to Employment and Social Development Canada. If the LMIA is positive, the employer can notify the applicant who may then apply for a work permit. The validity of the LMIA matches the time period of the work permit. This means that if the applicant would like to extend their work permit, they will also have to obtain a new LMIA.
Employers must advertise all job vacancies across the Canadian job market for at least four weeks before they apply for a LMIA. They are required to prove that they have used at least two other recruitment methods in addition to having posted an advertisement on the Canada Job Bank. Employers will then provide information such as how many Canadians applied for the job, as well as why they were not suitable candidates for hiring.
The LMIA process is different depending on whether the targeted employee is classified as “high-wage” or “low-wage”. Temporary foreign workers being paid under the provincial/territorial median wage are considered low-wage, while those being paid at or above the median wage are considered high-wage. There are also jobs which are exempt from requiring a LMIA.
High-Wage Workers
Employers who wish to hire high-wage workers must also submit transition plans with their LMIA application. This is to prove that they are taking steps to reduce their reliance on temporary foreign workers over time. Some examples of proof are investment in skills training and hiring Canadian apprentices. The transition plans also assure that employers are fulfilling the purpose of the Temporary Foreign Worker Program (TFWP). They must only use the TFWP as a last resort to fill immediate labour needs on a temporary basis when Canadians are not available to fill the position. Priority is always given to Canadians whenever there are available jobs.
Low-Wage Workers
Employers who wish to hire low-wage workers are not required to submit transition plans with their LMIA application. However, they must follow a certain set of guidelines. The Canadian government has placed a cap on the number of temporary foreign workers that a business can employ. This is to ensure that Canadians or permanent residents are given priority for available jobs. As of April 30th, 2022 and until further notice, the cap limit is 20% on the proportion of temporary foreign workers to Canadians or permanent residents. Employers offering a wage that is below the provincial/territorial median hourly wage must:
- Pay for round-trip transportation for the temporary foreign worker
- Ensure affordable housing is available
- Pay for private health insurance until workers are eligible for provincial health coverage
- Register the temporary foreign worker with the provincial/territorial workplace safety board
- Provide an employer-employee contract