Employment and Social Development Canada (ESDC) quietly updated its Labour Market Impact Assessment (LMIA) guidance on September 18, and the changes took effect nationwide this week. The new rules spell out, for the first time, how Service Canada officers will decide who the ‘real’ employer is when a company applies to hire a Temporary Foreign Worker (TFW). Staffing and employment agencies that place workers at third-party worksites are now explicitly barred from obtaining LMIAs, and companies that treat foreign workers as independent contractors risk refusal or compliance penalties. Under the revised policy, officers can look beyond the applicant’s name to determine who sets hours, pays wages, benefits from the labour and has authority to dismiss the worker. If that entity is different from the one on the LMIA form, the application can be refused. ESDC says the goal is to ensure foreign nationals receive statutory protections and that employers can be held accountable for payroll deductions, health-and-safety standards and Employment Insurance premiums. The crackdown is particularly significant for sectors that rely on labour-supply chains—trucking, agriculture and food processing—where misclassification and subcontracting are common. Businesses that previously routed foreign workers through related companies or payroll intermediaries must now demonstrate a bona-fide employer-employee relationship, complete with signed contracts and direct wage payments. Failure to comply could trigger Administrative Monetary Penalties of up to C$1 million and a two-year ban from the Temporary Foreign Worker Program. For global mobility teams, the immediate action item is to review all ongoing and planned LMIA filings to verify that the named employer matches the entity exercising day-to-day control. Companies using staffing firms for recruitment should renegotiate service agreements so that the end-user employer, not the agency, submits the LMIA. HR should also audit contractor arrangements to make sure no TFWs are paid on a 1099-style basis—a practice that now guarantees refusal. Although the guidance does not change underlying legislation, it radically alters operational risk. Legal advisers expect higher scrutiny of Global Talent Stream applications and more on-site inspections. Mobility managers should prepare training for hiring managers and update internal checklists well ahead of the busy Q4 recruiting cycle.
Source: Immigration.ca
