Canada’s Work Permit LMIA Updates – Everything You Need to Know for 2024 As A Canadian Employer
If you’re a Canadian employer or a foreign worker planning to work in Canada, staying updated on the latest changes to the Labour Market Impact Assessment (LMIA) is crucial. The new regulations, effective from May 2024, aim to balance job opportunities for Canadians while still meeting the labour demands through foreign workers. This blog post will break down the changes, explain what an LMIA is, and provide insights on how these updates could impact you.
What is an LMIA?
An LMIA, or Labour Market Impact Assessment, is a document that Canadian employers need to obtain before hiring a foreign worker. Issued by Employment and Social Development Canada (ESDC), a positive LMIA confirms that there is a need for a foreign worker to fill the job and that no Canadian worker is available to do the job. This assessment ensures that hiring the foreign worker will not negatively impact the Canadian labor market.
Why the Changes?
The Canadian government introduced these changes due to shifts in the job market. With unemployment rates rising and job vacancies no longer at record highs, the government needed to ensure that the TFWP is being used appropriately. In March 2024, the unemployment rate was 6.1%, up by 0.3% from the previous month. These adjustments aim to prioritize Canadian workers while still allowing employers to meet their staffing needs when no qualified Canadians are available.
Key Changes Effective May 1, 2024
To adapt to the changing job market, several key updates have been made to the TFWP. Here’s a breakdown of the most significant changes:
LMIA Validity Period Reduced
Previously, LMIAs were valid for 12 months, giving employers ample time to hire foreign workers and apply for work permits. However, starting May 1, 2024, the validity period has been reduced to 6 months. This means employers will need to act more quickly to secure foreign workers and must be more efficient in their hiring processes. This change may also encourage employers to prioritize finding Canadian workers before looking abroad.
Workforce Percentage for Low Wage Stream
Another notable change affects the low wage stream. Most industries must now reduce the percentage of their workforce hired under this stream from 30% to 20%. However, this reduction does not apply to the construction and healthcare industries, recognizing their ongoing need for additional labor support. This adjustment aims to ensure that low-wage positions are filled by Canadians whenever possible.
Hiring Asylum Seekers
Previously, employers were required to show efforts to hire Canadian citizens or permanent residents before considering foreign workers. Now, employers must also consider hiring asylum seekers who possess valid work permits. This change aims to provide more employment opportunities for asylum seekers, helping them integrate into Canadian society while addressing labor shortages.
Industries Affected by Workforce Solutions Road Map 2022
The Workforce Solutions Road Map, introduced in 2022, continues to impact seven specific industries. These industries must comply with the new rules and percentages outlined in the 2024 updates:
Food Manufacturing (NAICS 311)
Wood Product Manufacturing (NAICS 321)
Furniture and Related Product Manufacturing (NAICS 337)
Accommodation and Food Services (NAICS 72)
Construction (NAICS 23)
Hospitals (NAICS 622)
Nursing and Residential Care Facilities (NAICS 623)
Employer Salary Assessments for Temporary Foreign Workers
Starting January 1, 2024, employers are required to assess and update the salaries of temporary foreign workers annually. This ensures that foreign workers are paid fairly according to current rates for their job and location. By aligning wages with market standards, this change aims to protect foreign workers from exploitation and ensure competitive compensation.
What is the Temporary Foreign Worker Program (TFWP)?
The TFWP allows Canadian employers to hire foreign workers when no qualified Canadians are available for the job. It ensures that the hiring process is fair and that the needs of the Canadian labor market are met. The program includes several streams, such as the high-wage and low-wage streams, each with specific requirements and conditions.
Current Job Openings in Canada
In January 2024, there were 632,100 job vacancies in Canada, a significant drop from the record high of 983,600 job vacancies in the second quarter of 2022. This decline highlights the changing dynamics of the labor market and underscores the importance of using the TFWP judiciously to address genuine labor shortages.
Adapting to the New Changes
Employers must adapt to these new rules to hire foreign workers effectively. Here are some practical tips for navigating the updated TFWP:
Stay Informed
Regularly check the ESDC website and other official resources for updates on the TFWP and LMIA process. Staying informed will help you anticipate changes and adjust your hiring strategies accordingly.
Plan Ahead
With the reduced LMIA validity period, it's essential to plan your hiring processes carefully. Ensure that you have all necessary documentation ready and that you act promptly to secure your desired foreign workers within the six-month window.
Consider All Candidates
Expand your hiring pool by considering asylum seekers with valid work permits. This not only helps address labour shortages but also supports the integration of asylum seekers into Canadian society.
Conduct Annual Salary Reviews
Ensure compliance with the new salary assessment requirements by conducting annual reviews of foreign worker wages. Aligning salaries with market standards will help attract and retain skilled workers while maintaining fair compensation practices.
Looking to provide your foreign workers with the necessary healthcare coverage?
Click through the video below to learn about the FWCHP.
