Labour Market Impact Assessment (LMIA)
Complete Labour Market Impact Assessment Guide
Are you considering hiring a foreign worker in Canada? Understanding the Labour Market Impact Assessment (LMIA) process is essential. In this guide, we provide an overview of what an LMIA is, the different types of LMIAs, requirements, and how to navigate the application process successfully.
What is a Labour Market Impact Assessment (LMIA)?
LMIA means “Labour Market Impact Assessment”. A LMIA is a process required of an employer in Canada before they can offer a job to a foreign national to hire them on a work permit. It is the employer’s responsibility, not the foreign worker’s responsibility.
The LMIA process is designed to protect Canada’s labour market from entry by foreign workers. Unless the job is exempt from the LMIA process, it is a legal requirement under Canada’s Immigration and Refugee Protection Act for an employer to conduct a LMIA before hiring a foreign worker.
The employer begins a test of Canada’s labour market by publicly advertising the job offer for at least four weeks to Canadian citizens and permanent residents. The employer then submits an LMIA application to the Temporary Foreign Worker Program – a division of Employment and Social Development Canada (ESDC), also known as Service Canada. The application includes detailed information about the position offered, the size of the company, a description of the business and why the business genuinely needs to fill this position.
Applications are queued in order of date of submission and answered by a TFW program officer. A TFW program officer reviews the application and interviews the employer before deciding if hiring a foreign worker will have a positive or negative impact on the Canadian labour market.
A positive impact assessment means the job can be offered to a foreign national who can then apply for a work permit. A negative assessment means the job cannot be offered to a foreign national and no work permit application can be made.
LMIA processing times vary by stream and priority. They can be processed in as little as a few days or take as long as several months, depending on how many others are in the queue waiting to be assessed. An average of 4-8 weeks can be expected, but processing times vary by time of year and stream demand.
LMIA Process for Hiring Foreign Workers:
Why Do Canadian Employers Need an LMIA?
Canadian employers need an LMIA to make a job offer to a foreign worker. It is the responsibility under law of every employer in Canada to first offer a job to Canadian citizens and permanent residents. Employers who are not compliant with this legal requirement can be investigated and punished.
Hiring foreign workers brings specialized skills and labour in short supply to Canada. Only positions experiencing demonstrable acute labour shortages are eligible for a positive LMIA. Foreign workers’ knowledge and experience should impart to existing Canadian workers through teamwork, sharing best practices or mentorship. Foreign workers therefore help increase the skills of your Canadian workforce, helping your business grow.
Different Types of LMIAs in Canada
Understanding which LMIA stream applies to your situation is critical for a successful application. Each stream has specific requirements, processing priorities, and eligibility criteria.
High-Wage LMIA
This type of LMIA is applicable when the offered wage for the position exceeds the provincial or territorial median wage by 20%. Since median wages vary in each province or territory, the “high wage cutoff” varies accordingly.
This stream is typically given higher priority processing than low wage stream applications, but there are exceptions. Employers offering positions that qualify for the high wage LMIA stream can typically request longer employment durations than most other streams. The maximum duration of employment is typically 3 years, though from time to time, the Temporary Foreign Worker program limits this to 2 years.
For some occupations suffering from chronic labour shortages, such as for fee-for-service physicians, approvals can sometimes approve employment durations for as many as 5 years.
Employers seeking high wage LMIA approvals must demonstrate efforts to hire Canadian citizens or permanent residents before considering hiring a foreign worker. Moreover, high wage LMIAs require employers to develop a transition plan outlining efforts to reduce reliance on foreign workers over time.
Failure to demonstrate that you followed through with your transition plan is a common reason for refusal on subsequent high wage LMIA applications. By far the most common reason a high wage stream LMIA application may be refused is failure to provide sufficient evidence to demonstrate genuine efforts to recruit Canadians first.
Low-Wage LMIA
Low-Wage stream LMIAs are for positions with wages below the high wage cutoff, which is currently any wage offered that is below 20% above the provincial or territorial median wage for all occupations.
From time to time, Service Canada will refuse to process low wage stream applications for employment in regions of Canada where the local unemployment rate is at or above 6%. Exceptions to this are listed on the website of Service Canada and generally cover primary agriculture positions, jobs with chronic labour shortages such as those in health care, food manufacturing, and construction, and short duration job offers (usually 120 days or less).
The differences in requirements between the low and high wage streams are considerable. Low wage stream applications require the employer to demonstrate reasonable, affordable accommodations available to the foreign worker in the region of employment, as well as the employer paying for the transportation of the temporary foreign worker to and from Canada.
Furthermore, low-wage stream LMIA applications are also subject to a cap — a limit on the total number of TFWs who the employer may hire, which is expressed as a percentage of the total work force. For small employers with fewer than 19 employees, no more than 1 TFW can typically be hired at any given time. For larger employers, the cap is expressed at no more than 10% of the workforce, meaning they must have at least 20 employees before hiring two or more TFWs.
Another distinguishing feature is the advertising and recruitment requirements. The low wage stream has the added complexity of needing to target underrepresented groups. Employers must also reach out to specific underrepresented groups and specifically target members of those groups. Employers are also required to invite to apply all candidates ranked 2 stars or higher by the national Job Bank matching service.
Global Talent Stream (GTS) LMIA
The Global Talent Stream is a particular type of LMIA for the most in-demand, high skilled occupations, usually associated with innovation, high growth and development. The GTS was introduced as one prong of a broader immigration strategy, called the Global Skills Strategy, to attract the best, brightest and most in-demand workers with skills in high demand to Canada.
It represents an excellent recruitment tool for innovative, high growth companies engaged in industries such as high tech, pharmaceutical, bioscience, biomedical, engineering, cutting edge scientific and medical research, and innovation.
The Temporary Foreign Worker program has split the Global Talent Stream into two categories. Category A includes job offers for unique and specialized positions from employers that are recognized as innovative and high growth by a designated referral partner of the TFW program. Category B involves recruiting a foreign worker to work in an occupation appearing on an in-demand list.
Notably, employers applying for the GTS are not required to demonstrate efforts to recruit or hire Canadians first. This means the GTS LMIA is often the fastest LMIA stream to access since an employer can apply without having to conduct a program-specific advertising and recruitment campaign.
However, employers applying under the GTS are uniquely required to make commitments to the TFW program through a Labour Market Benefits Plan (LMBP). The LMBP part of the GTS LMIA application is a negotiation with the government. Entering this negotiation untrained or without the preparation of a professional GTS LMIA lawyer can result in an employer making commitments that can cost the employer significantly more dollars than necessary, or result in an application refusal.
The TFW target is to process a GTS LMIA application in 10 business days or less.
Seasonal Agricultural Worker Program (SAWP) LMIA
The Seasonal Agricultural Worker Program (SAWP) LMIA stream is specific to the agriculture sector. It is for employers who wish to hire temporary foreign agricultural workers for seasonal positions. Employers must demonstrate a genuine need for foreign workers, and the program has specific requirements and recruitment obligations.
Employers can hire only from participating countries in the western hemisphere, including Anguilla, Antigua and Barbuda, Barbados, Dominica, Grenada, Jamaica, Mexico, Montserrat, St. Kitts-Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago.
The positions are seasonal, meaning no period of work can last longer than 8 months. Furthermore, no work period can overlap the holiday season of December 16-31. The minimum number of hours of work offered for employment must be 240 hours in any 6-week period.
The work must be in on-farm primary agriculture in specific sectors including apiary products, bovine, dairy, fruits and vegetables, grains, poultry, sheep, swine, and others. Agricultural cultivation and farming outside of these select sectors is prohibited under this program.
Caregiver LMIA
An employer who wishes to hire a caregiver may examine their eligibility for a caregiver stream LMIA. However, IRCC has a standing order to refuse to process work permit applications for caregivers based on these LMIAs, with very few exceptions.
The exceptions are that the person is already in Canada and possesses either a current, valid work permit or a current, valid study permit.
Given IRCC’s refusal to process most work permit applications for caregivers based on an LMIA, employers have limited options to hire caregivers. Alternative LMIA-exempt work permit options can be explored, or employers must hire foreign workers through the permanent residency program for caregivers.
Before proceeding with a caregiver LMIA or alternative option for caregivers to obtain a work permit or permanent residency, you should consult with a caregiver immigration lawyer.
LMIA Application Process Overview
Preparing an LMIA application is a complex process involving multiple steps:
- Determine LMIA type needed – Position assessment, NOC identification, wage determination
- Complete recruitment efforts – 4+ weeks advertising, Job Bank matching, candidate interviews
- Prepare required documents – Business records, financial statements, recruitment documentation
- Submit application to ESDC
- Wait for processing – Attend TFW officer interview
- Receive decision
- Foreign worker applies for work permit (if approved)
Each step represents a potential refusal point and requires careful attention to program requirements, provincial employment laws, and human rights legislation. A single missed step or mistake can mean starting the process over, costing you time and money.
LMIA Requirements and Documents
Every LMIA application requires demonstrating:
Business legitimacy: To qualify as a legitimate business, your business must be legally established in Canada and “doing business” in the sense of being engaged in the supply of ongoing and regular legal goods or services in Canada. Some provinces also require registration before you can apply for an LMIA.
Financial capacity: Your business must demonstrate that it can pay the wages offered to the foreign national throughout the duration of the employment period. New businesses without a long history of financial reporting may find this difficult. Businesses showing losses or marginal profits may not meet financial capacity requirements.
Compliance history: Businesses returning to the temporary foreign worker program must have a demonstrated history of having paid wages and offered working conditions to foreign workers they employed. They must demonstrate a workplace environment free from abuse.
Recruitment efforts: Most LMIA streams require comprehensive recruitment efforts. Low wage and high wage stream LMIA applications require all employers to engage in 4 weeks of broad-based, public advertising on the position.
The specific documentation required varies by stream, occupation, and province. Missing even one required document can result in processing delays or refusal.
LMIA Processing Times and Fees
Processing times vary significantly by stream and can be understood in terms of priority levels:
Highest priority processing: 10 business days or less – Global Talent Stream LMIA applications, certain occupations identified as having critical and chronic labour shortages, and industries where the national interest of Canada is directly impacted.
Moderate priority processing: 4-12 weeks – LMIA applications for occupations generally experiencing labour shortages nationally and where the region of employment has a general unemployment rate below 6%.
Lowest priority processing: 8-20+ weeks – LMIA applications for occupations received frequently by the Temporary Foreign Worker Program for employment in regions where unemployment is at or above 6%.
Refusal to process: Low wage stream LMIA applications may not be considered at all if the regional unemployment rate is at or above 6%. Caregiver LMIA approvals may be worthless if IRCC refuses to process the work permit application.
Application fee: In every case, an employer must pay the $1,000 CAD LMIA application fee. For large group applications of the same occupation or for some industries, a fee cap exists. Moreover, often overlooked are the fees charged by IRCC when applying for a work permit – $155 CAD for each worker, plus additional fees for biometrics ($85 CAD) where required.
Under no circumstances may an employer charge a foreign worker, deduct from wages, or otherwise attempt to recover any application fee. Employers are also prohibited from charging a recruitment fee to a foreign national. There is no leniency on this rule, and violators may be subject to steep fines or criminal penalties.
Common LMIA Rejection Reasons
There are more ways to be refused an LMIA than approved. Your LMIA application must be flawless to be approved and can suffer from only one mistake or deficiency to be refused.
Common rejection reasons include:
- Insufficient recruitment efforts
- Wage offered below median requirements
- Incomplete documentation
- Business legitimacy concerns
- Failure to demonstrate genuine labour shortage
- Incorrect NOC code identification
- Non-compliance with advertising requirements
- Failure to invite qualified Job Bank candidates
- Failure to continuously advertise until decision
- Failure to comply with collective agreement requirements
Employers may also experience strategic failures, such as applying for an LMIA for a defunct stream with no meaningful pathway to a work permit. Examples include the caregiver LMIA stream for which an IRCC refusal to process exists for almost all work permit applications.
Given the complexity of LMIA applications, the different provincial, territorial or federal laws involved at each step, and the consequences for a single mistake, professional legal assistance is highly recommended.
How Mandelbaum Immigration Lawyers Can Help with Your LMIA
Are you planning to navigate the complexities of the Labour Market Impact Assessment (LMIA) process? Don’t take chances with your application. Our law firm has experience and expertise in LMIA applications and associated Canadian laws.
With our personalized approach, we will guide you through the entire process, ensuring precision and compliance, maximizing your chances of a positive outcome. Our experienced lawyers will handle all aspects of your LMIA application, from position assessment, to guiding you on advertising and recruitment, to document preparation to communication with Service Canada.
A single missed step or mistake can mean starting the process over, costing you time and money. Our comprehensive end-to-end LMIA services provide you with peace of mind and save you valuable time. A well-prepared and organized LMIA application can result in faster processing.
Our firm has assisted both small and large employers, including sole proprietorships and multinational corporations, with their LMIA applications. Clients benefiting from our expertise include high-tech, business services, medical clinics and healthcare facilities, primary agriculture and resource extraction, restaurants and culinary services, religious and non-profit organizations, and many more.
Our success stories include foreign software engineers with job offers from technical services firms, senior executives hired to grow recently acquired business enterprises, foreign trained doctors coming to Canada to join medical clinics, chefs and cooks for local restaurants, biomedical researchers for innovative labs, and many more.
Secure the necessary permits to hire qualified foreign workers with confidence. Contact our law firm today for a consultation and let us help you navigate the LMIA process seamlessly, allowing you to focus on your business while we handle the legal complexities.
Mandelbaum Immigration Lawyers can conduct an LMIA assessment for you. Simply provide us with your name, email address and phone number by filling out our webform, emailing us at info@dmandelbaum.com, or calling our office during business hours, and we’ll schedule your consultation appointment with one of our Canadian LMIA immigration lawyers.