Low-Wage LMIA: Complete Guide to Requirements, Cap Restrictions and Application Process
What is a 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.
This requirement must be carefully read. It means that if you offer a wage that is above the position median wage for the occupation in the region (i.e., city/town) of employment, but less than high wage cutoff that considers all occupation wages in the province or territory, the LMIA application stream must be the low wage stream.
Understanding the Low-Wage LMIA Stream
Importantly, 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 change from time to time, but generally speaking, 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).
Before you begin working on your LMIA application, make sure that your job offer is not in a region with an unemployment rate at or above 6% or ensure your position qualifies for an exempt occupation to make sure it is accepted for processing.
Low-Wage LMIA Requirements
The differences in the requirements between the low and high wage streams are considerable. First, low wage stream applications require the employer to demonstrate reasonable, affordable accommodations available to the foreign worker in the region (i.e., city/town) of employment – requiring that these sometimes be supplied by the employer at the employer’s additional expense.
The employer must also pay for the transportation of the temporary foreign worker to Canada and from Canada at the commencement and conclusion of employment, respectively.
The low wage stream also requires the employer to pay for transportation costs from the residence of the foreign worker in Canada to the place of employment, and back to the employee’s home. These employment conditions must be offered in the employment agreement.
The 10% Cap Rule: Understanding LMIA Workforce Limits
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.
How the Cap Works?
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.
Some industries benefit from cap adjustments of up to 20% or 30% of the entire workforce.
Others benefit from cap exemptions. These adjustments and exemptions change as policy changes over time, so it is important to consult the latest criteria for determining cap adjustments or exemptions.
Calculating the Cap for Your Workplace
Calculating the cap for a workplace with a combination of full-time and part-time employees can be difficult. The formula involves determining a full-time equivalent (FTE) work force, and applying an appropriate adjustment factor.
An employer is required to use up-to-date employee counts when calculating the cap. However, many employers only track this information on a year-to-year or quarter-by-quarter basis. This means that, if the employer’s workforce of FTE positions dropped from end of the previous year or quarter, your cap calculation may need to be recalculated.
Cap Compliance Throughout the Process
Employers considering the low wage LMIA stream should be mindful of the cap and how the calculation changes with time as employment levels change in a workplace.
Even though you started the process at a cap compliant level, if by the time the TFW officer is ready to decide the application your workplace is no longer cap compliant, your low wage LMIA stream application can be refused.
This unique feature – the TFW hiring cap – distinguishes the low wage LMIA stream from the high wage LMIA stream.
Low-Wage LMIA Advertising and Recruitment Requirements
Another distinguishing feature is the advertising and recruitment requirements. While generally the same as the high-wage stream, the low wage stream has the added complexity of needing to target underrepresented groups – that is, defined population groups that suffer from chronic underemployment across Canada as compared to the general population.
Efforts must be made to recruit Canadians who are part of those groups. Even if your advertisements were extensive, and might generally reach underrepresented groups as well as the general population, failure to specifically target one or more underrepresented groups can lead to a low wage stream LMIA application refusal.
Targeting Underrepresented Groups
Thus, for a low wage stream LMIA application, it is not enough for an employer to conduct broadly focused and diverse advertising and recruitment efforts. Employers must also reach out to specific underrepresented groups – often directly to the communities in which they may be most likely to be represented or located – and specifically target members of those groups.
Job Bank Matching Requirements
Another feature of the low wage stream is that employers are required to invite to apply all candidates ranked 2 stars or higher by the national Job Bank matching service. Failure to invite even one candidate from the time the campaign begins through to application decision can result in a rejection.
This is a stricter requirement than the high-wage stream, which requires inviting 4-star or higher candidates.
Processing Times and Duration
Processing times for low-wage LMIA applications vary depending on application inventory, as these are processed on a first-come, first-serve basis. An average of 4-8 weeks can be expected, but processing times vary by time of year and stream demand.
The maximum work permit duration for low-wage positions is typically 1 year, compared to 2-3 years for high-wage positions.
Common Low-Wage LMIA Rejection Reasons
Low-wage LMIA applications face specific rejection risks:
Cap non-compliance: If your workforce size changes during processing and you fall out of cap compliance, your application will be refused.
Failure to target underrepresented groups: Even with extensive advertising, if you didn’t specifically target underrepresented groups, you face refusal.
Incomplete Job Bank invitations: Failing to invite even one 2-star or higher candidate throughout the entire process can result in rejection.
Regional unemployment issues: Applications in regions with 6%+ unemployment may not be processed unless the position is exempt.
Insufficient housing documentation: Failure to demonstrate affordable, reasonable housing available to the worker can lead to refusal.
Transportation cost omissions: Not including transportation costs in the job offer or employment agreement is grounds for refusal.
Application Fees and Costs
Employers must pay the $1,000 CAD LMIA application fee. Additionally, for low-wage positions, employers must cover:
- Round-trip transportation to and from Canada
- Transportation between worker’s residence and workplace
- Costs to ensure affordable housing is available
- Private health insurance until provincial coverage begins
These additional costs make low-wage LMIA applications more expensive than the application fee alone suggests.
How Mandelbaum Immigration Lawyers Can Help
The low-wage LMIA stream has unique complexities that make professional legal assistance particularly valuable:
Cap calculations
We help you accurately calculate your cap, including FTE adjustments, and monitor compliance throughout processing.
Underrepresented groups strategy
We develop targeted recruitment strategies that meet the specific requirements for reaching underrepresented groups.
Job Bank monitoring
We help you set up systems to ensure you invite all required candidates throughout the entire application process.
Regional unemployment analysis
We verify whether your position is in a refusal-to-process region and whether exemptions apply.
Housing and transportation compliance
We ensure your job offer includes all required housing and transportation provisions in legally compliant language.
Our experience with low-wage LMIA applications across industries including hospitality, caregiving, food services, and general labour means we understand the specific challenges employers face in this stream.
Don’t risk a refusal due to cap miscalculations, incomplete Job Bank invitations, or failure to properly target underrepresented groups. Let our experienced LMIA lawyers guide you through the low-wage stream successfully.
Contact our law firm today to schedule a consultation. Simply provide us with your name, email address, and phone number by filling out our web form below.