Strict New Penalties for Employers Who Abuse the Temporary Foreign Worker Program

As of December 1, 2015, Citizenship and Immigration Canada (CIC) and Employment and Social Development Canada (ESDC) will be implementing new consequences for employers who violate the rules of the Temporary Foreign Worker Program. These new regulations were published in the Canada Gazette earlier this month.

These new regulations are an attempt to enhance the existing compliance framework to better address varying degrees of defiance in response to concerns about changes to the TFWP announced in June, 2014.

Currently, the consequence for non-compliance of any kind is a two-year ban from using the program. There exists no range of penalty depending on the severity of the violation. The new regulations apply to employers hiring foreign na

Strict New Penalties for Employers Who Abuse the Temporary Foreign Worker Program

tionals under either the Temporary Foreign Worker Program (TFWP) or the International Mobility Program (IMP), as well as individuals hiring foreign caregivers.

“Stiff new consequences will encourage compliance and help prevent employers from misusing the programs or mistreating workers by ensuring that employers who violate program conditions face appropriate consequences,” said Employment Minister, Pierre Poilievre.

According to the new regulations, employers who do not comply with the conditions of the programs following an inspection could receive a penalty of a one, two, five, or 10-year ban from use of the program(s) per violation. The length of the ban will depend on the degree of non-compliance. In the most serious of cases, employers could be penalized with a lifetime ban. Furthermore, a system of administrative monetary penalties (AMPs) will be implemented. These fines can range from $500 to $100,000 per violation. While the AMPs will be cumulative, bans will not. Instead, in situations where there are multiple bans, only the longest will apply.

Last September, a discussion paper was published by ESDC putting forward a list of proposed consequences for employers found to be in non-compliance. Since then, the government has received feedback from 42 stakeholder groups. In response to the stakeholders’ feedback, a number of amendments were made to the proposed penalties. These amendments include:

  • A cap of $1 million per year, per employer in AMPs.
  • A 30-day period for the employer to respond in writing to the findings of the inspection, with the possibility of extension. After the 30 days, the dispute will be referred to the court system.
  • The option for employers to voluntarily disclose mistakes in order to receive a less severe penalty. This lesser penalty may simply be a written warning.
  • The reinstatement of “good faith” provisions. These will acknowledge the existence of human error, including administrative errors or misinterpretations.
  • A “blacklist” posted online with only the names of employers who have either been fined or banned from use of the program, rather than the names of all so-called “non-compliant” employers.

Many stakeholders found the proposed consequences overly strict, especially for small businesses, but also welcomed certain aspects of the new regulations. They claimed that these new penalties would create absolute liability for the employers and leave them without proper recourse to appeal. Some feel it would be beneficial for the government to institute a more informal appeals process or an administrative appeals process internally, rather than jumping into the court system prematurely.

“We still find the penalties very stiff for small employers, but at least there seems to be a more reasonable approach to errors made in good faith and a change to the administrative decision-making process, that is allowing a written reply by an employer before a decision on non-compliance is made,” said Sarah Anson-Cartwright, the director of skills policy at the Canadian Chamber of Commerce.

“These compliance decisions should be balanced by a proper appeal process, but we do not see that . . . which is unfortunate,” Anson-Cartwright added.

The new penalties come into effect as of December 1, 2015.