September 20, 2014 – Employment and Social Development Canada (ESDC) has updated the Labour Market Impact Assessment (LMIA) application forms. This update includes a new formula that relies on wages-paid, instead of prevailing wage, for delineating between the “high-wage” and “low-wage” application streams. This change will likely result in a greater number of applications qualifying as “high-wage”, and will increase access to 10-day expedited processing for the highest-paid occupations. This change is retroactive to June 20, 2014 and will affect already submitted LMIA applications.
Recent reforms to the Temporary Foreign Worker Program (TFWP) included the creation of two application streams: “high-wage” and “low-wage”. In order to ensure the program was used as intended, applicants in the “high-wage” stream are required to prepare a plan to transition to a Canadian workforce. This plan may include hiring and training Canadians and Permanent Residents, actively recruiting underrepresented groups, and sponsoring foreign workers.
Applicants in the “low-wage” stream face caps on the number of foreign workers that may work at any given work site. Applicants from certain sectors also face a blanket moratorium on applications in regions with unemployment at-or-above 6%.
The New Formula
As a result of the changes on the application forms, “high-wage” occupations are those occupations where the wage paid is above the provincial or territorial median wage. Wages below the provincial or territorial median wage are “low-wage” occupations.
Previously, the formula relied on the prevailing wage for the occupation relative to the provincial or territorial median wage, rather than the wage paid.
What this means for Employers
Employers with pending LMIA applications for low-wage occupations should seek assistance in reviewing their applications. If the wage being offered is above the provincial or territorial median wage, these applications now qualify as “high-wage” occupations. While these employers will no longer face caps and other restrictions associated with the “low-wage” stream, they will now be required to prepare transition plans as part of the application process.
Reliance on wages paid as opposed to prevailing wage will also open up access to 10-day expedited processing. Employers offering wages in the top 10% above the provincial or territorial median will now qualify for expedited processing of their LMIA applications.
If you have any questions about this update and how it may affect your pending or future LMIA applications, please contact Green and Spiegel LLP.