June 10, 2014 – In an operational bulletin released yesterday, the Government of Canada provided new guidance to officers processing work permit applications for Intra-Company Transfers (ICTs) in the Specialized Knowledge category. Effective immediately, applicants will be required to demonstrate both proprietary knowledge and advanced expertise in order to qualify for a Labour Market Opinion (LMO) exemption. The bulletin also introduces a wage-floor, requiring for the first time that most transferees be paid above the prevailing wage in Canada. Taken together, these changes are expected to impact industries that rely on transfers of Specialized Knowledge workers in order to grow their business in Canada.
Who is affected?
All Intra-Company transfers under the Specialized Knowledge category are affected except where the transferee is from a country with whom Canada has a bilateral or multilateral free trade agreement, such as NAFTA, that provides for a different definition of “Specialized Knowledge”.
In addition, countries with bilateral or multilateral free trade agreements are exempted from the wage floor requirement.
ICTs under the Executive and Senior Management Category are not affected.
How has the definition of Specialized Knowledge changed?
Specialized Knowledge is now defined as possessing both proprietary knowledge and advanced expertise. Such knowledge must now be both unique and uncommon, not only within the context of the industry but also within the context of the company itself. In addition, such knowledge must not likely be available in the Canadian labour market.
Previously, the presence of such Specialized Knowledge in Canada was not germane to the test of whether or not the applicant possessed such knowledge.
What industries are likely to be affected?
Industries that rely heavily on proprietary knowledge but whose advanced knowledge is shared on an industry-wide basis, such as Information Technology and Telecommunications, will be significantly impacted. Because the knowledge requirement is now being read against not only the industry at large, but also the Company and Canada, previously eligible ICTs may now, in some cases, no longer be LMO exempt.
What are the Wage-Floor Requirements?
The wage-floor requirement is new, and will only be applied to LMO exempt ICTs in the “Specialized Knowledge” category if the transfer is not governed by a bilateral or multilateral free trade agreement (e.g., NAFTA).
The operational bulletin instructs officers to determine the Canadian prevailing wage for the specific occupation and region of work using the Employment and Skills Development Canada (ESDC) “Working in Canada” tool. Applicants subject to the wage-floor requirement must now, in most circumstances, be paid at an above average salary that is consistent with their specialized knowledge. This means that the prevailing wage as determined by ESDC constitutes the absolute minimum that such a transferee may be paid in Canada. In practice it appears that such transferees will now need to be paid well above the prevailing wage in order to qualify for an LMO-exempt work permit in this category.
Information for Employers
As the guidelines take immediate effect, employers in the process of transferring employees to Canada under the Specialized Knowledge category should immediately review transferee qualifications against the new guidelines, ensuring that both the knowledge requirements and wage-floor requirements are met.
In some cases, employees that would have qualified for an LMO-exempt work permit under the old guidelines may now be required to apply as a High Skilled Temporary Foreign Worker pursuant to a positive LMO.
For further information about the new guidelines and how they may affect you please contact Green and Spiegel LLP.