What the Program Requires of Employers
The Temporary Foreign Worker Program (TFWP) allows Canadian employers to hire workers from abroad when qualified Canadians or permanent residents are not available. But participation in the program is not passive. From the moment a Labour Market Impact Assessment (LMIA) is approved and a temporary foreign worker begins employment, the employer assumes a detailed set of legally binding obligations under the Immigration and Refugee Protection Regulations (IRPR).
Employers must, at minimum, ensure that:
- The worker is employed in the same occupation described in the LMIA and the employment offer
- The wages paid are not less favourable than those stated in the LMIA
- Working conditions are at least as favourable as those outlined in the employment offer
- The workplace is free from abuse and harassment
- The business remains engaged in the same activity it was conducting when the LMIA was approved
- The employer informs Employment and Social Development Canada (ESDC) promptly of any changes or errors with an approved LMIA
If LMIA commitments included promises around training Canadians, transferring skills, or creating jobs for permanent residents, those commitments must also be demonstrably fulfilled throughout the worker's employment.
Record-Keeping Requirements
One of the most commonly misunderstood obligations under the TFWP is the record-keeping requirement. Employers must retain all relevant records for six years beginning on the first day of the employment period covered by the work permit. This is not simply a best-practice recommendation — it is a regulatory requirement under the IRPR.
The records that must be kept include:
- All documents related to the LMIA and its decision letter
- The LMIA annexes and associated conditions
- Payroll records and wage statements for the foreign worker
- Any documentation of changes to the worker's housing conditions
- Documentation showing compliance with all federal, provincial, or territorial employment standards laws
- Records of any steps taken to hire or train Canadians as part of the LMIA conditions
Employers who cannot produce these records during an inspection face a significant disadvantage: the burden of proving compliance rests with the employer, not the government. Incomplete records are one of the most direct routes to a finding of non-compliance, even when the actual employment conditions were perfectly acceptable.
The Inspection Regime
ESDC has broad authority to inspect any employer who participates or has participated in the TFWP. Crucially, this authority extends up to six years after the foreign worker first began work. That means an employer who hired a temporary foreign worker in 2022 could still be subject to inspection in 2028.
Inspections can be triggered by any of the following:
- A suspicion of non-compliance based on a complaint or tip
- A previous finding of non-compliance with the TFWP
- Random selection using an algorithmic approach
- Discovery of a communicable disease at the worksite
Inspections may be conducted on-site or virtually, announced or unannounced, and without a warrant — except for private dwellings. Inspectors are permitted to interview both employers and employees, request copies of documents, take photographs or recordings, and examine computers or other electronic devices.
How to Prepare for an Inspection
When notified of an inspection, employers are required to attend, answer questions, and demonstrate compliance. Practical preparation steps include:
- Organizing LMIA documents, annexes, and the original decision letter in a single, accessible location
- Ensuring payroll records clearly match the wage commitments in the LMIA
- Preparing written documentation of any employment condition changes
- Briefing HR personnel on what inspectors are permitted to ask and review
- Verifying that current working conditions align with what was promised in the employment offer
Consulting an immigration professional before an inspection gives employers a clear understanding of where gaps may exist before an inspector arrives.
Common Violations and What They Reveal
ESDC inspectors assess compliance against 29 conditions set out in the IRPR. The most frequently cited issues in enforcement actions include:
- Wage discrepancies: Paying less than what was committed in the LMIA, or failing to apply the same wage increases offered to comparable Canadian employees
- Job duty changes: Assigning the foreign worker to tasks or roles different from those described in the employment offer
- Inadequate record-keeping: Missing payroll records, unsigned contracts, or no documentation of housing changes
- Failure to make recruitment efforts: Where the LMIA committed to ongoing recruitment of Canadians, employers sometimes cannot demonstrate those efforts occurred
- Workplace abuse: Failing to make every effort to provide an abuse-free environment
- Change of business activity: If the employer's core business has changed since the LMIA was issued
Many violations are not deliberate. They arise from poor internal systems, staff turnover, or a failure to understand what the LMIA actually commits the employer to. Compliance should be treated as an ongoing management function, not a one-time event at the time of hiring.
What Happens When an Employer Is Found Non-Compliant
When an inspection identifies potential issues, ESDC sends the employer an initial finding of non-compliance and asks for a written justification. If the justification is not accepted, ESDC issues a Notice of Preliminary Finding (NOPF). Employers have 30 days to respond with new information or documentation.
If violations are confirmed, ESDC issues a Notice of Final Determination (NOFD). Penalties can include:
- A formal warning
- Administrative monetary penalties of up to $100,000 per violation, to a maximum of $1 million per year
- A temporary or permanent ban from the TFWP and the International Mobility Program (IMP)
- Publication of the employer's name and address on IRCC's public list of non-compliant employers
- Suspension or revocation of previously issued LMIAs
Recent Enforcement Trends
ESDC has intensified its use of random selection for inspections in recent years. Inspections have increasingly targeted sectors with higher rates of historical non-compliance, including agriculture, food processing, hospitality, and domestic caregiver arrangements. The publication of non-compliant employer names has served as a significant deterrent, and there is evidence that ESDC is pursuing larger penalties in cases involving wage fraud or worker abuse rather than defaulting to warnings for serious violations.
Employers with prior findings of non-compliance are subject to heightened scrutiny: a history of violations is itself one of the formal grounds for triggering an inspection under the IRPR.
Worker Protections Built into the Program
The TFWP compliance framework exists principally to protect workers. Temporary foreign workers are a structurally vulnerable group: they are in Canada under a work permit tied to a specific employer, which creates an inherent power imbalance that bad actors can exploit.
The regulatory framework addresses this in several ways. Employers are prohibited from charging workers fees related to their recruitment. Workers are legally entitled to wages and conditions at least as favourable as those promised in the employment offer. IRCC's open work permit policy for vulnerable workers allows temporary foreign workers who are experiencing abuse or risk of abuse to apply for an open work permit that is not tied to a specific employer, giving them the ability to leave an abusive workplace while maintaining legal status in Canada.
What Employers Should Do
Compliance with the TFWP should be built into a company's standard HR and legal processes. The six-year lookback period means there is no point at which an employer can consider a past hire fully closed from a compliance perspective.
Practical recommendations include:
- Designating a specific person or team responsible for TFWP compliance and record-keeping
- Conducting internal compliance reviews at least annually, using the 29 IRPR conditions as a checklist
- Keeping all LMIA documents, payroll records, and employment condition documentation in a well-organized archive
- Notifying ESDC promptly of any changes to the worker's role, location, wages, or working conditions
- Using the voluntary disclosure process if issues are identified internally before an inspector arrives
- Working with a regulated immigration consultant or immigration lawyer who can assess compliance posture and advise on corrective steps
Book a Free Consultation with KGraph
If your business participates in the Temporary Foreign Worker Program or is considering doing so, KGraph's regulated immigration consultants can help you understand your obligations, assess your current compliance posture, and prepare for potential inspections. Visit kgraph.ca to book a free consultation and get expert guidance tailored to your specific situation.