Cap on Low-Wage Workers in LMIA Applications

The LMIA process through which foreign workers can access legitimate employment in Canada came with the creation of the Cap on Low Wage. This policy seeks to make employers to employ the Canadians citizen and the permanent residents by avoiding the excessive of foreign workers in low wage positions. In order to qualify for an LMIA, employers willing to hire low-wage foreign workers are required to prove that they have tried to hire local workforce. It is meant to guard the interest of the Canadan labor market by favoring Canadians for employment opportunity in low wage occupations.

Main Characteristics of the Limitation of Low-Wage Earner Employment

Ban of Foreign Workers in Low Waged Employment

Employers seeking an LMIA to engage low wage employees have restrictions on the proportion of foreign staff they can hire. The government has set this cap to prevent the employment of too many foreign workers mainly in fields where there are still qualified Canadians available for the job.

Dependent on the industry and geographic location, the different cap of operations is subjectively determined.

The cap percentage may differ on the industry where the employer is based as well as the location of the employer in question. For instance, organizations operating in areas where there are few people willing to work maybe subjected to higher caps than employers in large cities.

The attempted made to employ the citizens of Canada first

Situations in which employers failed in recruiting Canadians for the job they require proof of the efforts made towards responding to the job requisites. This includes placing an advertisement to the job locally and make sure that Canadian workers get equal chance to apply before offering a foreign worker for the job.

There are certain industries to which employees can be exempted especially the industries which have a clear recoition of above minimum wage by the employer.

There may be an exception to the cap depending on the nature of industries or positions necessary where it will be difficult to get adequate supply of labour within Canada or any other country or where the position needs special skills and knowledge that is hard to find in the Canada market. The latter stated that these exemptions are to be approved by Employment and Social Development Canada (ESDC).

Impact on High-Wage Jobs

The cap is often ineffective at jobs earning a lot of money as these post are rarely occupied by low-wage foreign employees. Accordingly, using LMIA, employers seeking employees for positions with high remuneration may recruit foreign workers without those restrictions.

A part of the TFWP Compliance mentioned in the CBSA ‘s Statement of Operational Priorities is discussed below.

The cap is under Ontario’s Temporary Foreign Worker Program and targets employers who seek to hire TFWs in low-skilled jobs. Failing to meet the above cap or to file documentation showing that adequate efforts were made towards recruitment will lead to rejection of an LMIA application.

Annual Review and Adjustments

The Canadian government revises the cap every year with economic conditions, the state of the labor market and the employment rates of different industries. Employers should monitor the developments on the cap in order to determine their feasibility when applying for LMIA in the future.