Companies face stricter labor market opinion rules

IMPACT – Medium

What are the changes? Canada has imposed new conditions on employers in the labor market opinion process.

What do the changes mean? Employers must pay foreign workers with yearly salary increases that are consistent with the prevailing wage and must comply with stricter rules on the use of recruiters.

• Implementation timeframe: Jan. 2.
• Visas/permits affected: Work permits on labor market opinion (LMO) approvals.
• Who is affected: Companies applying for foreign workers through the LMO process.
• Impact on processing times: None.
• Business impact: Businesses will face increased costs corresponding to prevailing wages.
• Next steps: Employers should plan to factor in the cost of annual salary increases for foreign assignees. Employers that use recruiters should plan for stricter oversight by the Canadian government.

Background: The restrictions appear on the new Labor Market Opinion (LMO) forms introduced at the end of 2013.

Under the new rules, employers must pay foreign workers according to the prevailing wages, including yearly increases. The prevailing wage is published by the government and represents the median wage for each occupation. In the past, employers only had to start the foreign worker at the prevailing wage, but did not have to follow annual hikes.

Two additional rules are aimed at employers that use recruiters. A foreign worker is now prohibited from paying an employer, its recruiter or a third party for a job offer, and employers must now comply with new provincial and federal laws concerning recruiters.

BAL Analysis: The new rules are part of an overall trend toward stricter LMO regulations. Employers must track the prevailing wages for each foreign worker and increase salaries accordingly.

This alert has been provided by the BAL Global Practice group and our network provider located in Canada. For additional information, please contact GlobalVisaGroup@bal.com.

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