New penalty regime to take effect Dec. 1

4 Nov 15

CANADA

IMPACT – MEDIUM

What is the change? A new penalty regime for employers who violate the terms of foreign employees’ work permits will take effect Dec. 1.

What does the change mean? Employers should be cognizant of the new penalties and make sure they are in compliance with all applicable rules and regulations.

  • Visas/permits affected: All work permits. The proposal covers LMIA-based and LMIA-exempt work permits, including permits for intracompany transfers.
  • Who is affected: Any company employing foreign nationals.
  • Business impact: Companies will face fines and other penalties for violating the terms of a work permit. For larger companies, the fines reach a maximum of CA$100,000 (about US$76,000) per violation, with a cap of CA$1 million in fines per year.

Background: The new program introduces new administrative penalties for everything from an employer’s inability to demonstrate that information on a work permit is accurate (considered a relatively minor violation) to an employer’s failure to make sure a workplace is free of abuse (considered the most serious type of violation).

Violations would be given a score based on both the type and severity of the infraction. Fines are higher for larger companies and range from zero to CA$100,000, with a maximum of CA$1 million in fines per year. Other penalties will include barring employers from recruiting additional foreign workers. Employers with unpaid fines would be barred from recruiting new foreign workers until they pay their fines. Those who demonstrate a good-faith effort to stay in compliance will not be penalized.

Besides the administrative penalties, current law provides for criminal penalties in the form of fines of up to CA$50,000 and as many as two years in prison for employers who hire undocumented workers. The criminal penalties will remain unaffected by the Dec. 1 changes.

BAL Analysis: The new penalty regime reflects the government’s seriousness about punishing employers who violate the terms of foreign workers’ work permits. Those with questions about staying in compliance with rules and regulations governing the employment of foreign workers should contact their BAL attorney as soon as possible.

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

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