New wage formula set for labor market applications

3 Oct 14

CANADA

IMPACT – HIGH

What is the change? Canada has updated its Labor Market Impact Assessment (LMIA) application form, and is using a new wage formula to determine whether an application falls under the high-wage or low-wage stream.

What does the change mean? The new criterion is the wage paid by an employer, rather than the provincial or territorial prevailing wage for the job.

  • Implementation timeframe: Immediate.
  • Visas/permits affected: The LMIA stream in theTemporary Foreign Worker Program (TFWP).
  • Who is affected: Employers using foreign workers in the TFWP.
  • Impact on processing times: Employers who offer wages that meet or exceed the top 10 percent of wages in the province or territory where the job is located are eligible for expedited 10-day processing of LMIA applications (filed outside Quebec).
  • Business impact: The change in formula may put more applications into the high-wage stream.
  • Next steps: Employers should work with their BAL attorney to review pending applications that were filed as low-wage LMIA applications.

Background: The new application form and wage formula is part of Canada’s overhaul of the TFWP. Previously, the high-wage and low-wage streams were based on the prevailing wage for the particular job compared to the provincial or territorial median wage. Going forward, the determination of high-wage and low-wage applications will be based on the wage paid.

BAL Analysis: Employers applying for LMIA positions should prepare for the possibility that some applications that previously fell under the low-wage stream may now be considered high-wage. As a consequence, most high-wage applications (with very few exceptions) now require that employers submit a transition plan describing how the employer intends to transition to Canadian workers over the duration of the foreign worker’s employment period under the LMIA. Employers may request a two-year LMIA for high-wage applications, as opposed to one year.

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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