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Answer for LMIA

From our Partners at Miller Thompson.
Outside of the rights and obligations provided to Canadians and Canadian Permanent Residents in terminations, what additional factors do employers need to be aware of when terminating a temporary foreign worker (“TFW”)? With a number of employers going through group terminations, questions surrounding their TFW workforces have been asked many times. Unfortunately, as with any legal question, the answer is not simple and depends on the specifics to each situation. It depends on what type of work permit the TFW is currently on, and, depending on the type of work permit, it may depend on the skill level of their position.
The first thing employers need to be aware of is who their TFWs are within their company, because it may not always be obvious. If an employee has a Social Insurance Number beginning with a “9”, they are likely a TFW.
Next, employers need to decipher what type of work permit the TFW currently has.
If the TFW is on a Labour Market Impact Assessment (“LMIA”) (previously the Labour Makret Opinion or LMO) based work permit, that work permit is employer specific, which means the TFW cannot work for any other employer in Canada other than the one specified on the work permit. LMIA based work permits are split into low skilled and high skilled positions. There is a further separation between low wage and high wage positions; however, with regard to employers’ obligations in terminations, the skill level of the position is what is considered. Low skilled positions are those that are categorized by the National Occupational Classification (“NOC”) Code as levels C and D. NOC C and D level positions are those that require little to no education and training. High skilled positions are those that are categorized as NOC code levels 0, A and B, and are those positions that require varying levels of post secondary education, training and experience.
If the position is a low skilled position, upon termination, employers will have, in their LMIA application agreed to provide the costs of transportation of the TFW to and from Canada. As an employer, you cannot force a TFW to leave the country, but you must fulfill your obligation and provide the TFW with the means to leave the country upon termination of employment. In order to protect your interests and employer profile with Employment and Social Development Canada (“ESDC”), (the government entity that processes LMIA applications), it is advisable that you report the termination to ESDC in order to ensure you remain compliant with the original LMIA you obtained to allow the TFW to work in Canada. Further, while you are not required to report the termination to Citizenship and Immigration Canada (“CIC”) or Canada Border Services Agency (CIC’s enforcement agency), if you are concerned that the TFW may attempt to work in Canada for another employer before obtaining a new work permit, it is also advisable that you notify CIC of the termination.
If the TFW is on an LMIA based work permit that is a high skilled position, the work permit is still employer specific; however, there is no obligation to the employer to provide the costs of transportation to the TFW back to their home country, unless specified in the employment contract. Again, it is advisable that you report to ESDC that the TFW is no longer employed with your company, and, while it is not required, you may be inclined to report to CIC that the TFW is no longer working for you if you are concerned they may attempt to work elsewhere before obtaining a new work permit.
If a TFW is on an LMIA-exempt work permit that is employer specific, they also will not be able to work in Canada for another employer without obtaining a new work permit. As the terminating employer, you have no further obligation to the TFW, and you do not need to be concerned with reporting the termination to ESDC because the work permit was not based on an LMIA; however, as with the above LMIA based work permits, if you are concerned the TFW may attempt to work for another employer with the work permit under your company’s name, you may want to consider reporting the termination to CIC.
Lastly, there are TFWs in Canada on open work permits. These work permits are not employer or position specific, and employers have no additional obligations to consider when terminating these employees. Employers do not need to report anything to ESDC, because ESDC was not involved in obtaining the work permit, or CIC, because open work permits allow a TFW to work for any employer in Canada.
As you can see from the brief scenarios provided above, it may not always be clear what you as an employer are required to do for your TFWs and what your responsibilities are to both ESDC and CIC. In order to be sure you are meeting your obligations to your TFW workforce, it is always best to consult with business immigration and employment law experts.