Consequences of Non-Compliance with the Temporary Foreign Worker Program

In the current environment, companies are experiencing a rise in the frequency and number of inspections as the Temporary Foreign Worker Program (TFWP) imposes stricter restrictions and enhanced compliance monitoring.

Compliance is crucial for employers wishing to maintain their eligibility in the program, avoid increasingly severe financial sanctions, and mitigate reputational risks. This article addresses the consequences of failing to comply with the program’s requirements and the measures to be taken to minimize its impact. 

 

Identification of a Non-Compliance Situation 

When a company realizes it has failed to comply with the TFWP requirements, it is essential to act quickly to rectify the situation and implement preventive measures to avoid recurrence. For instance, if an administrative error results in temporary foreign workers receiving less compensation than stipulated in the Labour Market Impact Assessment (LMIA), the employer must correct the situation retroactively and precisely document the reason for the error and all corrective measures taken to prevent recurrence. In another scenario, if an employer discovers it is employing an unauthorized worker, it must immediately terminate or suspend the employment depending on the circumstances. Under no circumstances should an employer knowingly retain an unauthorized worker.  

 

Voluntary Disclosure  

In certain cases, if an employer finds itself in a non-compliance situation, voluntary disclosure may be considered to reduce the financial penalties associated with the violation. A voluntary disclosure must be made promptly upon identifying the non-compliance, in a thorough and detailed manner, and always before an inspection or investigation is initiated by Service Canada or Immigration, Refugees and Citizenship Canada (IRCC). Although voluntary disclosure can contribute to the reduction of some penalties, the employer is responsible for taking all necessary corrective measures, including the payment of arrears of wages or other required amounts. Service Canada may also decide to conduct a more in-depth inspection. 

It is also essential to note that this process does not cancel the violation nor correct the employee’s situation. For example, if an employee worked illegally, even with timely and complete voluntary disclosure, they remain ineligible for a Québec Selection Certificate (CSQ) or Québec Acceptance Certificate (CAQ). Indeed, although the employer has made voluntary disclosure, the employee remains subject to section 3.2 of Québec Immigration Regulation, under which the worker may be declared inadmissible for five years due to non-compliance with TFWP requirements. This penalty underscores the importance of compliance and the need to implement preventive measures and awareness programs. 

 

Inspections 

When a company is inspected and finds itself in a non-compliance situation, it is crucial to take corrective measures and provide all required documentation. Cooperation with inspectors is essential, as a lack of cooperation can lead to even more severe penalties. Companies must be prepared to demonstrate their commitment to compliance and to promptly rectify any identified violations. 

 

Consequences of Non-Compliance

 
Non-compliance with the TFWP can have serious consequences for companies, both financially and in terms of their reputation as an employer and organization. 

 

Financial Consequences

 
The TFWP classifies violations into three distinct categories: A, B, and C. Each category represents a different level of non-compliance severity and carries penalties calculated in terms of points and financial fines. Specifically, each point accumulated based on the infraction affects the calculation of penalties. 

Category A violations are the most severe and represent a major violation of the TFWP requirements. These include, among others, employing foreign workers without a valid work permit or other authorization, falsifying documents, and refusing to cooperate with an inspection. Fines for this type of infraction can range from 500 dollars to 100,000 dollars per violation. Suspension from the TFWP for up to 10 years may also be imposed. 

Category B violations are less severe than Category A but are nonetheless considered significant. These include, for example, a breach with the working conditions specified in the LMIA or job offers, and false declarations. Fines for these violations range from 250 dollars to 50,000 dollars per violation. Suspension from the TFWP for up to 5 years may also be imposed. 

Category C violations are the least severe and most common. They include minor administrative errors or failures to comply with certain reporting requirements to Service Canada. Fines for these violations range from 100 dollars to 10,000 dollars per violation. Suspension from the TFWP for up to 2 years may also be imposed. Penalties in this category are the most common. 

 

Temporary Suspension from the TFWP 

If a company is in a situation of severe non-compliance (Category A) or is suspected of any form of abuse toward temporary foreign workers, it may be temporarily banned from the TFWP for the duration of the inspection. This temporary suspension can have significant repercussions on the company’s ability not only to recruit temporary foreign workers but also to renew work permits that expire during this period, thus affecting its operations and market competitiveness. 

 

Reputational Risks 

Beyond financial and operational consequences, non-compliance with the TFWP can also damage a company’s reputation. Companies that do not comply with immigration regulations and appear on IRCC’s official blacklist may be perceived as unreliable or irresponsible, which can harm their image with employees, potential candidates, clients, and partners.  

 

Conclusion 

Compliance with the TFWP is essential for any company employing temporary foreign workers. By understanding the regulations and taking proactive measures to ensure compliance, companies can avoid severe penalties and maintain a positive reputation. Mastery of immigration law is an essential strategic tool for effective human capital management and the attraction and retention of foreign talent.