Briefing: May 16, 2013

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Canada sharpens temporary foreign worker rules

Companies operating in Canada that use the Temporary Foreign Worker program will face tougher rules. The Canadian government rolled out reforms to its Temporary Foreign Worker program on April 29 in the wake of a Canadian Broadcasting Corporation story on the use of workers supplied through iGate Corp. (NASD: IGTE) to the Royal Bank of Canada. The changes have been criticized by the Canadian Chamber of Commerce which says they will add costs.

The reforms include requiring temporary foreign workers to be paid at prevailing wages and temporarily suspending the accelerated labor market opinion process.

“These reforms will require that greater efforts be made to recruit and train Canadians to fill available jobs,” Jason Kenney, minister of Citizenship, Immigration and Multiculturalism, said in a press release. “They will also help ensure that goal is met and Canadian workers are never displaced.”

The CBC reported the changes were expected after a story earlier this month on the Royal Bank of Canada’s use of foreign workers. For the original story, click here. The Royal Bank of Canada responded to the original story in a press release and an open letter to Canadians.

The reforms put forward Monday, according to the government, will:

  • Require employers to pay temporary foreign workers at the prevailing wage by removing the existing wage flexibility effective immediately. Employers had the in past the ability to pay foreign worker wager up to 15 percent below the prevailing wage for a higher-skilled occupation and 5 percent below the prevailing wage for a lower-skilled occupation. However, they had to demonstrate the wage being paid to a foreign worker was the same as that being paid to their Canadian employees in the same job and in the same location.
  • Temporarily suspend the accelerated labor market opinion process effective immediately.
  • Increase the Government’s authority to suspend and revoke work permits and labor market opinions (LMOs) if the program is being misused. Canadian employers must apply for a labor market opinion before hiring a foreign worker, according to the Citizenship and Immigration Canada website. A positive labor market opinion shows a need for a foreign worker and that there is no Canadian worker available for the job.
  • Add questions to employer LMO applications to ensure that the Temporary Foreign Worker program is not used to facilitate the outsourcing of Canadian jobs.
  • Ensure employers who rely on temporary foreign workers have a firm plan in place to transition to a Canadian workforce over time through the LMO process.
  • Introduce fees for employers for the processing of LMOs and increase the fees for work permits so that the taxpayers are no longer subsidizing the costs.
  • Identify English and French as the only languages that can be used as a job requirement.

The Canadian Chamber of Commerce reported the changes will add costs, delays and red tape to Canadian businesses.

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