February 28, 2020

What is an LMIA and when do you need it as an employer?

Canadian employers in Canada may need to get documentation of Labour Market Impact Assessment (LMIA) before hiring a foreign worker to support the employee's job offer for Express Entry. A positive LMIA will show that there is a shortage of Canadian workers or permanent residents available to do the job, hence, the employer needs to hire foreign workforce to meet the job requirements. In other words, assuming that there are no suitable Canadian Citizens/Permanent Residents to fill the position, the employer applies to obtain approval from the government to hire a foreign worker.

LMIA-exempt job offers – skilled immigrants (Express Entry)

Some jobs do not need an LMIA to support your job offer if:

  • the employee has been working full-time for the employer on his/her work permit for at least 1 year (or an equal amount of part-time work).
  • the employees you have a valid job offer, and 
  • the employee has a valid work permit that is exempt from an LMIA under:
  1. an international agreement
  2. a federal-provincial agreement
  3. the “Canadian interests” category

For more information on LMIA-exempt job offers click here

  1. Ineligible employers for applying an LMIA: 
  • Employment and Social Development Canada (“ESDC“) do not accept the LMIA application for certain occupations such as Sex Industry (striptease, erotic dance, escort services, or erotic massage)
  • non-compliant, or banned from the Temporary Foreign Worker Program, or in default of payment of a penalty. 

To get the exact detail of the non-compliant list clicks here

However, there is a chance for the companies to get any of these statuses after a compliance review randomly conducted by “ESDC”.

Ineligibility due to employment situations, Industry Sector, and Region:

  • Low-wage positions in the accommodation and food services and retail trade sectors in Canada regions with an unemployment rate of 6% or higher.
  • High-wage and low-wage occupations in the province of Alberta for the restricted positions
  • In-home caregiver positions where there is a live-in requirement. 
  • Any employment with revoked LMIA in the past 2 years.
LMIA Process

All the employers who intend to recruit foreign workers to improve their workforce need to request LMIA by sending applications to Service Canada. The Employment and Social Development Canada (ESDC) offers LMIA under eight streams with specific requirements for employers' eligibility, job advertising, forms, supporting documents, processing fee, and timeline. However, the assessment process for all employers is always to answer the core questions: What is the Impact of Hiring a Foreign Worker? Whether it Affects the Canadian Labour Market Positively or Negatively? 

To process the application, ESDC evaluates whether Canadian workers– citizens or permanent residents–are available to do the job offered to a foreign worker. 

Employer Document Checklist to Proceed the LMIA Application

  1. Legal incorporation
  2. Municipal business licence
  3. CRA T4 summary and filing a T2
LMIA Confirmation Letter 

The next step is issuing a confirmation letter to hire a temporary worker to fill a labour/skill shortage. This is the approval to the neutral/positive effect of employing a foreign national on the Canadian labour market. Positive LMIA helps Temporary Workers to immigrate to Canada by getting additional points (50-200) in Express Entry. 

Next Step after Obtaining an LMIA Approval 

Once the LMIA application is approved, the employer is required to send a copy of this letter and Annex A to the foreign worker. Then, following a telephone interview and the employer’s  positive decision on applicant’s qualifications, the applicant submits a 1-2 year Work Permit Application before beginning employment in Canada. Foreign nationals may also submit permits for their immediate family members.

Processing times for work permits can vary depending on where the application was submitted.

To apply for a work permit, a worker needs

  • a job offer letter
  • a contract
  • a copy of the LMIA
  • the LMIA number

If eligible, they may submit an application for permanent residence.

For detailed information on getting Canadian Work Permit, click here