Canada: Certain Details of Upcoming Wage Review Requirements Under the Temporary Foreign Worker Program Clarified
November 29, 2023
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At a Glance
- Effective January 1, 2024, employers of foreign nationals employed in Canada under the Temporary Foreign Worker Program will be required to annually review their foreign worker employees’ wages to ensure that they reflect increases to prevailing wage rates suitable for the occupation and the region.
- Government authorities have clarified the method and process for the annual wage review, which will include a wage review at the beginning of a foreign worker’s period of employment and subsequent reviews by January 1 of each year of employment.
- Employers should review and revise their internal processes to make sure that they comply with new wage review requirements.
The situation
Government authorities have clarified certain details of the new wage review policy under the Temporary Foreign Worker Program (TFWP) that will take effect on January 1, 2024.
A closer look
- Policy details. Employers of foreign nationals employed in Canada under the TFWP (that is, those holding a Labor Market Impact Assessment-based work permit) will be required to annually review their foreign worker employees’ wages to ensure that they reflect increases to prevailing wage rates suitable for the occupation and the region, effective January 1, 2024.
- Method of review. According to written confirmation by Employment and Social Development Canada, employers will be required to review and assess their foreign workers’ prevailing wages at (1) the beginning of a foreign worker’s period of employment, compared to the wage indicated in the approved Labor Market Impact Assessment application; and (2) annually by January 1, using, where relevant, the new wages updated and posted on Canada’s Job Bank. Wages are typically updated on the Job Bank every November.
- Prevailing wage increases. If upon review, the wage of the foreign worker is lower than the prevailing wage for the occupation and region of employment (as per the information in the Job Bank), the employer must increase the foreign worker’s current wage to the prevailing wage.
- Wage floor. If the prevailing wage decreases, employers will be allowed to decrease the foreign worker’s wages. However, the wage paid to the foreign worker cannot be below the wage stated in the foreign worker’s job offer at any time during the employment period (even if the prevailing wage rate decreases below this wage floor).
Impact
- Wage review. Employers should make sure that they accurately and promptly review temporary foreign workers’ wages and ensure that wages are not lower than prevailing wages at any point of the foreign worker’s employment duration.
- Compliance. According to government authorities, authorities will monitor compliance through the existing employer inspection framework.
Background
In October 2023, the government of Canada extended certain temporary flexibilities of the TFWP for a second time, until August 30, 2024, to support Canada’s economic growth and meet its labor market needs. Along with the extension, the government also announced changes to the program, including this wage review requirement, to ensure employers meet fair working conditions for foreign nationals.
Looking ahead
The wage review policy will be in effect until August 30, 2024. The government will continue to review Temporary Foreign Worker Program policies as the labor market and economic conditions evolve in Canada and to ensure there is no displacement or negative effects on Canadian workers or working conditions.
Employers should work with their immigration professionals for case-specific advice.
Fragomen will report on relevant developments.
This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].
