Prevailing Wages Updated

The situation

The Canadian government updated the prevailing wage for many industries, affecting the wage that employers must pay foreign workers under certain immigration applications. The increases vary by region and occupation.

A closer look

The following work permit categories are affected by the prevailing wage increase:

Work permit category	Application of prevailing wage
Intra-Company Transferees (Specialized Knowledge) other than under the United States-Mexico-Canada Agreement, EU-Canada Comprehensive Economic and Trade Agreement and other free trade agreements	Prevailing wage is a minimum requirement for new work permits and extensions
Labour Market Impact Assessment (LMIA)	Employers have an obligation to comply with the prevailing wage and to review and adjust the wages of the foreign national, when applicable. This must be done at least annually, to ensure that the foreign national continues to receive the prevailing wage for the occupation and region where they are employed. This may affect ongoing recruitment efforts.
Labour Market Impact Assessment - Global Talent Stream	Same requirements as the main LMIA category. In addition, certain in-demand occupations have minimum wage floors that may differ from the prevailing wage.
Permanent Residence (PR)	Many employer sponsored PR applications under the Provincial Nominee Programs require that employers of foreign nationals comply with the prevailing wage.

Impact

Since the prevailing wage has increased for many occupation categories, employers should review their foreign employee population in Canada for compliance with the updated wage requirements.

For pending applications, the Employment and Skills Development Canada/Service Canada (ESDC) may request that employers adjust the wage offered to a foreign national prior to issuing a work permit. Pending Intra-Company Transfer specialized knowledge worker applications may also require adjustments to the wages paid to the foreign worker.

Background

• Prevailing wage purpose. Many work permit categories in Canada require that a foreign national be paid at or above the prevailing wage, which is the median wage as established by ESDC for a particular occupation in a geographic location in Canada. The prevailing wage is determined based on data contained in the National Occupational Classification and adjusted on a semi-regular basis, generally from September through November of each year. The government uses prevailing wages to protect the labor market by keeping wages high, while also ensuring reasonable access to the labor market for Canadian employers of highly-skilled foreign workers.
• Prevailing wage assessment step. The prevailing wage is relevant throughout the processing of a work permit application. In an LMIA application, it is assessed by ESDC and then by Immigration, Refugees and Citizenship Canada (IRCC). If the prevailing wage changes during the processing of an application, the employer can be asked to adjust the wage prior to the approval of the work permit.
• Regional variations. This year’s changes included more significant increases in certain occupations in some regions such as Calgary, and a six percent decrease in Montreal.

Looking ahead

Fragomen will report on further changes to the prevailing wage each year as they are announced.

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].