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Employer Compliance Review and ESDC Inspection document checklist

Preparing for an Employer Compliance Review (ECR) or an on-site inspection by ESDC to audit compliance with Canada’s Temporary Foreign Worker Program, April 27 2015. Prepared by Betsy Kane, C.S. Capelle Kane Immigration Lawyers

Government’s efforts to monitor employer compliance with the temporary foreign worker program now comes in two formats; i) a paper based employer compliance review (ECR) and ii) by way of on-site inspections. While the ECR process has been in place for several years, few Canadian employers have been subject to on-site inspections.

Currently, ECR’s are commenced once an employer makes an application for a Labour Market Impact Assessment (LMIA) and ESDC choses to trigger a compliance audit of the company in regard to formerly issued positive LMIA or LMO decisions. This results in the employer’s pending LMIA application being placed “on hold” until Service Canada has completed their audit. In addition to responding to the ECR and the request for documentation, employers will have to consider other work permit options for the foreign worker until the ECR is completed and passed.

The ECR starts when the Integrity Service Branch contacts the employer by telephone to inform them that they have been selected for a compliance audit. The Integrity Program Officer then follows up by letter that details the previous LMIA or LMO decisions under review and provides a deadline to submit the information. Don’t be shy about asking for an extension of time to comply. Especially, in cases where the supporting documentation is not easily accessible or if translations are required.

Below is a list of documentation and my comments in regard to the information that is typically requested in the course of a full-blown ECR. The documentation enumerated below has been requested in cases where the foreign workers have been in Canada from one week to three years.

  1. Copy of complete LMIA application and all supporting documents such as; advertisements, advertisement receipts, screen shots of on-line advertisements such as on Linked-in or Kijiji or other on-line venues, e-mail to and from advertisers. Note: Integrity Services Branch employees do not have access to the entire LMIA application and do not know what the employer filed with Service Canada at first instance;
  2. Job descriptions and all NOC codes applicable to the position;
  3. Copies of resumes and recruitment summaries for all applicants (Canadian and foreign) who applied for the position and were deemed not suitable or not qualified (must be redacted);
  4. Work history, pay stubs, work schedules/employee logs for wages paid on hourly basis);
  5. Confirmation of first date and last date worked in Canada;
  6. Time sheets including proof of overtime hours and when overtime payments are invoked and at which rates and proof of any banked overtime and time off granted in lieu of overtime. Copies of any employment agreements made at or after LMIA issuance regarding time off in lieu of overtime;
    Note: Rates may be different for weekends or statutory holidays
  7. All payroll records which including all source deductions and benefits paid;
  8. Proof of all vacation and sick days taken by foreign worker;
  9. Proof of company’s standard benefits package at the date of filing LMIA and at the date of inspection/ECR;
  10. Proof of health insurance, travel and accident-benefits insurance coverage for specific foreign worker. Note: Need proof of payment by the company for specific foreign worker and not general company wide policy. This may be indicated on payroll summary or written confirmation on date employee was enrolled with the insurer(s);
  11. Proof of transportation expenses (especially for foreign employer dispatching employee to Canadian customer) and reimbursement to foreign worker, if applicable. Proof of who paid transportation expenses (foreign employer or Canadian customer depending on terms of the service agreement). Copies of flight itineraries and credit card receipts indicating payor, taxi chits and proof of reimbursement to foreign worker;
  12. Any benefits noted in LMIA, such as relocation expenses, per diems, out of pocket travel expenses (including proof of payment to the foreign worker by way of cheque(s) as cleared from employer’s bank account or payroll provider);
  13. Any new job descriptions including dates when promotions or new job description(s) or lesser duties took effect;
  14. Proof of customer/sub-contractor relationship by way of letters, signed contracts or purchase orders including terms and conditions of any standard sales agreement as these may provide details as to the terms of employment which will help employer explain wages and working conditions;
  15. Proof of any follow up post-LMIA issuance correspondence sent to ESDC regarding the LMIA as issued (such as letter to advise that the foreign worker has left the position or is no longer required, including fax confirmation sheets to prove transmission) or change in duties but same NOC code or minor variation in salary;
  16. Record of Employment for any foreign worker who has left the employer;
  17. Proof of any severance payments;
  18. Proof of any corporate non-compliance matter such as Ministry of Labour complaints and resolutions, work orders and compliance thereto, sexual harassment complaints, etc., as they pertain to the attestations made by the employer in regard to compliance with all federal and provincial laws that regulate employment;
  19. Currency conversions for foreign wage rates at the date of filing LMIA application. Note: If not available check the Bank of Canada 10 year currency converter at http://www.bankofcanada.ca/rates/exchange/10-year-converter/
  20. Printed copies of the prevailing wages for occupation/NOC/province/city/as of the date of LMIA submissions. Keep hard or electronic copy on file to prove the wage rate at the date of filing. Can give perspective if there is discrepancy from LMIA and actual wages/benefit paid;
  21. Copy of WSIB (Worker Safety Insurance Board http://www.wsib.on.ca/ or provincial counterpart) Clearance Certificate as of the date of applying for LMIA or proof of the company’s payment of all work place safety insurance premiums as of the date of filing the LMIA. Ensure employer is covered by worker’s compensation scheme in province of destination by either host employer or parent company’s accident benefit policy;
  22. If provincial worker safety scheme not applicable, proof of employee accident benefit coverage in Canada and worldwide, if applicable;
  23. Proof of additional benefits not listed on the LMIA which may have been included in salary calculation provided by employer (i.e. employer pension contributions, employer tax contributions, payment for travel time);
  24. Copies of work permit and stamps in Foreign Worker’s passport in the event foreign worker entered as business visitor either before or after LMIA/WP issued or expired;
  25. Copies of corporate articles of incorporation and corporate organizational charts for parent, subsidiaries and affiliated companies;
  26. Explanation provided in writing to the ISB/Compliance officer of the law in Canada pertaining to authorization to work in Canada without a work permit or without LMIA, such as in the category of business visitors/after-sales service personnel. Document all entries as business visitor, LMIA exempt worker or LMIA covered work permit; show copies of port of entry submissions, applications for LMIA exemption or entries as business visitor; include copies of information as explained by CIC or in IRPA/IRPR;
  27. Any documents not generated in English or French should be officially translated and the translator’s affidavit included with the documents;
  28. Be prepared to furnish all corresponding information above for Canadian employees in the same position with the company;
  29. Letter confirming whom the third party representative is for CIC, ESDC or CBSA enforcement purposes. Letter should confirm law firm and names lawyers on record for the company;
  30. If low-wage LMIA, proof of accommodations and health care provided or proof that affordable accommodations exist or were assisted with.

Responding to an Employer Compliance Audit is not an easy task. It takes hours to compile, reconcile and prepare submissions in regard to the employer’s compliance history as they pertain to the governing regulations.

If you are facing an ECR, engage counsel early and before you submit internal records to Service Canada. Employers are entitled to legal counsel during this process and should be aware that some Integrity Service Officers discourage employers from using legal counsel (just as CIC advises that legal representation is not required to file applications with CIC). An employer’s compliance with the Temporary Foreign Worker Program is key to enabling it to access foreign worker’s for human resource needs in future. The government has the power to ban an employer from accessing the program for two years and can list the employer on the government’s blacklist, thereby damaging reputations and revenues along the way.

Audits have yet to be initiated by CIC further to the new compliance form (IMM 5802) that must now be submitted prior to applying for LMIA exempt work permits. Once can surmise that the information CIC requires will mirror that requested by ESDC during ECR’s.

My next blog with canvass the options employer’s have when a foreign worker is required in Canada before ECR process is completed. Information on the Compliance Program is found at: http://www.esdc.gc.ca/eng/jobs/foreign_workers/employer_compliance.shtml