How Much Does LMIA Cost?

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15 Feb 2022

LMIA is an acronym for Labour Market Impact Assessment, which was formerly referred to as an LMO, labour market opinion. It is a document that an employer in Canada needs before being able to hire a foreign worker.

A positive LMIA from the Service Canada (ESDC – Employment and Social Development Canada) is called a confirmation letter.  It is possible for a company to hire without a LMIA but one is usually required. Here, we will look at the processes in which you can hire foreign workers without or with a LMIA, the requirements for getting one, the cost, and time it takes.

Cost of an LMIA Application

The cost to process a LMIA has increased in recent years and now the application fee is $1,000. This is an increase from $275 from the old LMO cost and also the fee needs to be paid for each worker that is required.

Hiring without an LMIA

If you are unable to obtain an LMIA or would like to know a process of hiring workers for the short term without an LMIA, then you can apply for the International Mobility Program. This program helps you to hire certain foreign workers, without getting an LMIA. This program does have its stipulations, which requires you to pay an employer compliance fee and to put in the employment offer, to the employee, through the IRCC Employer Portal.

Hiring if you need an LMIA

The Temporary Foreign Worker Program allows you to hire a foreign worker temporarily to overcome the labour and skill shortage. Service Canada will issue you an LMIA if you meet the program’s requirements and undergo an interview with a program officer, and you will need to give a copy of the confirmation letter to each of your temporary foreign workers and ask all of them to apply for a work permit.

Requirements for an LMIA

LMIA shows that the company has a position that cannot be filled by a Canadian candidate. There needs to be proof that the company advertised and tried to hire in the local market, but with no person fitting the job description or a lack of labour force for that position, the company had to look for a person abroad.

The company will have to send the ESDC proof that the job was advertised in the ‘Canada Job Bank’ website for at least four weeks before submitting the application.

Employers applying for an LMIA also have to demonstrate at least two other different methods they used to recruit people for the position, and, in certain cases, evidence will be required that they pursued underrepresented groups of Canadians. The job position should require the language to be only English and French for it to be applicable.

Employers can also be inspected at a later date to assess their compliance after a work permit has been issued. The LMIA application is only applicable for the employee for that region, company, and position. An employee cannot change companies or move locations with the same LMIA.

Categories of Application

The LMIA is divided into two categories depending on the wage of the employee, which are classed as high wage workers and low wage workers. The category in which a prospective worker falls under depends on whether the remuneration for the particular job is below, equal, or above the territorial median wage. If it is equal or above, then the company needs to apply for a high-wage workers LMIA. If it is below the median, then the company will be looking at applying to hire a low-wage worker.

Hiring High Wage Workers

Usually, when a company wants to hire a high-wage worker then they need to submit a transition plan to get a positive LMIA. This plan exists to make sure that the employer plans to decrease their dependency and reliance on foreign labour in favour of Canadians.

This plan includes a form that needs to be submitted with the LMIA application. It asks the employers to provide three distinct actions the company will take to recruit, train or manage Canadians for their job positions, specifically to look at ways of hiring underrepresented groups, like new immigrants, indigenous people, disabled, etc. Alternatively, they could require the company to highlight one major action they will take to help facilitate their foreign worker to get a permanent residence.

Low-Wage Workers

Canadian employers who want to hire a low-wage worker do not need to submit a transition plan with their application for a LMIA. They are however subject to other regulations that are not applicable for high-wage workers.

If a company hires low-wage workers, then there Is a limit to the number of low-wage temporary foreign workers that a company can hire. Canadian employers who have more than 10 employees are not allowed to hire more than 10% of their current workforce from abroad. This limit decreases as the years pass so that the company can move from hiring a foreign workforce and move towards hiring a Canadian workforce for the positions in their company.

Time Taken For A LMIA Application

The time taken to process an LMIA can vary depending on the job, industry and the location that the application is destined for. It can take from a few weeks to even a few months. The ESDC has recently vowed to process specific LMIA applications within 10 business days. These applications include:

  • LMIA applications for skilled trades, which are the occupations in highest demand
  • Top 10% occupations, which are the highest-paid positions in the country
  • Applications for short work permits, which normally lasts 120 days or less

A LMIA is only taken by a company that feels that there is no other recourse for them but to hire someone from outside the country. It is not an easy process and there are difficulties, but it is a very stringent method to make sure that the companies prioritise looking within their own borders to fill the position. It does this while also providing avenues for companies to hire from abroad if they don’t find a suitable candidate within the country.

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