What is a Labour Market Impact Assessment?

In very simple terms, a Labour Market Impact Assessment (LMIA) is a document which you need to obtain from Employment Social Development Canada (ESDC) to prove that there are no Canadian citizens or permanent residents available to be hired for the job that you are looking to fill. For this reason, you need a positive LMIA decision in order to hire temporary foreign workers.

Generally, a foreign national wishing to work in Canada in an occupation that requires a work permit should apply for an LMIA from ESDC if the occupation demands one. A foreign worker does not need a LMIA if they are the holder of a valid Open Work Permit or are LMIA exempt, otherwise, a positive LMIA will be required.

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Who can apply?

Only a Canadian employer may make an application for an LMIA to Employment and Social Development Canada (ESDC). ESDC will issue a LMIA to an employer if it is confirmed that there is a need for a temporary foreign worker to fill labour and skill shortages and there are no Canadians or permanent residents available to do the job. The LMIA application process depends on the type of program you are applying for, these include:

Employer proof

The employer must receive the approval from ESDC by way of a positive LMIA before an offer of employment can be extended to the foreign worker. The employer must demonstrate to ESDC that:

  • The job offer is genuine
  • The job will have a neutral or positive effect on the Canadian Labour Market
  • The minimum job advertisement duration has been met
  • The minimum recruitment requirements have been met
  • No Canadian citizens or permanent residents are available to fill the position

Once the positive LMIA has been issued, the temporary foreign worker can then apply for a work permit supported by the LMIA.

How to prove LMIA business legitimacy

Job posting location

The first step to completing an LMIA application is the requirement to post your job vacancy on at least three different advertising platforms for a minimum of four consecutive weeks within the three months prior to submitting the application. These platforms could consist of employment websites (general, classified and specialized), local newspapers, community resource centres, local stores, employment centres, places of worship, and job fairs, just to name a few.

There are a few mandatory rules which an employer must follow:

  • Advertising on the Government of Canada’s Job Bank;

The other additional method of recruitment must target a different underrepresented group, these are:

  • Indigenous Persons
  • Vulnerable Youth
  • Newcomers*
  • Persons with Disabilities

* Please note that popular employment websites, such as Indeed, Kijiji or Trabajo, are not classed as specifically targeting newcomers as these are worldwide employment sites, therefore, they don’t target a specific audience, even though a large percentage of newcomers will commonly use these sites when seeking employment.

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Temporary foreign workers wages

Employers must pay the employee the prevailing wage. This is classed as the highest of either:

  • The median wage found on the Job Bank, or
  • The wage that is within the wage range that you are paying your current employees hired for the same job and work location, and with the same skills and years of experience.
  • Employers have to follow a list of job advertising information that must be shown on all of their postings. Information includes; required qualifications, skills and experience, wages, duties, location (includes full address) and contact details.

Length of advertisement

If you're looking to hire foreign workers, you'll need to advertise the position for a minimum of 4 consecutive weeks. This ensures that Canadians have a fair chance to apply for the job.

There are a few exceptions to this rule, such as if the position is classified as a senior executive or if the worker is already employed by the company and is being transferred to a new location. In these cases, employers can submit a shortened advertising period along with their LMIA application.

Once the advertising period has ended, employers can review the applications and choose the most qualified candidate.

  • The median wage found on the Job Bank, or
  • The wage that is within the wage range that you are paying your current employees hired for the same job and work location, and with the same skills and years of experience.
  • Employers have to follow a list of job advertising information that must be shown on all of their postings. Information includes; required qualifications, skills and experience, wages, duties, location (includes full address) and contact details.

Top recommendations for employers

  • Use at least 5-6 different methods of recruitment (including the Job Bank), and within these postings, target at least 3 out of the 4 defined underrepresented groups. Therefore, if one method of recruitment does not meet the requirement standards set by ESDC, you still have other postings available in order to meet these requirements.
  • Make sure all job postings read the same information. Being consistent is a key factor in not only meeting the job advertisement information requirements, but it also determines that the job posting is valid by targeting an audience that has the appropriate education, professional experience and/or skill level required for the occupation.
  • It is mandatory for an employer to invite all job seekers who rate 2-stars or more within the first 30 days of the job posting start date on Job Bank, however, I would recommend to invite all job seekers who have a profile rating of at least 2-stars within the first week and every seven days after that until the four consecutive weeks have been reached.
  • Doing this will not only prove that you are actively looking for prospective employees but you can also monitor the amount of anonymous job seekers who match your job prerequisites for your advertised position.
  • An Activity Report generated by Job Bank shows this data which has to be included as evidence of your recruitment efforts in your LMIA application submission.
  • Continuing on from the previous point, another requirement is that at least one of the job advertisements must be ongoing (after the four consecutive weeks have been reached) until a decision has been made on your LMIA application. As I mentioned, Job Bank provides you with an Activity Report, therefore, I would suggest that you keep this advertisement running as you can easily prove your continuing recruitment efforts using this report.
  • In every LMIA application, every employer has to provide evidence in support of their recruitment activities. This evidence should provide information on when, where and for how long the position was advertised. If using online platforms, I would recommend taking a screenshot of the advertisement being posted (showing the start date) and taking another screenshot after the mandatory four weeks. If postings expire after a certain length of time and can no longer be searched and found anymore, you could miss the opportunity to be able to provide evidence of the compulsory information - when, where and length of time.