Canadian HR Reporter

By Julie Lessard I n today's fi erce competition for global talent, employers are designing inno- vative compensation and benefi ts sys- tems that strike the right balance between internal equity and external competi- tiveness. While being creative in fi nding ways to reach these objectives, employers should believe equity is critically impor- tant because perceived unfairness can adversely aff ect any organization's ability to attract and retain talent. While the principle of equity remains cen- tral, employers recruiting and hiring tem- porary foreign workers (TFWs) are oper- ating on a whole new level of complexity when dealing with the issues of fairness and compliance. Temporary foreign workers Employers using the Temporary Foreign Worker Program (TFWP) or the Interna- tional Mobility Program (IMP) must com- ply with government-imposed wage require- ments that may substantially diff er from their normal practices and corporate philosophy in terms of wages and compensation. To receive a positive Labour Market Im- pact Assessment (LMIA) under the TFWP, employers must declare they "will comply with the prevailing wage requirements and agree to review and adjust, when applicable, the TFWs wages, at least annually, to ensure he/she continues to receive the prevailing wage for the occupation and region where he/she is employed." e prevailing wage is defi ned as the highest of either the median wage listed on Canada's Job Bank or the wage that is within the wage range the employer is paying cur- rent employees hired for the same job and work location, and with the same skills and years of experience. e median wage on Job Bank is calcu- lated based on Canada's offi cial system clas- sifying jobs into occupational groups, the National Occupation Classifi cation (NOC) system. After identifying the NOC that best suits the duties and the requirements for the po- sition off ered, the wage that must be used is, at a minimum, the median wage, even if the job off ered is entry-level (except in Quebec where the wage requirement is calculated diff erently). If the job off ered requires ad- ditional experience, the salary must meet the higher scale. The median wage includes only the guaranteed wage, excluding specifically overtime hours, tips, benefi ts, profi t shar- ing, bonuses, commissions or other forms of unguaranteed wages. e details of all categories of work per- mits that can be issued under the stream of the IMP are outside the scope of this article. Nonetheless, it is important to note that since program changes were introduced in 2014, the prevailing wage requirement equally applies to TFWs entering Canada under the Intra-Company Transferees or Specialized Knowledge Category. Impact on employers While the median wage is based on statis- tics for specifi c occupations in specifi c geo- graphic locations, employers may need to increase the off er to a TFW so it meets the prevailing wage requirement. is is especially true for entry-level po- sitions where the employer participating in the TFWP must still pay the median wage. In such cases, internal inequity between Canadian and foreign workers can result from the employer's eff ort to comply with the TFWP requirements. In the context of the TFWP, the median salary payment requirement rule is applied to the letter. is means employers are un- able to obtain positive LMIA opinions if the prevailing wage is not met, eff ectively forcing them to create internal inequity be- tween TFWP and Canadians, particularly at entry-level positions. e absurdity of the situation could be disputed, as it was successfully done in the 2016 Paturel International Co v. Canada (Minister of Employment and Social Devel- opment) where the Federal Court ruled the prevailing wage was too high in the unique circumstances of this case and it was not representative of the wages paid by employ- ers in the region. However, this decision has not changed the adjudications practice at the adminis- trative level of the TFWP. Meanwhile, few employers have the re- sources and perseverance required to have such situations heard in Federal Court. Employers' strategies to off er attractive packages, merit-based compensation and creative incentives can also fi re back in the context of the current regulation. Under the current rule, any program putting greater emphasis on bonuses or compensation tied to performance rather than fi xed salary, programs favouring fl ex time, lieu time, overtime or any other pol- icy based on unguaranteed, merit-based wages may be found non-compliant with the prevailing wage requirements under the TFWP. e result is the creation of two catego- ries of workers: local workers and TFWs. Ensuring compliance On Nov. 1, 2016, the NOC 2016 was intro- duced to update the NOC 2011 with new market analysis, and prevailing wages were updated for many occupations on the Job Bank website. Such changes can have an impact not only on future applications for TFWs but also on existing immigration-based work permits already issued. In LMIA applications, employers not only declare that they actually comply with the requirement, they undertake the obligation of future compliance, declaring they will ensure the TFW will continue to receive the prevailing wage for the occupa- tion and region where he is employed. Accordingly, to be compliant under the TFWP, employers have a positive duty to identify the potential impact of the prevail- ing wages update on existing LMIA-based TFWs. If the new median wage is higher than the wage previously included on the LMIA or the employee's actual wage, the salary may need to be increased — even if this could lead to a more favourable treatment of the TFW than other workers similarly em- ployed by the organization. ese changes will also impact the eli- gibility criteria for applications under the Intra-Company Transferees/Specialized Knowledge Category. Best practices e issues raised above are only the begin- ning of a profound discussion about addi- tional obligations imposed on employers across the country with respect to a non- Canadian workforce. Yet another illustration of the additional burden on employers is any salary change including routine annual reviews should be disclosed in writing to Service Canada for all LMIA-based applications. Failure to do so could lead to non-com- pliance if the employer is audited. Traditionally, systems in place for com- pensation and salary conformity verifi ed compliance with legislation in areas such as labour standards, equal pay, labour rela- tions and human rights. Today, employers need entirely new hu- man resources toolkits to ensure they are also in compliance with immigration-relat- ed legislation. Julie Lessard is a partner specializing in business immigration law at BCF Business Law in Mon- treal. She can be reached at julie.lessard@bcf.ca or, for more information, visit www.bcf.ca. Employers need entirely new human resources toolkits to ensure they are in compliance. IMMIGRATION FEATURES Focusing on fairness and compliance when compensating temporary foreign workers Credit: Mark Blinch (Reuters)

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