Hiring Foreign Employees as a Canadian Company

Technological leaps and friendly immigration avenues have made hiring foreign employees a reality for Canadian businesses today. Canada’s immigration system specifically caters to economic immigration, allowing skilled workers to immigrate as permanent residents or temporary foreign workers- a major plus for those looking to access the global talent pool.

Moreover, global connectivity and technological leaps have improved the possibilities of remote work and cooperation across physical borders and barriers. With more work being accomplished on desks, a company can have its workers spread out worldwide without compromising efficiency.

The article looks into this changing scenario around Canadian employment and the hiring of foreign employees.

Why Hire From Outside Canada

There are many reasons why Canadian companies are warming up to the idea of hiring from outside Canada. Domestically, rising inflation and a tight labor market, characterized by a decreasing number of unemployed for every vacant position, have challenged hiring in Canada for many firms. In December 2022, the country observed an unemployment rate of 5.0%, just marginally more than the record low of 4.9% set in June/ July.

The tight domestic labor market leads to more competition for skilled workers and is partly responsible for fuelling inflation as firms increase wages to attract candidates. Hiring from outside Canada can help companies cut costs while hiring equally talented individuals.

The selection pool is also larger than ever, with more qualified immigrants applying to Canada’s immigration programs. Employers can find many profiles and roles within the Express Entry pool without hassle.

Besides financial considerations, hiring outside can also help companies resonate with different demographics- a must in Canada’s multicultural society.

Hiring Foreign Workers

Canada is strict on bringing foreign workers into Canada. Usually, candidates must qualify through one of the Federal or Provincial programs for permanent residency or come as Temporary foreign workers once a Canadian employer can justify the employment with a positive Labour Market Impact Assessment (LMIA).

In cases where an employee’s physical presence is not necessary, a Canadian employer can opt instead for a Remote work arrangement through an Employer of record (EOR) or a Professional Employer Organization (PEO)- more on that later.

Temporary Foreign Worker Program

The program allows Canadian employers to hire Temporary foreign workers where no Canadian citizens or permanent residents are available.

The program has streams for high and low-wage positions, Caregiver positions, Agriculture, the Global Talent Stream, and Academic positions.

However, an Employer is restricted from hiring foreign workers strictly as a cost-saving measure, as the position must first be advertised to the Canadian public before considering a foreign worker. The program also has certain obligations for an employer to prove their legitimacy and develop a transition plan and a positive Labour Market Impact Assessment.

What is an LMIA?

The Labour Market Impact Assessment (LMIA) is an assessment that Canadian employers must undergo when hiring foreign workers.

A positive LMIA shows the necessity of a foreign worker and confirms that no Canadians are being overlooked for the same position.

An LMIA application costs $1,000 for every position requested and has certain exemptions for families hiring foreign caregivers or those requiring medical assistance.

Employer’s Responsibilities When Hiring a Temporary Foreign Worker

When hiring a Temporary foreign worker, it is your responsibility as an employer to:

Prove the Legitimacy of your Business and Job Offer

Come up with a Transition Plan- this is a mandatory requirement for those hiring for high-wage positions. It should reflect your commitment to recruiting and training Canadian citizens and permanent residents while reducing your reliance on the Temporary foreign worker program.

Exemptions are made for caregiver positions, Seasonal agricultural workers, specialized occupations, and limited-duration jobs that cannot be transitioned to a Canadian or permanent resident.

Recruit and advertise the position to Canadians or permanent residents. The regulations specify that employers must conduct at least three recruitment activities before applying for an LMIA.

Ensure that the wages of the temporary foreign workers are similar to Canadian employees hired for the same job.

Ensure that duties performed by temporary foreign workers correspond to the occupation they were hired for.

Comply with Health insurance and workplace safety regulations.

Provide a copy of the employment agreement to each temporary foreign worker.

How to apply for an LMIA

An application for an LMIA can be made via the LMIA Online Portal or physically through an LMIA processing center. The process can vary with each stream.

Remote work

The Covid pandemic was a watershed moment in proving the feasibility of remote work. The practice has skyrocketed in popularity since, especially in the tech field, with many firms continuing the trend long after the lockdown measures.

The ability to coordinate employees working across different regions and time zones also opens up the possibility for remote foreign workers.

Today, Tech companies in Canada and the USA regularly hire remote workers across borders. The established practice is to set up an employment partner in another country, usually an Employer of record (EOR) or a Professional Employer Organization (PEO).

The two are very similar entities whose primary function is to enable the hiring of workers abroad on behalf of an employer. Their only difference is that an EOR employs workers on the employer’s behalf, while a PEO requires the employer to own a legal entity in the country.

A Canadian firm can set up these arrangements to employ foreign employees who can work remotely and coordinate with their Canadian partners.

Conclusion

Hiring foreign employees as a Canadian company will become more widespread in the near future with increasing immigration targets and technological advances supporting remote work. Canadian companies now have access to a broader array of skillsets, talents from all over the world, and the framework to leverage it. The beneficiaries also include thousands of skilled remote foreign workers who now have access to professional opportunities without the need to immigrate.