Application of consequences where an employer is found non-compliant with the conditions – Assessing the severity of violation

The intent behind the assessment of the severity of a violation is to ensure that the consequence is proportionate to the condition breached and its impact on the foreign national and the Canadian economy. Proportionate consequences aim to promote employer compliance and to deter non-compliance.

The context for each violation is different. All relevant facts of the case should be considered by decision-makers when assessing severity. Points for each of the severity criteria should be determined on a case-by-case basis, using strong rationale for the total number of points accorded.

Five criteria are used to assess the severity of a violation. These five criteria provide a range in the number of points which officers can apply to each criterion. Points range from 0 points (criterion not applicable) to 3, 6 or 10 points, depending on the criterion. Officers should consider each of the five criteria while keeping in mind that all five may not necessarily apply to each violation. For example, competitive or economic benefit, criterion 1, may not apply to the condition of “being actively engaged in the business in which the offer of employment was made”. In these cases, 0 points may be ascribed to the competitive economic criterion.

The section below provides an overview of each of the five criteria and factors which officer’s may consider when ascribing points.

Criterion 1: The employer derived competitive or economic gain from the violation (0 to 6 points)

This criterion should be considered when the violation provided the employer with quantifiable economic gain—a company has benefitted financially by being non-compliant with program conditions—or a competitive benefit—an advantage over another employer or firm. If there is no clear benefit or gain, then this criterion does not apply, and 0 points should be ascribed.

Officers may wish to assess

• the economic gain derived from non-compliance (total gain for the employer)
• the money saved from non-compliance with program requirements
• if employer practices (action or inaction) led to a competitive advantage over other employers who were following the program rules

Examples of economic gain include:

• significant underpayment or non-payment of foreign worker wages as well as wages for overtime for an extended period of time;
• employer refusing to pay required benefits (for example, health benefits, transportation costs), as outlined on the offer of employment

Examples of competitive benefit include:

• evidence that an employer won a bid or contract by underpaying foreign workers.

While economic benefit may be more frequent, and more clearly applicable, competitive benefit may occur in some cases that are not easily quantifiable in dollars. Such cases should be considered carefully to establish a connection between the benefit and the violation.

Violations that affect foreign workers (“affected” is defined as a negative impact) are assessed individually, as separate violations. Therefore, when assessing this severity criterion for violations such as the underpayment of wages, points for economic gain or competitive benefit should not be assessed cumulatively regardless of the number of workers. For example, if an employer underpaid five foreign nationals, the amount of financial savings should be considered separately for each of the five violations and not for all the foreign workers affected collectively.

Officers may consider the amount of financial gain and the amount of time that has elapsed before the amount was repaid. For example, if there were a small underpayment of $500 total, and the employer repaid the amount to the foreign national a couple of months later (as soon as it was discovered), there would be effectively no financial gain for the employer.

Guidance on how to assess points

Officers may wish to consider the following factors in determining whether points should be ascribed at the lower end of the range:

• Whether the employer has repaid the money gained after an inspection initiated from the non-compliance and whether this minimizes the initial competitive benefit or economic gain.

Officers may wish to consider the following factors in determining whether points should be ascribed at the higher end of the range:

• Whether the economic or competitive benefit was derived as a result of a loss to the foreign national (i.e., was the foreign national underpaid or not paid for an extended period of time? was the foreign national forced to pay for items which were the employer’s responsibilities under the offer of employment?)

Criterion 2: The violation involved abuse of a foreign national (physical, psychological, sexual, financial) – (0-10 points)

Section R196.2, Abuse, defines abuse as

1. physical abuse, including assault and forcible confinement
2. sexual abuse, including sexual contact without consent
3. psychological abuse, including threats and intimidation
4. financial abuse, including fraud and extortion

Officers may consider if physical, psychological, sexual or financial abuse of the foreign worker is part of the violation. Officers may also wish to consider the impact of the abuse on the foreign worker, and whether the abuse is part of a pattern of behaviour over time, involving this foreign national, or if it is an isolated incident. Officers have to remember that there is a need for evidence, but it is not required to have a related criminal conviction.

Violations that negatively affect foreign workers are counted as separate violations for each foreign worker affected. In these cases, the assessment of this criterion should not include the total number of foreign workers involved since that could potentially lead to double-counting.

The following types of behaviour may provide evidence of these forms of abuse:

• Physical contact intended to cause feelings of intimidation, pain, injury, or other physical suffering or bodily harm.
• Force or threat was used to obtain participation in unwanted sexual activity / coercing a person to engage in sex, against their will.
• A pattern of coercive or controlling behaviour.
• The employer had control over the access of the foreign worker’s economic resources and the employer used this control inappropriately. Note that an underpayment does not amount to financial abuse automatically; officers need to take into consideration the complete situation and assess the severity of the situation.

Types of evidence which may be on file (This is not an exhaustive list):

• Information received during an inspection or investigation;
• Court documents or protective orders including: release, no-contact or bail orders, orders pending trial or appeal, recognizance orders or peace bonds, probation orders following convictions, conviction certificate, victim impact statements;
• Letter or statement from family services clinic, or report from a medical doctor or a healthcare professional;
• Sworn statement (affidavit),
• Police or incident report (related documents, reports indicating passports and travel documents were withheld and the police had to retrieve them);
• Hard copies of email or recordings of telephone messages;
• Affidavit from a friend, a family member, a neighbour, a co-worker, staff members of support agencies, law enforcement, etc.

Guidance on how to assess points

Officers may wish to consider the following factors in determining whether points should be ascribed at the lower end of the range:

• Once the abuse was discovered, the employer was responsive in obtaining assistance for the foreign worker (i.e., notifying police or health care professional).
• Once the abuse was discovered, the employer provided training to staff to prevent reoccurrence.
• Once the abuse was discovered, the employer developed policies and procedures that address situations of abuse in the workplace (e.g., steps to be taken if an employee or supervisor is aware of experiencing abuse).

Officers may wish to consider the following factors in determining whether points should be ascribed at the higher end of the range:

• The abuse was repetitive (i.e., pattern of behaviour).
• Once the abuse was discovered, the employer was not responsive in obtaining assistance for the foreign worker.
• Multiple types of abuse occurred.
• The abuse involves uttering threats to case death or bodily harm to an employee.
• The abuse involves trafficking in persons (or a related offence).

Criterion 3: Negatively affected the Canadian economy – (0 to 6 points)

A negative impact on the Canadian economy (it is important to note that a neutral effect on the economy should not be considered a negative one) may include employer actions that have resulted in a foreign national completing work that does not warrant a Labour Market Impact Assessment (LMIA) exemption and thus may have damaged the Canadian economy, such as work permits issued under the IRPR exempt from an LMIA that failed to offer a significant benefit to the Canadian economy (see information regarding work permits issued under Canadian interests – Significant benefit general guidelines [R205(a) – C10] for further guidance).

Where officers find issues with the accuracy of information provided by employers, they should consider if the work permit being inspected would have been issued had the correct information been provided. A work permit issued under an LMIA exemption designed to bring benefits to the Canadian economy or to further Canadian interests for which false information is provided may not have a positive impact on the Canadian economy. Canadian interests may not have been furthered, and Employment and Social Development Canada (ESDC) may have been precluded from assessing the labour market in the context of an LMIA application.

Officers are to examine the negative impact on the Canadian economy and Canadian interests, while ESDC is to examine the impact on the labour market. A specific analysis of the needs of the Canadian economy or Canadian interests is not required. The criteria of the LMIA exemptions themselves are sufficient evidence of the needs of the Canadian economy and Canadian interests. Therefore, where an individual is asked to engage in employment that does not qualify them for the exemption, meaning ESDC is precluded from a labour market analysis, as part of an LMIA application, there is to be sufficient evidence that a negative impact on the Canadian economy, on Canadian interests or on both has occurred.

Generally, where a work permit is issued under an LMIA exemption that specifies a certain occupation, but the employer then asks the foreign national to perform work in a lower National Occupational Classification (NOC) Training, Education, Experience and Responsibilities (TEER) category, a violation has occurred, which is deemed to have affected the Canadian economy or Canadian interests.

This criterion is not meant to assess the economic benefit or competitive advantage an employer may have gained as a result of a violation, since that is assessed under criterion 1, nor is it meant to assess the impact of the violation on the foreign worker, since that is assessed under criterion 2. The “injured party” in this criterion is the economy, not the foreign worker.

Guidance on how to assess points

Officers may wish to consider the following factor in determining whether points should be ascribed at the lower end of the range:

• Employer attempted to rectify the impact on the Canadian economy once aware of the violation.

Officers may wish to consider the following factor in determining whether points should be ascribed at the higher end of the range:

• The employer did not attempt to rectify the impact on the Canadian economy once aware of the violation.

Criterion 4: Employer did not make reasonable efforts to minimize or remediate the effects of the violation – (0 to 3 points)

This criterion does not include actions to prevent recurrence of the violation, which are assessed under criterion 5, described below.

In assessing whether the employer made a “reasonable effort” to minimize or remediate the impact of the violation, officers may wish to consider what actions, if any, were taken by the employer to minimize the impact on foreign workers or on the Canadian economy. Focus should be made on the effort and not just the results of the efforts. For example, if a foreign national has been underpaid, an officer may consider if the employer has repaid his employee or has made reasonable effort to repay him.

For procedural fairness, employers are given the opportunity to demonstrate any efforts they made to remediate the impact of the violation. This opportunity exists during the inspection, or an employer may submit new information on remediation efforts during the ‘opportunity to respond’ stage and this may be considered in ascribing points when considering new information submitted by an employer after a notice of preliminary finding has been issued.

The onus is on the employer to demonstrate that they have made reasonable efforts to minimize and remediate the effects of the violation. Officers may need to consider that in some circumstances employers may not be able to take actions to remediate the situation even if they are willing to do so (for example, the foreign worker’s contract has ended and has left the country and there is no way the employer can reach the foreign national to get certain information).

Guidance on how to assess points

Officers may wish to consider the following factor in determining whether points should be ascribed at the lower end of the range:

• Whether the employer rectified the wrongdoing, for example, partial wage/benefit/compensatory repayment was made to the foreign worker.
• Whether the employer attempted to reverse the situation even if unsuccessful
• Whether the employer’s efforts were timely.
• Some actions were taken but are incomplete or took action to mitigate and remediate after inspection started.

Officers may wish to consider the following factor in determining whether points should be ascribed at the higher end of the range:

• Opportunity to reverse the impact was possible, but the employer made no effort to minimize or reverse the impact of the violation.
• Scenarios of blatant disregard of program conditions from the employer
• When the non-compliance was discovered, the employer acted in such a way as to aggravate the effects of non-compliance.

Non-applicable: Reasonable efforts to pay back wages owed to a foreign worker may not be possible if that individual cannot be found. The employer may still be able to demonstrate that they made reasonable efforts.

Criterion 5: Employer has not made reasonable efforts to prevent recurrence of the violation (0 to 3 points)

This criterion is related to forward actions taken by the employer; for example, where an allegation or incident of abuse occurred, the officer may consider whether the employer took steps (e.g., providing training to employees, closely monitoring the situation and making sure that the violation will not occur again, etc.) to address it and prevent it from happening again. This criterion supports incenting employers to take action to prevent non-compliance even though they might have been potentially found in violation.

In assessing whether the employer made a “reasonable effort” to prevent reoccurrence of the violation, officers may wish to consider whether the employer has implemented practices or procedures to prevent the recurrence of the violation.

For procedural fairness, employers are given the opportunity to demonstrate any efforts they made to prevent recurrence of the violation. This opportunity exists during the inspection, or an employer may submit new information on preventative efforts during the ‘opportunity to respond stage’ and this may be considered in ascribing points when considering new information submitted by an employer after a Notice of preliminary finding has been issued.

The onus is on the employer to demonstrate that they have made reasonable efforts to prevent the recurrence of the violation.

Guidance on how to assess points

Officers may wish to consider the following factors in determining whether points should be ascribed at the lower end of the range:

• The employer provided training to staff to prevent reoccurrence.
• The employer took corrective measures to rectify the situation.
• The employer has made IT system or infrastructure changes to prevent recurrence.
• The employer has provided policy/company direction to employees to prevent the recurrence of violation.
• The employer has input sanctions and/or put the offending office on probation.
• The employer has requested the offending office/franchise to report on steps it has taken to prevent reoccurrence.

Officers may wish to consider the following factors in determining whether points should be ascribed at the higher end of the range:

• Scenarios of blatant disregard of program conditions from the employer, the employer was provided many opportunities to correct the mistake but actively took steps to prevent any corrections.
• When the employer discovered non-compliance, they acted in such a way as to aggravate future effects of non-compliance.
• The employer stated that no corrective action was necessary.

Non-applicable: Where it is not possible to make reasonable efforts to prevent recurrence because of the type of violation, 0 points may be ascribed. For example, if an employer is no longer actively engaged in the business for which the offer of employment was made (Item 15 on Table 1), reasonable efforts to prevent the recurrence of the violation may not be possible.