Employer Compliance – Collecting administrative monetary penalties and determining when employers are in default of payment

Subsections 209.996(4)(e) and (f) of the Immigration and Refugee Protection Regulations (IRPR) set out the 30-day period within which the administrative monetary penalty (AMP) must be paid.

Once the employer is determined to be non-compliant and an AMP amount is imposed, the designated officer sends an NOFD of non-compliance which includes the AMP amount to the employer. This NOFD requests payment in full 40 days from the date of the letter (30 days plus 10 days for ‘deemed received’). The NOFD also provides the employer with Immigration, Refugees and Citizenship Canada (IRCC)-Finance contact information to make a payment or to reach a payment agreement within the 30-day period.

Collection officers collect the debt owed to the Crown. The role of the collection officer in IRCC - Finance is to negotiate the terms of the payment agreement with the employer and to collect the payment of the administrative monetary penalty specified in NOFD by following IRCC’s collection procedures. Collection officers cannot negotiate the amount of the AMP with the employer after an NOFD is issued.

Immigration, Refugees and Citizenship Canada collects only those AMPs it issues and Employment and Social Development Canada (ESDC) collects AMPs it issues under A146(1.1) of the Immigration and Refugee Protection Act.

Refer to Legal References related to temporary residents/Employer Compliance section for information on the Acts and Regulations that govern collection activities.

When the employer is in default of payment?

In accordance with paragraph 209.996(4)(e) of the IRPR, an employer is considered in default if:

• the debt is not paid in full by the due date (30 days after the NOFD is deemed received by the employer); or
• a payment agreement is not made with the IRCC-Finance by the due date (within the 30 day period of time).

However, upon making a payment agreement with IRCC-Finance by the due date (within the 30 day period of time), if the employer fails to comply with the terms of that payment agreement on one payment, the employer is then considered in default as of the day after the missed payment is due.

To contact IRCC-Finance:

Email: IRCC.FINDTTC-DALCFIN.IRCC@cic.gc.ca

Toll free: 1-888-448-4426

Hours: Monday to Friday, 8 a.m. to 4 p.m. (ET)

A partial payment is considered a failure to comply with the terms of the payment agreement. Also, a non-sufficient fund is considered a failure to comply with terms of the payment agreement.

For the purpose of paragraphs 200(3)(h) and 203(2)(b) of the IRPR, once an employer is considered in default, the employer will stay in default for as long as the full AMP and interest are not paid.

Consequences of being in default of payment

Employers who are in default of payment become ineligible to hire foreign workers for which a work permit is required through the International Mobility Program (IMP) and the Temporary Foreign Worker Program (TFWP) until the amount of the AMP plus interest charges are fully paid.

If the employer is subject to an AMP only (i.e., no concurrent ban period was imposed) and is determined to be in default, the employer will be ineligible to hire foreign workers for whom a work permit is required under both the IMP and the TFWP until the full penalty amount is paid.

If the employer is subject to an AMP and a ban (i.e., a concurrent ineligibility period has been imposed) and is determined to be in default, the employer will only become eligible to use the IMP/TFWP after both the ineligibility period has passed and the full penalty amount is paid.

For more information on consequences of being non-compliant, refer to Public list of employers who have been non-compliant.

Case scenarios

When an employer is found non-compliant and is subject to an AMP, there are four possible scenarios, as described below.

Scenario 1: Employer pays the AMP in full within 30 days after the NOFD is deemed received

• The employer’s information in IRCC’s financial system and in the Global Case Management System (GCMS) must be updated to reflect the full payment of the AMP.
• The list of employers who have been non-compliant must be updated without delay.
• If the employer is not subject to a ban, they continue to access IMP and TFWP.

Scenario 2: Employer and IRCC-Finance enter into a payment agreement and the agreement is upheld

• IRCC-Finance formalizes the payment agreement and sends it to the employer by email;
• The employer is required to respond and to acknowledge their agreement with the terms and conditions.
• If the employer pays the AMP in full as described in the payment agreement, the employer’s information in SAP and GCMS and the list of employers who have been non-compliant will be updated to reflect the payment of the AMP.
• If the employer is not subject to a ban, they continue to access the IMP and TFWP.

Scenario 3: Employer and IRCC-Finance enter into a payment agreement and the agreement is not upheld

• If the employer is in arrears of one payment after entering into an agreement, they are considered to be in default.
• Once the employer is in default of payment, they will become ineligible to access both programs: TFWP and IMP.
• The employer’s information in IRCC’s financial system, in GCMS, and on the list of employers will be updated to reflect the non-payment of the AMP and the ineligibility status of the employer.
• Based on IRCC-Finance’s internal guidelines, IRCC may refer the recovery process to the Canada Revenue Agency’s (CRA) refund set-off program, which results in the seizure of income tax refunds or tax credits. The seized funds are applied to the AMP balance until it is paid in full.
  • Set-off is defined as withholding of monies from a government refund or other federal payment due to debtor and applying those monies against debts owing to the Crown by that debtor.
• Once the AMP is paid in full, the employer resumes the privilege of using the IMP and TFWP.
• If the AMP is not paid in full, the employer continues to be ineligible until the full AMP amount is paid.

Scenario 4: Employer does not pay the AMP in full and does not enter into a payment agreement within 30 days

• If an employer pays a portion of the AMP or does not make any payment, and does not enter into an agreement with IRCC within 30 days of the NOFD being deemed received; the employer will be in default and is ineligible to access the IMP and TFWP until the AMP amount is paid in full.
• Employer’s information in IRCC’s financial system, in GCMS, and on the list of employers will be updated to reflect the defaulting status of the AMP.

How to determine the due date of an AMP

In accordance with section 209.996(4)(e)of the IRPR, an AMP must be paid by the employer within 30 days after the day on which the NOFD is received, unless a payment agreement for the payment of the amount and interest has been reached within that same period.

As per subsection 27(5) of the Interpretation Act, when calculating the 30 days period of time within which the employer must have paid the AMP or have reached an agreement for the payment of the AMP and the interest, by combination of R209.996(4)(e) and R209.996(6) of the IRPR the day on which the NOFD is deemed to have been received is not counted in the computation of time

Example: If an NOFD is sent on Friday, September 30, 2016, the 10-day period does not include September 30, 2016.Therefore, the date it is deemed to have been received is Monday, October 10, 2016 to allow the full 10-day period.

In the example above, October 10 is the deemed date of receipt. October 10 is not counted in the computation of time for the 30 days period within which the employer must pay the AMP or have reached an agreement. Day 1 will be October 11, 2016, and the last day the employer will have to make the payment or conclude an agreement is November 9, 2016. On November 10, 2016 the employer will be in default if the AMP is not paid in full or an agreement has not been reached.

As per section 26 of the Interpretation Act, if the last day of the 10-day period is a holiday then the next day that is not a holiday shall be the expiry date.

If November 9, 2016 had been a holiday, the employer would have had until November 10, 2016 to make the payment or reach the agreement.

The definition of “holiday” is found in subsection 35(1) of the Interpretation Act.

Deferment of payment

A deferment of payment does not mean the debt is erased in any way. Deferment of payment means an arrangement within a payment agreement that can be made if the employer, in acceptable exceptional circumstances, cannot make a few payments. Interest will still be charged in that period of time. The impact would mainly be that the employer would not be found in default.

The terms of the payment agreement may include provision for deferment of payment, in the following circumstances:

• employer cannot afford to pay the full AMP amount within 30 days;
• force majeure: flood, fire, earthquake, etc.;
• extenuating personal or family circumstances (e.g., illness, death);
• employer unable to act or to have someone else act on their behalf;
• other circumstances beyond the employer’s control.

However, the payment agreement should not allow for deferment of payment in the following circumstances:

• past failure to respond: employer was unreachable; employer did not return calls or did not respond to collection letters for a sustained period of time;
• evasive engagement or lack of employer cooperation;
• employer made false or misleading representation, statement or declaration in relation to the AMP payment;
• employer failed to proceed diligently with the AMP payment;
• employer in breach of the terms of the payment agreement/schedule with no acceptable explanation to justify the failure.

The Accounts Receivable Supervisor at IRCC-Finance is responsible for approving all deferments. If a deferment of payment is accepted, the employer remains eligible during this period of time unless the employer is subject to a ban.

Collecting interest

A payment agreement with an employer shall provide for interest to be charged on AMPs in accordance with the Interest and Administrative Charges Regulations (the regulations).

In accordance with subsection 5(1) of the regulations, the interest on the AMPs is calculated and compounded monthly on the amount owing at the average Bank of Canada rate, plus three percent. This rate is the Payment on Due Date interest rate.

The accrual of interest on program debts will cease when the debt due to the Crown is paid in full or where there are circumstances beyond the control of a debtor, and those circumstances are caused by events that are external to the department (e.g., postal strike, delays in the processing of a payment or other error by a financial institution, death of a debtor, etc.), as set out in subsection 9(2) of the regulations.

Roles and responsibilities

Collection and monitoring of AMP payments is a coordinated effort between Case Management Branch (CMB) and IRCC­ Finance, and is predominately led by IRCC Finance. An employer is notified of an AMP through the NOFD, which will inform the employer of the AMP amount, details on how to make payment, and IRCC Finance contact details if the employer wishes to enter into a payment agreement.

When a designated CMB officer establishes that an employer has committed a violation, the officer will:

• send an NOFD to the employer – with a 30-day timeline in which the employer is requested to pay the AMP. The NOFD is deemed received by the employer 10 days after the day on which it is sent out. The NOFD provides, among other information, a contact email and telephone number at IRCC-Finance who is responsible for collecting the AMP and negotiating payment agreements;
• If the employer is subject to an AMP and ban, update GCMS by changing the status field from “Active” to “Inactive” and entering the date on which the ban period ends;
• If the employer is subject to an AMP only, update GCMS by entering officer’s notes in the Employer Remark section (Employer will remain eligible to employ foreign nationals for whom a work permit is required, unless they have not paid the AMP or are not complying with a payment agreement if one was entered into within the 30 day period.)
• When an employer is found in default and is ineligible to hire foreign workers, CMB will change the status of the employer in the Organizations and Entities Tab from ‘active’ to ‘inactive.’ This change will only be made on employers in GCMS where there is sub-type ‘Regulatory Employer’ or ‘Regulatory Employer – Branch’ as this indicates that the employer created the account through the Employer Portal. Once the AMP is paid in full, update GCMS by changing the status field from “Inactive” to “Active”.
• send a request to IRCC Communications to update the list of employers who have been non-compliant on the IRCC website including any subsequent changes to the employer’s status (if status changed from ineligible to eligible or vice versa).
• If the employer is subject to an AMP, complete the Account Receivable Establishment form FIN 0009 and send it to Loans and Accounts Receivable/IRCC-Finance via email to initiate an AMP collection.
• update GCMS (Remarks section) with any relevant information regarding the employer who is subject to an AMP and/or ban, or is in default.

When IRCC collection officer receives information from CMB on employers who are subject to an AMP, they will:

• implement IRCC-Finance’s standard operations collection procedures for AMP payment.
• If employers contact IRCC-Finance to enter into a payment agreement within the 30-day period after an NOFD is deemed received, negotiate with the employer the terms of the agreement, including due dates, method of payment, interest.
• accept appropriate forms of payment, as supported by the Receiver General, for the settlement of accounts receivable (AR).
• For the purpose of AMP collection, input the following information in SAP:
  • Employer’s name
  • Business number
  • Employer’s address
  • Primary contact person
  • Primary contact person’s email Address and telephone number
  • Collection Officers’ notes regarding calls to employers who have or have not made regular payments within the 30-day period or as required by an AMP payment agreement.

Communication between IRCC-Finance and CMB

It is imperative that IRCC-Finance communicate immediately with CMB in the following situations:

• The employer pays the AMP in full: IRCC-Finance advises CMB without delay by email. CMB will then update GCMS accordingly and will send a request to IRCC Communications to update the list of employers on the public website.
• The employer is found to be in default. The employer consequently becomes ineligible to hire foreign workers. IRCC Finance should advise CMB immediately so that the information is reflected in GCMS and the list of employers.
• The employer is found to be in default; but they pay the AMP in full afterwards. As a result, they become eligible again to hire foreign workers. IRCC-Finance informs CMB immediately so that the information can be reflected in GCMS and the list of employers.

Communication between IRCC and ESDC/Service Canada (SC)

Case Management Branch must inform ESDC/SC immediately when an employer pays the AMP in full or is found to be in default of payment. For more information on how and when to communicate with ESDC/SC, refer to program delivery instructions Public list of Employers who have been non-compliant.

How the default policy will be applied in case of corporate mergers or acquisitions?

If the company against whom an AMP was assessed is merged with or acquired by another, the AMP becomes a liability of the new (larger) company, payable by it as of the date specified in the notice of final determination. Default would be calculated as of the date the AMP was payable in accordance with the regulations.