Canada Enforces Stricter Rules on Foreign Worker Sponsorship

Canada has implemented stricter regulations under its Temporary Foreign Worker Program (TFWP), specifically prohibiting Employers of Record (EORs) and staffing agencies from sponsoring foreign workers for positions managed by third-party businesses. The revised Labour Market Impact Assessment (LMIA) rules, enforced by Employment and Social Development Canada (ESDC), will evaluate the entity that exercises actual control over the employment relationship.

This includes determining who supervises the foreign worker during their employment. Consequently, staffing agencies may not qualify as employers for LMIA applications if another company directs the foreign worker's daily activities.

Additionally, the Canadian government clarified that temporary foreign workers cannot be classified as independent contractors to evade employer obligations, including payroll and tax responsibilities. EORs can still operate under other employment arrangements, but those lacking necessary control over the worker's employment relationship may not qualify as sponsoring employers for LMIA applications.

These changes are part of Canada's broader efforts to enhance oversight of temporary migration and employer-supported immigration pathways.