Administrative Monetary Penalty (AMP) Regime Comes into Force in Canada on December 1, 2015
On December 1, 2015, changes to the Immigration Refugee and Protection Act (IRPA) will come into effect and employers of temporary foreign workers (TFWs) will be subject to a new regime of administrative monetary penalties (AMPs). The new regulations will impose a wide array of monetary penalties and government inspections on non-compliant employers. The AMP regime will apply to non-compliant employers under both the International Mobility Program (IMP) and Temporary Foreign Worker Program (TFWP). The AMP regime is set out in regulatory amendments, which are available here.
Employment and Social Development Canada (ESDC) and Citizenship and Immigration Canada (CIC) officers will confirm employer compliance with conditions set out under the IMP or TFWP, respectively, through a document-based Employer Compliance Review (ECR) or an Inspection. Inspections and ECRs can occur within the six-year period starting on the first day of employment for which a work permit is issued. Inspections can include a compliance review of all employer conditions imposed under the IMP or TFWP.
If employers are non-compliant, and there is no justification for their non-compliance, CIC or ESDC must issue a notice of preliminary finding to the employer. An employer will have 30 days from the date of receipt of the notice of preliminary finding to submit a written response. Ultimately, a notice of “final determination” will be issued to employers if they are found to have failed to comply with a condition, and the failure is not justified under IRPA.
If an employer is found non-compliant, they can be subject to a warning, and then administrative monetary penalties ranging from $0 to $100,000 per violation. An employer can receive cumulative AMPs for multiple violations. These cumulative penalties may total to a maximum of $1 million. Non-compliant employers can also be subject to variable ban periods of 1, 2, 5 or 10 years or a permanent ban. Prior to December 1, 2015, the only statutory consequence that could be applied against non-compliant employers was a two-year ban from being able to utilize TFWs.
Employers that commit a violation and have received a notice of final determination will have their names published on a publicly accessible “blacklist” on the government website. The only exception is for a violation where no AMP or ban applies (e.g. for minor, first time violations or where voluntary disclosure reduces the AMP points total to a level that does not provide for a monetary penalty).
Points System used to Assess Penalties
Under the AMP regime, CIC and ESDC will use a points-based system to determine the administrative monetary penalties and/or ban periods levied on employers. Each separate violation will be assessed and assigned a point total by an inspector; the higher the point total, the harsher the penalty. The factors that will be considered are the following:
- Type of violation (each obligation placed on employers under IRPA has been designated as a Type A, Type B or Type C violation, with Type C being the most serious);
- Severity of violation (this factor is at the discretion of the reviewing officer);
- Employer’s prior compliance history (that occurred on or before December 1, 2015);
- Any voluntary disclosure by the employer (this could reduce the number of points assessed);
- Nature of the employer (i.e. whether the employer is an individual/small business or large business) for financial penalties only. A small business is defined as a business (including its affiliates) with fewer than 100 employees or less than $5 million in annual gross revenues. A large business is defined as a business that is not a small business.
It is predicted that under the AMP regime the number of random inspections conducted by ESDC will increase and as many as one in four employers that use TFWs could face an inspection per year. Inspections could also be triggered following a complaint or as a result of concerns about potential violations by a particular employer. Employers using TFWs in Canada should expect to undergo an inspection at some point in time and they will need to prove that they meet the conditions placed on them by IRPA. Therefore, employers utilizing TFWs should take the necessary steps to ensure that they are fully compliant with all of IRPA’s conditions relating to TFWs as soon as possible.