Top 5 Reasons for LMIA refusal
An LMIA, or Labor Market Impact Assessment, is a document issued by Employment and Social Development Canada (ESDC) that allows an employer in Canada to hire a foreign worker. LMIA applications can be refused for various reasons, but here are the top five common reasons for refusal:
#1 – Insufficient or inadequate recruitment efforts e.g.; non-continuous advertising or erroneous NOC code analysis
ESDC expects employers to make genuine efforts to hire Canadian citizens or permanent residents before seeking foreign workers. If it is believed that the employer has not made sufficient efforts to recruit locally or has not advertised the job adequately, the LMIA application may be refused.
ESDC have stringent rules on the duration that recruitment advertisement must run and that they run continuously. A failure to fully meet these requirements can result in refusal.
Another common mistake in LMIA recruitment drives is to fail to advertise in appropriate publications where Canadians might be seeking employment. For example an LMIA application that is recruiting for a specialist occupation such as a Visual Effects Compositor or a Science Technology Engineering Mathematics (STEM) role would necessitate that the recruitment advertisements run in the relevant publications, journals and website that are relevant to that particular field.
It is also important that each component of the recruitment drive have unique value and reach different audiences and national in scope.
#2 – Not meeting the prevailing wage (believe it or not)
Wage and Working Conditions: The employer must offer wages and working conditions that are consistent with prevailing labor market standards in the specific occupation and region. If the wages or working conditions do not meet the minimum requirements, the LMIA can be refused.
It is best practise to slightly exceed the prevailing wage for a given occupation by a few cents if possible as the prevailing wage associated with a particular training, education, experience and responsibilities (TEER) code can and do change periodically.
#3 – Incomplete application
Insufficient or Inaccurate Information: If the application is incomplete, contains inaccurate information, or fails to provide all the required supporting documents, ESDC may refuse the LMIA.
An example of this for high wage applications is failing to include the mandatary transition plan or in the case of low wage occupations falling to include information on housing, transportation and employment agreement.
#4 – Not meeting program requirements
A genuine and acute skills shortage is a perquisite to apply for an LMIA, if it is not the case then the Service Canada office will quickly discover this and refuse the application.
Impact on the Canadian Labor Market: ESDC assesses whether hiring a foreign worker for the specific job will have a positive or negative impact on the Canadian labor market. If the assessment shows that hiring a foreign worker may negatively affect job opportunities for Canadians or permanent residents, the LMIA may be refused.
Ineligible Occupations: Certain occupations may be ineligible for an LMIA due to policy considerations or labor market conditions. ESDC maintains a list of occupations that are ineligible or have specific restrictions, and applying for an LMIA for one of these occupations can result in a refusal.
For low wage occupations not meeting the cap on the proportion of low wage occupation positions that are foreign workers is a common reason for refusal.
#5 – Ill-preparedness for the interview
It’s crucial for employers to prepare for the employer interview with ESDC. The Service Canada agents use the interview to cross examine the information in the application. The employer ideally should have an annotated copy of the application to hand for the interview and have intimate knowledge of the rationale for making an application, a detailed knowledge of the job description and prevailing wage and recruitment drive.
Failing to prepare for the interview can be preparing to fail.
In conclusion then it’s crucial for employers to carefully review the LMIA application requirements, conduct thorough recruitment efforts, offer competitive wages and working conditions, and ensure that all necessary documentation is included to maximize the chances of approval.
The LMIA application processing fee is $1000 per applicant and the consequences of a delay at best or at worst not getting it approved and leaving an acute skills shortage unfilled for a business in need is a severe consequence of having an application refused.
Consulting with a qualified immigration professional or legal expert can also be beneficial in navigating the LMIA application process. Keep in mind that the rules and regulations regarding LMIA may change over time, so it’s essential to refer to the most up-to-date guidelines provided by ESDC or the Canadian immigration authorities.
