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There’s nothing more frustrating than completing a long, complex project, only to find you’ve overlooked a key element to making that project a success. In mergers and acquisitions, corporate lawyers, in-house counsel, tax experts and many others spend countless hours doing due diligence, poring over contract details, sales figures, capital, patents, clientele, litigation, IT, marketing and many more. . With such an extensive list, it can be easy to overlook a key element that should be considered in any M&A due diligence process: immigration matters.
Any changes to an organization’s structure, ownership or even name can create potential problems for employees working in Canada under a work permit, and expose the organization to significant liability under the regime. Canada’s immigration compliance. Immigration issues should therefore be an integral part of any M&A due diligence process.
Canada’s compliance regime
from Canada Immigration and Refugee Protection Regulations, SOR/2002-227 (IRPR), provide a robust system for ensuring employers’ compliance with the conditions set out in an immigration application for the entry of a foreign worker. Employers of temporary foreign workers must meet a number of conditions. Some conditions are employee-specific, such as ensuring the employee receives the appropriate title, duties, compensation, benefits, and hours of work and demonstrating that a job offer is genuine, while d other conditions are more general, such as complying with federal and state laws that govern employment, making reasonable efforts to provide a workplace free of abuse, and remaining actively engaged in the business in respect of which a job offer has been made.
If temporary foreign workers are employed on the basis of a Labor Market Impact Assessment (LMIA), employers will also need to ensure that the employment of the foreign national will result in Canadian labor market benefits described in an LMIA application, including job creation. or the retention, development or transfer of skills to Canadians, or the hiring or training of Canadians. Employers must also keep all documents confirming the above conditions for a period of six years from the date the foreign national started working.
An employer who breaches any of the above conditions may defend his actions in an attempt to mitigate his liability; however, justifications for non-compliance are very limited and are mandated by law in the IRPR. Justifications include: changes to federal or provincial law; changes to collective agreements; a dramatic change in economic conditions; a bona fide misinterpretation of the employer’s obligations; an unintentional accounting or administrative error; force majeure; ohr similar circumstances.
Findings of non-compliance can result in significant penalties, both financial and practical. From a financial perspective, employers may be subject to administrative monetary penalties for non-compliance, ranging from $500 to $100,000 per violation, up to a maximum of $1 million per year and by employer. The calculation of these penalties is based on a complex formula based on the type of violation and whether it is committed by an individual or a small business, or a large business, taking into account the compliance history of the employer , the seriousness of the violation and whether there was voluntary disclosure of the non-compliance.
In addition to administrative monetary penalties, employers may face a period of ineligibility on future LMIA and work permit applications, for a period of one, two, five or 10 years, or permanently for more serious non-compliance situations, as well as the revocation or cancellation of current and pending LMIAs and work permits and the publication of the employer’s name on a public government website for an indefinite period .
Employers can also be held liable for offenses under the Immigration and Refugee Protection Act, SC 2001, c. 27 (IRPA), such as the employment of a foreign national in a position for which the foreign national is not authorized under the IRPA, or the offenses of misrepresentation or advice in relation to misrepresentation, the Penalties may include both fines and imprisonment.
This is the first of a two-part series.
The opinions expressed are those of the authors and do not necessarily reflect the views of the author’s firm, its clients, The Lawyer’s Daily, LexisNexis Canada or one of its respective affiliates. This article is for general informational purposes and is not intended to be and should not be considered legal advice.
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