Canadian Immigration: Penalties for Failing to Obtain a Work Permit

Background

Canada’s immigration laws were significant changed in 2002. One area that received particular attention was the penalties for the unauthorized employment of foreign nationals. These changes now mean that the legal consequences of employing a foreign national who does not have a valid Work Permit where one is required can be extremely harsh, both for the Canadian employer and the foreign worker.

THE MEANING OF “WORK”

Canadian immigration law defines “work” as: "an activity for which wages are paid or commission is earned, or that is in direct competition with the activities of Canadian citizens or permanent residents in the Canadian labour market."

This is a very broad definition which is capable of capturing a wide range of work and work-related activities and occupations.

OBLIGATION TO OBTAIN A WORK PERMIT

Under Canadian immigration law, foreign nationals are prohibited from engaging in work or taking up employment in Canada without first having obtained a Work Permit except where the work in question is one of the specific types of work which a foreign national is authorized to perform without a Work Permit. These Work Permit Exempt Activities are specifically enumerated in the Regulations made under Immigration and Refugee Protection Act and in the Foreign Worker Manual, and are also known as “work without a work permit.”

Employer Penalties

With the exception of Work Permit Exempt Activities, Canadian immigration law prohibits an employer from employing a foreign national without a Work Permit. Employers who violate this by illegally employing a foreign national are liable to fines of up to $CAD50,000 and terms of imprisonment of up to two years. If there is evidence of misrepresentation on the part of the employer, the fines and terms of imprisonment can be increased to $CAD100,000 and five years respectively.

Employee Penalties

The illegally employed foreign national can be arrested and deported from Canada, and will be prohibited from applying for a Work Permit for six months. A finding of misrepresentation will result in the foreign national being prohibited from re-entering Canada for two years.

Due Diligence Obligation

For employers, the situation is further complicated by the fact that they are under a legal obligation to use “due diligence” in determining whether a foreign national requires a Work Permit.

In practical terms, this means that the employer is under a legal obligation to take reasonable steps to determine whether the foreign national requires a Work Permit. Failure to conduct a “due diligence” investigation will result in a presumption at trial that the employer knew that a Work Permit was required but failed to make sure that the foreign worker obtained one. Experienced trial lawyers dread having to deal with these types of reverse evidentiary burdens because of the extreme difficulty of disproving them.

Implications for the Employer

The due diligence obligation together with the doubled penalties for misrepresentation has extremely serious liability implications for Canadian employers who use foreign nationals in their organizations. The risk to the employer is further compounded by the fact that in almost all cases, the foreign national will look to the employer for advice on whether a Work Permit is required. In particular, employers will no longer be able to build a defense based on urgency or inadvertence.

• Example: The Canadian employer urgently needs the foreign worker’s skills. It knows that a Work Permit is required but is not prepared to wait for one to be issued. The employer tells the foreign worker that there is not enough time to obtain a Work Permit and it encourages the foreign worker to enter Canada as a Business Visitor.
• COMMENT: The employer would be found to have made a deliberate misrepresentation and would be liable for the doubled penalties. The foreign worker would also be found to have misrepresented the situation and would be at risk of being arrested, deported and barred from entering Canada for two years.
  
• Example: The Canadian employer is not sure whether a Work Permit is required. It decides to ignore the issue and “look the other way” while advising the foreign worker that he/she can enter as a Business Visitor.
• COMMENT: The employer’s negligence in failing to determine whether a Work Permit is required would constitute a failure to perform due diligence. Its act of counseling the foreign worker to enter as a Business Visitor would also likely result in a finding of misrepresentation as against the employer.

Minimizing the Risk of Exposure

The extreme severity of these sanctions means that Canadian employers and personnel recruiters who deal with foreign nationals must take the necessary steps to determine whether the foreign national’s intended activities in Canada require a Work Permit to be obtained. Failure to do this may result in significant legal exposures both for the employer and the foreign national. Employers who have any doubts when faced with this type of situation would be well advised to obtain professional advice from a suitably qualified business immigration lawyer.

READ MORE . . . about Temporary Resident Visas about Work Permit Exempt Activities about Work Permits about Confirmation Exempt Work Permits about Penalties for Failing to Obtain a Work Permit about Student Visas about Canadian Immigration Medical Examinations

Disclaimer: The information contained on this site is intended to educate members of the public generally and is not intended to provide legal or professional advice or solutions to individual problems. If you require legal advice or assistance, you should consult a Gaertner Tobin LLP lawyer at info@GTLLP.com.