Employer Liability When Using Staffing Agencies to Hire Foreign Workers
July 2023 - 5 min read
Many employers rely on staffing agencies to assist with hiring employees. Despite this, employers remain liable and may be subject to sanctions if foreign workers are on site without proper authorization. As an employer, you must confirm independently that all employees are legally authorized to work.
All foreign workers must have a work permit authorizing them to work for an employer at the location and the occupation displayed in the work permit for the duration listed. Canadian employers who are found to have foreign workers on site without proper authorization face the full range of penalties listed below. When using the services of a staffing agency, employees must undertake their own due diligence to ensure that they do not inadvertently employ unauthorized workers.
Using Hiring Agencies: Contravention + Liability Under the Immigration and Refugee Protection Act
It is a fundamental aspect of Canadian immigration law that employers must ensure that foreign workers are lawfully authorized to work in Canada. The Immigration and Refugee Protection Act (the “Act”) contains criminal sanctions for using unlawful workers, being workers who are not Canadian citizens or permanent residents, and either:
- Who do not have a Work Permit.
- Who do have a Work Permit, but that Work Permit:
- Is no longer valid, or
- Is not specific to your job site/company (i.e., it’s in another employer’s name) unless it’s an Open Work Permit.
- Who are students if they:
- Are not currently enrolled in a program of full-time studies (even then there are restrictions for registered full-time students), or
- Have not applied for or obtained a Post Graduate Work Permit.
Under sections 124 and 125 of the Act, a person who employs an unauthorized worker can face up to two years imprisonment and fines ranging up to $50,000. The Act also stipulates that if a person fails to exercise due diligence in determining whether employment is authorized, they are deemed to know that the work is unauthorized and subject to sanctions.
This has ramifications for employers utilizing hiring agencies and relying on the agencies to confirm foreign workers’ authorization. Under the Act, without properly exercising due diligence, an employer can also be liable for employing unauthorized workers. Simply put, an employer cannot insulate themselves from sanction because they relied on a hiring agency that affirmed the workers were lawful if the employer conducted no independent verification.
Responsibility for the contravention would be on the individual(s) who would be considered the controlling mind of the corporation, which includes presidents, directors, or principal shareholders of the corporation.
The above caution also applies to employers who hire an entity to provide services and that entity subcontracts to another. As with a hiring agency, employers must still exercise due diligence when using third-party contractors and subcontractors. The obligation to ensure workers are authorized extends to foreign workers on-site for brief periods of time and those paid directly by the contractor.
Best Practices for Engaging Staffing Agencies
The starting point when working with a staffing agency is that an employer must satisfy itself that the worker being provided is authorized to work for the company. Here are some steps that employers can take to perform the necessary due diligence to satisfy themselves that the worker being provided is authorized to work for their company:
- Request and review copies of the Work Permit held by the employee (or Citizenship/Residence document) before the worker begins work on-site.
- Request and review the biographical information page in the employee’s passport to confirm the person working matches the person on the Work Permit or citizenship/residence document.
- Request and review the social insurance number card. All foreign workers’ SINs will start with the number "9" and will have an associated Work Permit authorizing their working status.
- Keep an immigration file for each foreign worker separate from the personnel file that contains copies of the requested information and maintain this file for a minimum of six years.
- If you are contracting with a staffing agency to have workers provided, ensure that your contract requires the agency to:
- Confirm provided employees are legally authorized to work in Canada for your company at the sites in the province where the worker will be assigned,
- Agree not to assign employees to work prior to confirming the employee is authorized,
- Provide copies of valid work permits or citizenship/residence documents before the worker commences work on-site,
- Confirm that it is responsible for, and will, complete and maintain all work permits and visas and that it has and will comply with all Canadian immigration laws and regulations, including but not limited to the Immigration and Refugee Protection Act and Regulations, and
- Confirm it has not charged the foreign worker (directly or indirectly) any fees to obtain employment. If you are being charged an under-market fee by the staffing agency, this should be a red flag and raise your suspicions.
As for dealing with workers already provided by third parties (contractors or staffing agencies), employers should reach out to any entity that has supplied workers and request the above information.
If you are an employer currently using agencies or contractors to hire foreign workers, Field Law's Immigration Group can assist with drafting language for agreements to ensure the workers being provided to you are legally authorized to work. Please contact Cory Dawson for guidance and assistance.