Unauthorized Foreign Workers: How to Protect Your Employer

HRmatters online exclusive article 

Authored by: Reis Pagtakhan and Danielle Dubois, Aikins Law 

Under immigration law, it is essential for HR professionals to determine whether employees are legally entitled to work in Canada.

Unlike some other areas of law, Canada’s Immigration and Refugee Protection Act presumes that employers know if their employees are legally entitled to work for them in Canada. In other words, employers who do not exercise due diligence are guilty until proven innocent under immigration law and can face significant penalties.

What does it mean to “employ” someone under immigration law?

While the Immigration and Refugee Protection Act states that employers must not “employ” someone illegally – the Act does not define “employ”.

In the British Columbia case, R. v. Huen, the judge defined “employ” as reflecting “an activity for which a person receives or might reasonably be expected to receive wages or other valuable consideration.” In other words, an employer is only employing an employee if that person is being paid.

Are employers with unpaid workers exempt from the immigration law?

According to the Huen decision, an employer does not employ a person under immigration law if that person is not being paid. However, the Immigration and Refugee Protection Act 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 means that an employee can be found to be working illegally in Canada even if he or she is not being paid – because those activities could compete with others in the Canadian labour market.

While this difference between “employ” and “work” could have the effect of penalizing employees but not employers, employers should still be mindful that unauthorized employees may face harsh penalties of their own – such as the loss of their status in Canada and removal from this country. Also, counselling an individual to break the law could result in penalties for employers.

What are the penalties for employing someone not legally entitled to work in Canada?

Violating the Immigration and Refugee Protection Act can result in fines of up to $50,000, jail time of up to 2 years, or both.

 In the Manitoba case of R. v. Choi, an employer was found to have employed six foreign nationals without permits at his restaurant in Winnipeg. In this case, the employer pled guilty, was convicted and was ordered to pay a $15,000 fine.

 Increasingly, more and more of these types of cases are being prosecuted.

 In July of this year, an Edmonton restaurant was fined $14,000 and ordered to pay $3,500 in restitution for employing a foreign national without authorization and failing to follow the terms of a Labour Market Impact Assessment. Clearly, the need to ensure every employee is legally entitled to work for an employer is a necessary first step in the hiring process.

 How to protect yourself: Exercise Due Diligence

 In order for an employer to successfully prove that it is not at fault for employing someone who is not legally entitled to work in Canada,  it must prove that it exercised “all due diligence” in determining whether that foreign national could legally work in Canada for the company. In order to exercise “all due diligence”, the following steps should be considered.

 Confirm that the employee is legally entitled to work in Canada for your company

 Many foreign nationals in Canada hold work permits that legally entitle them to work in Canada. However, most of these work permits restrict the foreign national to work for a specific employer, in a specific position, and at a specific location.

 As a result, it is possible that a foreign national can answer “yes” to the question: “Are you legally entitled to work in Canada?” but “no” to question: “Are you are legally entitled to work in Canada for this particular company?” Because it  is the employer’s legal responsibility to determine that a potential employee can work for their company, it is important to ask both of the  following questions.

 Check the employee’s Social Insurance Number

 Every person working in Canada must have a SIN. The Government of Canada issues SINs that begin with the number “9” to temporary workers who are neither Canadian citizens nor permanent residents.

 The expiry date on the SIN card that starts with a “9” corresponds to the expiry date on the government document authorizing the foreign national to work in Canada.  A potential employee with  a SIN beginning   in “9”  is the first indication  that further inquiries should be made.

 Verify details

 Employers should verify that employees with these SIN numbers have the appropriate authorization to work in Canada, and that these documents have not expired. SINs can be verified at Service Canada’s Social Insurance Registration Office.

 If you still have doubts, contact Immigration, Refugees and Citizenship Canada (formerly Citizenship and Immigration Canada) directly.

Note: This article is intended to provide information for readers of HRmatters Magazine and is of a general nature only. It is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that this article is not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.

Reis is a partner with Aikins Law and practices in the area of immigration law. Reach him at rrp@aikins.com or (204) 957.4640, or on Twitter @ImmigrationReis or connect with him on LinkedIn. Reis also offers Immigration 101 workshops for HR professionals through the HRMAM Accredited Partners Program.  

Danielle is a law summer student with Aikins Law. If you would like to know more about Danielle connect with her on LinkedIn.