Immigration Laws: The Cost Of Non-Compliance

Employers in Canada struggling to fill vacancies are turning to the international labour market to recruit and hire temporary foreign workers under various federal and provincial or territorial immigration programs. These programs have been a lifeline for industries facing chronic labour shortages. But participation in these immigration programs comes with strict compliance obligations – and consequences – that often come as a surprise to employers trying to navigate the system.

Employer compliance is not new. Canada's immigration compliance regime was first introduced in 2015. Since then, there have been several initiatives to strengthen the rights of workers and ensure employers are meeting their obligations under Canada's Immigration and Refugee Protection Act (IRPA) and Immigration and Refugee Protection Regulations (IRPR). The most recent initiative has been an intensification of oversight of immigration programs with Employment and Social Development Canada conducting over 1,400 employer compliance inspections in the 2024-2025 fiscal year, finding a 10% non-compliance rate.

The risk for non-compliance increases with the number of temporary foreign workers employed in the workplace. As a result, non-compliance is frequently seen in industries where wages are low and demand and turnover high. In these industries, employers tend to become familiar with the process of hiring workers and, unless advised regularly, can be unaware of or complacent on compliance matters. And even seemingly minor or inadvertent breaches can result in significant penalties for employers.

The Cost of Non-Compliance

The cost of non-compliance is growing:

Penalties Doubled. According to Employment and Social Development Canada (ESDC), penalties have doubled year-over-year, with $4.9M in fines last year. In 2025, Immigration, Refugees and Citizenship Canada (IRCC) fined an unidentified employer a historic $1M and banned from the Temporary Foreign Worker Program (TFWP) for a decade for non-compliance, including: failure to provide proper wages and working conditions; failure to comply with federal and provincial employment laws; and failure to provide a workplace free of abuse.

Program Bans Increasing. Over the same period, ESDC reports that programs bans have increased threefold with 36 employers banned.

Nature of Non-Compliance. Notably, non-compliance isn't limited to the employment conditions of temporary foreign workers; employers can also face serious consequences under IRPA and IRPR for failure to maintain proper employment records and failure to participate in an employer compliance inspection. In September 2025 alone, 23 employers in Canada received fines ranging from $5,000 to $15,000 for failing to produce documents requested by an inspector with no other violations noted. Several others were cited for failing to produce documents but had other violations resulting in higher combined fines. This includes one Alberta employer that received a $155,000 fine and a one-year ban for not providing documents and for breaking federal and provincial laws for hiring and recruiting employees in the province. More recently, in November 2025, another employer was fined $53,750 and issued a permanent ban for failing to produce documents requested and for its inability to demonstrate the information listed in the offer of employment was true for a period of six years.

6 Best Practices for Immigration Law Compliance

Most employers don't set out to violate immigration laws that regulate them. Unfortunately, lack of intention or ignorance of the law are not defences – and IRPA contains a deeming provision that explicitly holds employers that fail to exercise due diligence to ensure work by a temporary foreign worker is authorized are deemed to have knowledge of that the work is unauthorized. Here are six best practices to help you exercise due diligence in complying with immigration laws:

1. Have An Immigration Policy

When incorporating temporary foreign workers into your workforce plans it's important to have an immigration policy to help ensure:

• Your managers and supervisors are aware of the process and requirements for hiring temporary foreign workers.
• They know what records to maintain.
• They understand the specific limits associated with temporary foreign worker authorization and the proper procedures to follow when changes are necessary.

2. Maintain Proper Records

Ensure your workplace has sufficient document retention and management systems in place and that you keep all documents related to the employment of a temporary foreign worker for at least six years from the date the applicable work permit is issued. These records should include, at a minimum:

• Records related to the recruitment of the worker.
• Job offers.
• Employment contracts.
• Payroll records.
• Proof of working conditions.
• Any other documents that can demonstrate compliance with LMIA or OOE commitments.

Maintain these records in an organized and accessible manner so they can be made available for inspection upon request.

3. Conduct Internal Audits

Internal audits can form part of a larger regulatory compliance process or be a standalone immigration audit. In either case, conduct regular reviews of the workplace to determine your level of compliance and to proactively remedy any areas of concern before they become subject to an inspection. At a minimum:

• Regularly review work permits for accuracy, validity and restrictions.
• Compare work permits, Labour Market Impact Assessments (LMIA)/Online Offers of Employment (OOE), employment contracts and actual working conditions for consistency, paying particular attention to job description, location, hours of work, wages and benefits.

4. Consider Voluntary Disclosure

Where the results of an internal audit reveal inconsistencies with your immigration obligations, consider voluntarily disclosing the issue, after you've remedied it and before you become subject to inspection. While you might fear that voluntary disclosure could trigger an audit, the purpose of voluntary disclosure is to demonstrate that the non-compliance was unintentional and show you remedied it upon discovery. IRCC should consider these factors to be mitigating and take them into account when penalties, if any, are assessed.

5. Use Reputable Representatives

Employers are wholly responsible for the actions and submissions of their representatives. It's therefore crucial to ensure your representatives are reputable and in good standing and to know what your representatives are submitting on your behalf. Confirm your lawyer is a member of a law society in Canada or your consultant is registered with the Canadian Registered Immigration Consultants.

6. Be Proactive

The regulation of temporary foreign workers is complex and requires consideration of both immigration and labour and employment legislation at federal and provincial or territorial levels. Instead of waiting to seek legal advice when you're subject to an IRCC audit or sanctions proactively seek legal advice to prevent non-compliance, identify areas of concern and obtain strategic advice to remedy non-compliance and reduce potential exposure in an audit by ensuring cooperative yet balanced participation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.