Labour Market Impact Assessment (LMIA): Complete Guide

Executive Summary

A Labour Market Impact Assessment (LMIA) is a critical document that Canadian employers must obtain before hiring foreign workers in most circumstances. Think of it as the government’s way of ensuring that hiring a foreign worker won’t negatively impact Canadian citizens and permanent residents’ job opportunities.

What this means for you: Whether you’re an employer looking to hire international talent or a foreign worker seeking employment in Canada, understanding the LMIA process is essential for a successful application.

The LMIA system underwent significant updates in 2024-2025, including streamlined processing for certain sectors and enhanced compliance monitoring. These changes directly impact application strategies and timelines—something most generic guides won’t tell you.

Real insight from AVID experts: The most common misconception we see is that LMIA approval is automatic if you meet the basic requirements. In reality, officers assess the genuine need for the position, wage competitiveness, and your recruitment efforts with scrutiny that varies significantly by region and industry.

Recent data shows approval rates ranging from 65% to 85% depending on the stream, with processing times varying from 10 business days for high-demand sectors to 56 business days for standard applications. Understanding these nuances can make the difference between approval and rejection.

LMIA Fundamentals

Legal Framework and Authority

The LMIA program operates under the Immigration and Refugee Protection Act (IRPA) and is administered by Employment and Social Development Canada (ESDC). The assessment determines whether hiring a foreign worker will have a positive, negative, or neutral impact on the Canadian labour market.

What this means for you: ESDC officers have significant discretionary power in their assessments. Your application isn’t just checked against a simple list—it’s evaluated within the context of local economic conditions, industry trends, and labour market data.

Types of LMIA Assessments

There are several LMIA streams, each with distinct requirements:

High-Wage Stream: For positions paying at or above the provincial/territorial median wage Low-Wage Stream: For positions below the median wage (subject to caps and additional requirements) Seasonal Agricultural Worker Program (SAWP): Specialized stream for agricultural employers In-Home Caregiver Program: For live-in caregivers and family childcare providers Global Talent Stream: Expedited processing for high-skilled positions and designated employers

Real mistake we’ve seen—and how to avoid it: Many employers assume they can choose their preferred stream. The wage offered and job classification automatically determine your stream, and applying under the wrong category results in automatic rejection.

Employer vs. Employee Responsibilities

Employers must:

• Demonstrate genuine recruitment efforts
• Offer wages meeting or exceeding prevailing rates
• Provide working conditions that meet provincial standards
• Commit to compliance monitoring

Employees must:

• Meet job requirements and qualifications
• Apply for the work permit after LMIA approval
• Work only for the approved employer in the specified position

Optional—but strongly recommended by AVID experts: Even though it’s the employer’s responsibility to obtain the LMIA, foreign workers should understand the process thoroughly. This knowledge helps you identify legitimate job offers and avoid potential exploitation.

Application Process Deep Dive

Pre-Application Requirements

Before submitting an LMIA application, employers must complete mandatory recruitment activities to demonstrate they attempted to hire Canadians or permanent residents first.

High-Wage Positions Recruitment Requirements:

• Job advertisement on the Government of Canada’s Job Bank for at least 4 weeks
• Two additional recruitment methods for at least 4 weeks (job fairs, professional associations, etc.)
• Recruitment must occur within 3 months before applying for LMIA

Low-Wage Positions Recruitment Requirements:

• Job Bank posting for minimum 4 weeks
• One additional recruitment method for at least 4 weeks
• Must demonstrate outreach to underrepresented groups (Indigenous peoples, persons with disabilities, youth)

What really happens behind the scenes: ESDC officers don’t just verify that you posted jobs—they analyze the quality and reach of your recruitment efforts. Generic job postings with unrealistic requirements (designed to exclude Canadian applicants) trigger red flags and often result in rejection.

Documentation Checklist

Core Documentation Required:

• Completed LMIA application form (EMP5593)
• Employer compliance fee payment ($1,000 CAD)
• Job offer details and employment contract
• Recruitment report with supporting documentation
• Business legitimacy documents (incorporation papers, tax returns, financial statements)
• Wage determination evidence (job postings, wage surveys, collective agreements)

Additional Documentation by Stream:

• High-Wage: Skills shortage evidence, economic benefit justification
• Low-Wage: Transition plan for reducing reliance on foreign workers
• Seasonal Agricultural: Housing inspection reports, transportation arrangements
• Caregiver: Language assessment results, educational credential assessments

Real mistake we’ve seen—and how to avoid it: Incomplete wage determination documentation is the leading cause of delays. Officers need clear evidence that your offered wage meets or exceeds the prevailing rate. Simply stating “competitive salary” isn’t sufficient—you need comparative data from legitimate sources.

Submission Procedures and Timelines

Applications are submitted online through the ESDC portal, with supporting documents uploaded in PDF format (maximum 10MB per file).

Processing Timelines (Current as of 2024-2025):

• Global Talent Stream: 10 business days
• Seasonal Agricultural Worker Program: 10 business days
• High-Wage Stream: 56 business days
• Low-Wage Stream: 56 business days
• In-Home Caregiver Program: 56 business days

What this means for you: These are service standards, not guarantees. Complex applications or those requiring additional documentation can take significantly longer. Plan accordingly and avoid making commitments based on best-case scenarios.

Common Application Errors

The “Fatal Five” mistakes that lead to rejection:

1. Insufficient recruitment efforts: Generic postings or inadequate advertising duration
2. Wage discrepancies: Offering below prevailing rates or inconsistent wage information
3. Unrealistic job requirements: Qualifications that don’t match the job duties or are designed to exclude Canadians
4. Business legitimacy concerns: Insufficient evidence of genuine business operations
5. Incomplete documentation: Missing forms, signatures, or supporting evidence

If you’re applying from high-refusal-rate countries: Officers may scrutinize your application more carefully for potential misrepresentation. Ensure all documentation is authentic, properly translated, and clearly demonstrates the genuine need for your specific skills.

CTA BUTTON: Download LMIA Requirements Checklist

Assessment Criteria

Labour Market Testing Requirements

ESDC officers evaluate whether employers made genuine efforts to hire Canadian workers before seeking foreign talent. This goes beyond simply posting job advertisements.

What officers actually look for:

• Realistic job requirements that match the position level
• Competitive wages and benefits packages
• Accessible job posting locations and methods
• Adequate time for Canadian workers to respond
• Legitimate reasons for rejecting Canadian applicants

Behind-the-scenes insight: Officers often contact job advertisement platforms to verify posting duration and reach. They may also review similar job postings in your area to assess whether your requirements are reasonable.

Wage Determination Factors

Determining the appropriate wage is crucial for LMIA approval. Officers assess multiple factors:

Primary wage determination sources:

• Job Bank wage information
• Provincial/territorial wage surveys
• Collective bargaining agreements
• Legitimate job postings for similar positions

Regional considerations: Wages vary significantly across Canada. A software developer position in Toronto requires different compensation than the same role in rural Manitoba.

Real mistake we’ve seen—and how to avoid it: Many employers use outdated or inappropriate wage sources. Using wage data from different regions or significantly different job classifications undermines your application credibility.

Job Offer Genuineness Evaluation

Officers assess whether the job offer represents genuine employment rather than an immigration scheme.

Red flags that trigger scrutiny:

• Employer and employee with pre-existing relationships (family, business partners)
• Newly incorporated companies with limited business history
• Job duties that don’t match the business type
• Wages significantly above market rates without justification
• Multiple LMIA applications for similar positions

What this means for you: Legitimate job offers with proper documentation shouldn’t face issues, but applications that appear contrived will receive enhanced scrutiny and likely rejection.

Regional Economic Impact Considerations

ESDC considers local economic conditions when assessing applications:

High unemployment regions: Applications face additional scrutiny regarding recruitment efforts and wage offerings Seasonal fluctuations: Tourism and agricultural areas may have varying assessment criteria based on seasonal employment patterns Industry-specific factors: Some sectors (like IT or healthcare) may receive more favorable consideration due to recognized skill shortages

If you’re applying from regions with high refusal rates: Provide additional evidence of legitimate business operations and genuine job requirements. Officers may be more skeptical of applications from areas with histories of immigration fraud.

CTA BUTTON: Get Professional LMIA Application Assistance

LMIA Categories and Streams

High-Wage Positions

Positions paying at or above the provincial/territorial median hourly wage qualify for the high-wage stream.

Key advantages:

• No cap on number of foreign workers
• Longer work permit validity (up to 4 years)
• Pathway to permanent residence through Express Entry points

Additional requirements:

• Demonstrate skills shortage or economic benefit
• Higher recruitment standards
• Potential job creation for Canadians

Optional—but strongly recommended by AVID experts: For high-wage positions, include evidence of how the foreign worker will train Canadians or contribute to knowledge transfer. This strengthens your economic benefit argument.

Low-Wage Positions

Positions paying below the median wage face additional restrictions and requirements.

Key limitations:

• 20% cap on low-wage foreign workers (with exceptions)
• Maximum 1-year work permits
• Transition plan required for reducing foreign worker dependency

Enhanced requirements:

• Outreach to underrepresented groups
• Accommodation considerations
• Transportation arrangements (if applicable)

What this means for you: Low-wage stream approvals are increasingly difficult to obtain. Officers scrutinize whether the position genuinely requires foreign workers and whether the employer is making sufficient efforts to hire Canadians.

Seasonal Agricultural Worker Program (SAWP)

Specialized stream for primary agriculture employers hiring workers from Mexico and participating Caribbean countries.

Unique features:

• Expedited 10-day processing
• Established bilateral agreements
• Housing and transportation requirements
• Duration up to 8 months

Critical compliance elements:

• Adequate housing inspections
• Worker transportation arrangements
• Adherence to minimum wage requirements
• Health and safety compliance

Caregiver Program Specifics

For employers hiring live-in caregivers or family childcare providers.

Two main streams:

• Home Child Care Provider Pilot: For childcare in private homes
• Home Support Worker Pilot: For seniors or persons with disabilities

Unique requirements:

• Language proficiency requirements
• Educational credential assessment
• Specific training or experience criteria
• Pathway to permanent residence

Real insight from AVID experts: Caregiver LMIA applications often face delays due to incomplete language documentation or insufficient evidence of caregiving experience. Ensure all credentials are properly assessed and translated before applying.

Processing and Decision Factors

Review Timelines by Category

Understanding processing timelines helps set realistic expectations:

Expedited Processing (10 business days):

• Global Talent Stream
• Seasonal Agricultural Worker Program
• Significant benefit categories

Standard Processing (56 business days):

• High-wage stream
• Low-wage stream
• In-home caregiver program

What really happens behind the scenes: Processing times start from the date ESDC receives a complete application. Incomplete applications face indefinite delays while additional documentation is requested.

Positive vs. Negative Assessments

Positive LMIA approval includes:

• Confirmation number for work permit application
• Specific conditions and requirements
• Validity period (typically 6 months for work permit application)

Negative assessment reasons:

• Insufficient recruitment efforts
• Wage below prevailing rates
• Job requirements unrealistic or discriminatory
• Business legitimacy concerns
• Labour market conditions don’t support hiring foreign workers

What this means for you: Negative assessments include detailed explanations of deficiencies. These can often be addressed in a new application with proper corrections.

Appeal and Reconsideration Options

Limited recourse available:

• No formal appeal process for LMIA decisions
• Federal Court judicial review (complex and expensive)
• New application addressing previous concerns

Strategic approach for negative decisions:

• Analyze refusal reasons carefully
• Address all identified deficiencies
• Strengthen recruitment documentation
• Consider consulting with LMIA specialists

Real mistake we’ve seen—and how to avoid it: Many applicants immediately resubmit similar applications after rejection. This wastes time and money. Take time to thoroughly address the refusal reasons before reapplying.

Post-LMIA Requirements

Work Permit Application Process

After LMIA approval, foreign workers must apply for work permits through Immigration, Refugees and Citizenship Canada (IRCC).

Required documentation:

• Positive LMIA and confirmation number
• Job offer from LMIA-approved employer
• Proof of qualifications and experience
• Medical examination (if required)
• Police clearance certificates

Processing considerations:

• Work permit processing is separate from LMIA approval
• Additional requirements may apply based on worker’s country of origin
• LMIA approval doesn’t guarantee work permit approval

Employer Compliance Obligations

LMIA approval comes with ongoing obligations:

Mandatory compliance requirements:

• Employ the foreign worker as specified in the LMIA
• Provide wages and working conditions as promised
• Maintain records of employment
• Submit to compliance inspections

Potential penalties for non-compliance:

• Monetary penalties up to $100,000 per violation
• Ban from LMIA program (1-10 years)
• Public disclosure of violations
• Criminal charges for serious violations

What this means for you: Compliance extends beyond hiring. Employers must maintain the conditions promised throughout the employment period.

Employee Rights and Protections

Foreign workers have specific rights and protections:

Employment rights:

• Same wages and working conditions as Canadians
• Right to refuse unsafe work
• Access to workers’ compensation
• Right to join unions

Immigration protections:

• Right to change employers (with new LMIA or exemption)
• Protection from employer abuse
• Access to settlement services

Optional—but strongly recommended by AVID experts: Foreign workers should understand their rights before arriving in Canada. This knowledge helps identify legitimate employers and avoid potential exploitation situations.