Canada has introduced updated LMIA employer requirements that clarify how Service Canada determines who is actually employing a temporary foreign worker.
The updated guidance was published on September 18, 2026, across several Temporary Foreign Worker Program (TFWP) streams. The changes are particularly important for businesses using staffing agencies, third-party arrangements or contractor models.
Importantly, this is updated employer-assessment guidance, rather than a new law passed by Parliament. The guidance explains how Service Canada assesses the employer-employee relationship when reviewing an LMIA application.
Who Is the Employer Under the New LMIA Guidance?
Under the updated Canada LMIA rules, the employer is generally the entity that hires the temporary foreign worker, controls their working conditions and directly pays them.
Service Canada can look at several factors, including:
- Who determines the worker’s duties and schedule
- Who controls where, when and how the work is performed
- Who pays the worker’s wages and required deductions
- Who supervises and evaluates the worker
- Who has the authority to terminate employment
- Who benefits directly from the worker’s services
- Who signs the employment agreement
- Who the worker considers to be their employer
This means the company named in an LMIA application must genuinely function as the employer in practice, not simply appear as the employer on paper.
Staffing Agencies Face Greater Scrutiny
One of the most important points in the new guidance concerns staffing agencies and LMIA applications.
Service Canada states that a staffing or employment agency recruiting workers for another business is not considered the employer when the other business is actually controlling the worker’s employment.
For example, if an agency recruits a foreign worker but a separate company determines the employee’s duties, schedule, supervision and working conditions, Service Canada may determine that the agency does not have the required employer-employee relationship.
This does not mean staffing agencies are banned in Canada. Rather, the LMIA applicant must genuinely be the employer for TFWP purposes.
Temporary Foreign Workers Cannot Simply Be Classified as Contractors
The updated LMIA employer requirements also specifically address independent contractors.
Employers cannot classify a temporary foreign worker as an independent contractor where an employer-employee relationship actually exists. According to the federal guidance, misclassification can weaken wage protections, affect required payroll deductions and violate applicable employment laws.
Employers also cannot receive an approved LMIA and subsequently restructure the relationship simply to classify the worker as a contractor or avoid program obligations.
Non-compliance can result in administrative monetary penalties, a ban from the Temporary Foreign Worker Program, and possible public disclosure of violations.
Which LMIA Programs Are Covered?
The September 18 guidance appears across multiple TFWP requirements pages, including:
- High-Wage LMIA
- Low-Wage LMIA
- Global Talent Stream
- Agricultural Stream
- Seasonal Agricultural Worker Program
- In-Home Caregiver positions
- LMIAs supporting permanent residence
- Recognized Employer Pilot
The same core employer-employee relationship principles are reflected across these programs.
What Does This Mean for Foreign Workers?
Foreign workers should pay close attention to the employer identified in their LMIA, employment agreement and work permit.
The business named as the employer should correspond with the actual employment arrangement. Workers should understand who will pay them, supervise their work, establish their schedule and provide their working conditions.
The September 18 guidance does not announce an automatic cancellation of existing positive LMIAs or valid work permits. However, employers remain subject to the TFWP’s existing compliance requirements.
What Should Employers Do Before Applying for an LMIA?
Before submitting an LMIA application in Canada, employers should review whether:
- The applicant is genuinely hiring the foreign worker.
- The applicant will directly pay wages.
- The applicant controls the employee’s duties and working conditions.
- The employment agreement identifies the correct employer.
- The worker will be treated as an employee rather than incorrectly classified as a contractor.
- Any staffing or recruitment arrangement accurately reflects the real employment relationship.
Employers must also meet the other requirements applicable to their particular LMIA stream, including business legitimacy, recruitment, wages and employment conditions.
How ICC Immigration Can Help You Plan Your Future in Canada
Understanding Canada immigration rules, LMIA requirements and work permit options can be complicated, particularly as program requirements continue to change.
ICC Immigration can assess your circumstances and explain immigration pathways that may be relevant to your long-term plans in Canada.
Our services include:
- Permanent Residency Applications: Assistance with Express Entry, Provincial Nominee Programs (PNPs) and other permanent residence pathways.
- Work Permits and Study Permits: Guidance on temporary immigration options that may support your career or education plans.
- Family Sponsorship: Assistance with applications designed to reunite eligible family members in Canada.
- Professional Immigration Guidance: Help understanding eligibility requirements, documentation and application procedures under current immigration rules.
If you are considering an LMIA, work permit, Express Entry, PNP or another Canadian immigration pathway, obtaining advice based on your individual circumstances can help you understand your available options and the requirements you need to meet.
Whether you are already in Canada or planning your immigration journey, ICC Immigration can help you navigate the application process with clear, practical guidance.