Service Canada published updated employer guidance across multiple major Temporary Foreign Worker Program streams on September 18, 2026, establishing explicit criteria for determining which entity qualifies as the employer when a Labour Market Impact Assessment application is assessed.
The new guidance defines who Service Canada considers the true employer of a temporary foreign worker and outlines the factors officers will evaluate during the LMIA review process.
It also addresses two arrangements that have generated growing concern in the program: staffing agencies applying for LMIAs on behalf of workers who actually perform duties for another business and employers classifying temporary foreign workers as independent contractors instead of employees.
The September 18 update is published employer-assessment guidance, not a new law passed by Parliament or a formal regulation change under the Immigration and Refugee Protection Regulations.
Employment and Social Development Canada, the federal department that administers the LMIA process through Service Canada, added the guidance to its program requirements pages for employers.
IRCC, which handles immigration status and work permits separately, was not the authority behind this particular update, although LMIA decisions feed directly into the work permit application process that IRCC administers.
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Canada Updates LMIA Employer Requirements
The updated guidance appears under a section titled “Employers” and marked “New: September 18, 2026” across multiple official TFWP program-requirements pages, including the high-wage stream, the low-wage stream, the Global Talent Stream, the Agricultural Stream, the Seasonal Agricultural Worker Program, the in-home caregiver program, LMIAs supporting permanent residence, and the Recognized Employer Pilot.
These pages contain the same core employer definition, assessment criteria, staffing-agency restriction, and independent-contractor provisions, establishing a consistent employer-employee relationship standard across these TFWP pathways.
The September update follows other recent changes to TFWP guidance, including an August 18 update to the low-wage workforce-cap requirements for employers with fewer than ten employees at a work location, and continues a pattern of ESDC tightening program requirements that began with the October 2024 reforms.
Who Is Considered The Employer For An LMIA?
Under the September 18 guidance, Service Canada defines an employer as the entity that hires the temporary foreign worker, sets their working conditions, and directly pays them.
That entity can be a person, a business, a corporation, or an organization.
When reviewing an LMIA application, Service Canada will determine whether the applicant is actually the employer by evaluating a series of factors that collectively describe the real working relationship between the entity and the worker.
The assessment factors published in the updated guidance include:
- Who is obligated to meet all TFWP requirements under the Immigration and Refugee Protection Act and its regulations
- Who directly benefits from the work performed by the temporary foreign worker
- Who has the authority to decide where, when, and how the work will be done
- Who is responsible for paying wages and other compensation
- Who employs the workers, determines job duties, defines job expectations, and monitors performance
- Who has the authority to fire or dismiss the worker
- Who the temporary foreign worker recognizes as their employer
- Who signs and concludes the employment agreement as the employer on or before the first day of work
- What the characteristics of the relationship between the employer and the worker are, including management, supervision, remuneration, and administration of statutory benefits such as income tax, CPP, QPP, and Employment Insurance
The guidance further states that an employer-employee relationship exists when an employer hires a worker, directs their duties, and pays them for their work.
The employer must make an offer of employment and provide employment for a specified period of time to the temporary foreign worker, who provides labour in return for compensation.
This relationship is confirmed in the employment agreement that both the employer and the worker sign on or before the first day of work, and it helps ensure that a genuine job offer exists with a set wage rate and clear working conditions.
New LMIA Guidance For Staffing And Employment Agencies
One of the most significant elements of the September 18 update is a direct statement about staffing and employment agencies.
The official guidance states that staffing or employment agencies who recruit workers for other businesses are not considered employers under the Temporary Foreign Worker Program.
It adds that such agencies cannot be approved to hire a temporary foreign worker for other businesses because an employer-employee relationship does not exist in that arrangement.
This language is published identically across the TFWP program requirements pages that received the September 18 update, including the high-wage, low-wage, Global Talent Stream, agricultural stream, Seasonal Agricultural Worker Program, in-home caregiver, permanent residence supporting LMIA, and Recognized Employer Pilot pages.
It is important to understand precisely what this guidance says and does not say, especially for employers and workers navigating multi-party hiring arrangements.
The guidance targets a specific scenario: an agency recruits a foreign worker, applies for the LMIA, but the worker actually performs their daily duties for a separate client business that controls the work.
In that scenario, the agency would not qualify as the employer because the required employer-employee relationship does not exist between the agency and the worker.
Service Canada would assess the actual working arrangement using the published employer factors to determine which entity qualifies as the employer.
Example (for illustration, not an official government scenario): A staffing company based in Ontario recruits a food processing worker from overseas and submits an LMIA application naming itself as the employer.
However, the worker will report daily to a meat processing plant owned by a separate company, which sets the schedule, assigns duties, supervises performance, and determines the working conditions.
Under the September 18 guidance, Service Canada would evaluate who actually controls the work, pays the wages, sets the schedule, and benefits from the labour.
If those factors point to the meat processing plant rather than the staffing company, Service Canada could determine that the agency is not the employer for TFWP purposes, and the LMIA application would not be approved under the agency.
The guidance does not say that staffing agencies are banned from operating in Canada or that all agency-based employment arrangements are invalid.
It specifically addresses the situation where the required employer-employee relationship between the LMIA applicant and the worker does not exist because a different entity actually functions as the employer.
Temporary Foreign Workers Cannot Simply Be Classified As Contractors
The September 18 update also contains explicit language about employer misclassification of temporary foreign workers as independent contractors.
The guidance states that employers cannot classify temporary foreign workers as independent contractors.
It describes misclassification as non-compliant under the TFWP and explains that this practice can weaken wage protections, allow employers to avoid required deductions for income tax, CPP, or QPP, and Employment Insurance, and violate federal or provincial employment laws.
Employers must ensure that a worker’s status reflects the employer-employee relationship identified in the approved LMIA and the employment agreement.
The guidance explicitly states that employers will not be approved to hire a temporary foreign worker where an employer-employee relationship does not exist.
It also addresses post-approval behaviour: after receiving an approved LMIA, employers cannot reclassify a temporary foreign worker as an independent contractor or structure the relationship to avoid payroll, compensation, or program requirements.
Non-compliant employers face consequences including administrative monetary penalties and bans from the TFWP, and they could be publicly listed on federal or provincial government websites such as the Labour Program’s public naming database of employers found in violation of the Canada Labour Code.
The guidance specifically references the trucking sector, pointing to ESDC’s existing awareness kit on misclassification in the road transportation industry as additional context.
Which LMIA Streams Have The September 18 Update?
Service Canada added the new Employers section to multiple Temporary Foreign Worker Program requirements pages on September 18, 2026.
The updated employer definition and assessment framework is confirmed on the program requirements pages for:
- the high-wage stream
- the low-wage stream
- the Global Talent Stream
- the Agricultural Stream
- the Seasonal Agricultural Worker Program
- in-home caregivers
- LMIAs supporting permanent residence
- the Recognized Employer Pilot
Each of these pages now sets out the same core criteria for determining whether the LMIA applicant is genuinely the employer, along with the restrictions involving staffing agencies and the misclassification of temporary foreign workers as independent contractors.
What This Means For Foreign Workers
For temporary foreign workers currently in Canada or planning to arrive, the September 18 guidance reinforces the importance of understanding who the actual employer is in any LMIA-based work arrangement.
The entity named as the employer on an LMIA application and employment agreement should be the same entity that hires the worker, directly pays their wages, sets their schedule, supervises their work, and has the authority to terminate the employment.
Workers should verify that their employment agreement is signed by the same entity that will actually control their daily working conditions, because the LMIA and employment agreement must reflect the real working relationship.
If a worker discovers that they are reporting to a different company than the one named on their LMIA or work permit, that disconnect could create compliance issues that affect both the employer and the worker.
The guidance does not say that workers currently in Canada on valid work permits will automatically lose their status as a result of this update, and workers who believe they are experiencing abuse or exploitation can apply for an open work permit for vulnerable workers through IRCC.
What Employers Should Review Before Filing An LMIA
Any employer preparing a new LMIA application after September 18, 2026, should evaluate whether their arrangement aligns with the published employer definition and assessment factors.
A practical review checklist based on the official assessment criteria would include confirming:
- The entity applying for the LMIA is the same entity that will directly hire and employ the worker
- The employment agreement will be signed by that entity as the employer on or before the first day of work
- That entity will be responsible for directly paying wages, including statutory deductions for income tax, CPP or QPP, and Employment Insurance
- That entity will determine the work location, schedule, duties, and performance expectations
- That entity retains the authority to dismiss or terminate the worker
- The worker will recognize that entity as their employer in practice
- No third-party client or staffing agency arrangement exists that would shift the actual employment relationship to a different entity
- The worker is classified as an employee, not an independent contractor, for payroll and employment law purposes
Employers who currently use staffing agencies, labour brokers, or client-placement models to deploy temporary foreign workers should review those arrangements carefully against the published factors before submitting any new LMIA application.
Does This Affect Existing LMIAs Or Work Permits?
The September 18 guidance itself does not announce any automatic cancellation of existing positive LMIAs or revocation of work permits already issued by IRCC.
It does not establish a transition period, a deadline for employers to restructure existing arrangements, or a retroactive application date.
The published guidance describes the criteria that Service Canada will apply when assessing LMIA applications, and it describes compliance obligations that already exist under the TFWP’s employer compliance regime.
Employers found to be non-compliant with program conditions can face administrative monetary penalties and program bans under the existing compliance framework, but the September 18 guidance does not create a new enforcement mechanism.
Workers holding valid employer-specific work permits issued before September 18 should not assume their permits are automatically invalidated by this guidance update.
Employers may still be inspected for compliance with the conditions attached to their LMIA and employment relationship for up to six years after the temporary foreign worker starts working.
Service Canada advises employers to retain relevant records during this period.
The September 18 guidance itself, however, does not state that existing positive LMIAs are automatically reassessed under the newly published employer criteria.
This new employer guidance published by Service Canada formalizes assessment criteria that give officers a clear framework for evaluating whether an LMIA applicant is genuinely the employer of a temporary foreign worker.
By publishing identical language across the high-wage, low-wage, Global Talent Stream, agricultural, Seasonal Agricultural Worker Program, in-home caregiver, permanent residence, and Recognized Employer Pilot requirements, ESDC has signalled that the employer-employee relationship standard applies consistently across these TFWP pathways.
The staffing agency provision directly addresses arrangements in which an agency recruits a temporary foreign worker for another business even though the required employer-employee relationship does not exist between the agency and the worker.
The independent contractor provision reinforces that the TFWP requires a genuine employment relationship and that misclassification will not be tolerated.
For employers, the practical message is straightforward: the entity that applies for the LMIA must genuinely function as the employer based on the factors Service Canada considers, including hiring, supervision, wage payment, and termination authority.
For foreign workers, the guidance underscores the importance of verifying that the employer named on the LMIA and employment agreement is the same entity that actually employs them in practice.
Frequently Asked Questions (FAQs)
Can a staffing agency still apply for an LMIA to hire a temporary foreign worker in Canada?
Under the September 18, 2026, guidance, staffing or employment agencies that recruit workers for other businesses are not considered employers under the Temporary Foreign Worker Program because the required employer-employee relationship does not exist between the agency and the worker when a separate business controls the daily work. The guidance does not ban staffing agencies from operating in Canada, but it does mean an agency cannot be approved as the LMIA employer if another entity functions as the actual employer in practice.
Does the September 18, 2026 LMIA update cancel any existing work permits?
The published guidance does not announce automatic cancellation of existing work permits or positive LMIAs. It describes the assessment criteria Service Canada will apply when evaluating LMIA applications going forward. Workers holding valid work permits should not assume their permits are automatically affected, although employers may face compliance scrutiny under the current TFWP enforcement framework.
How does Service Canada determine who is the real employer for an LMIA?
Service Canada evaluates multiple factors, including who hires the worker, who directly pays wages and makes statutory deductions, who controls where, when, and how the work is performed, who supervises and monitors performance, who has the authority to dismiss the worker, who signs the employment agreement, and who the worker recognizes as their employer. Service Canada considers these factors collectively when determining whether the LMIA applicant is actually the employer.
Can a Canadian employer classify a temporary foreign worker as an independent contractor?
No, the September 18, 2026, guidance states that employers cannot classify temporary foreign workers as independent contractors. Misclassification is non-compliant under the TFWP and can result in administrative monetary penalties, bans from the program, and public naming on government websites. Employers also cannot reclassify a worker as a contractor after receiving an approved LMIA.
Which LMIA streams contain the new September 18, 2026 employer guidance?
The September 18 employer guidance is confirmed across multiple TFWP program-requirements pages, including the high-wage stream, low-wage stream, Global Talent Stream, Agricultural Stream, Seasonal Agricultural Worker Program, in-home caregivers, LMIAs supporting permanent residence, and the Recognized Employer Pilot.
Fact-Checked: All employer definition criteria, staffing-agency provisions, independent-contractor restrictions, and enforcement consequences cited in this article were verified against the official ESDC program requirements for the Temporary Foreign Worker Program as published on Canada.ca with a page date of September 18, 2026.
Disclaimer: This article is for informational purposes only and does not constitute legal or immigration advice. Employers and foreign workers should consult a qualified immigration professional or review the official Service Canada employer compliance guidance for requirements specific to their situation.
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