Canada Expands Low-Wage TFW Access for Multi-Location Employers

Employment and Social Development Canada (ESDC) has updated the Temporary Foreign Worker Program (TFWP) rules for employers with fewer than 10 employees at a given work location. The change affects how the cap on low-wage temporary foreign workers is calculated for low-wage Labour Market Impact Assessment (LMIA) applications.

If you are an employer with multiple locations, each of which has fewer than 10 employees, this could apply to you. Before, the LMIA cap for low-wage employees applied if your entire company had fewer than 10 employees. With the new change, that cap is now applied to each location. As a result, businesses with multiple locations may now be able to hire more low-wage temporary foreign workers than they could before.

Here’s what changed and what it could mean for employers.

Key Takeaways

• ESDC has updated the LMIA rules for employers with fewer than 10 employees at a given work location.
• The low-wage temporary foreign worker cap is now calculated separately for each eligible work location instead of across the employer’s entire workforce.
• Employers with work locations that have fewer than 10 employees can hire up to one low-wage TFW per qualifying location, or up to two in sectors subject to the 20% cap.
• The change could benefit businesses with multiple small locations, such as franchises, retail stores, restaurants, and private households.

Low-Wage LMIA Cap Variation Now Applies Per Work Location

The Temporary Foreign Worker Program limits the number of low-wage temporary foreign workers that most employers can hire.

In most industries, employers can hire low-wage temporary foreign workers for up to 10% of their workforce. Certain sectors, including construction, food manufacturing, hospitals, nursing and residential care facilities, and some in-home caregiver occupations, may hire up to 20%. There is also a temporary measure in effect from April 1, 2026, to March 31, 2027, that increases the cap to 15% for eligible rural employers.

Previously, employers with fewer than 10 employees qualified for a variation that treated their workforce as 10 employees when calculating the cap. This allowed them to hire at least one low-wage temporary foreign worker, or up to two where the 20% cap applied.

The recent update changes who can use that variation. Instead of applying only when an employer has fewer than 10 employees, it now applies separately to each work location with fewer than 10 employees. This means even large employers may qualify for the variation at individual locations with small workforces.

Which Employers Benefit Most from This Change?

The change mainly benefits employers that operate multiple locations where individual worksites have fewer than 10 employees.

Consider a restaurant chain with five locations, each employing six people.

Under the previous rules, the employer had a total workforce of 30 employees. Applying the standard 10% cap meant the employer could hire up to three low-wage temporary foreign workers across the business. Because the employer had more than 10 employees overall, it was not eligible for the small-employer variation.

Under the updated rules, each restaurant location is assessed separately. Since each location has fewer than 10 employees, each location may qualify for the variation and hire one low-wage temporary foreign worker. That means the employer could potentially hire up to five low-wage temporary foreign workers instead of three, provided all other LMIA requirements are met.

The change may be particularly helpful for businesses with multiple retail stores, restaurants, franchise locations, childcare centres, clinics, or other employers that operate several small worksites.

How is Workforce Size Calculated for LMIA Purposes?

For employers with multiple work locations, ESDC now calculates workforce size separately for each location.

The calculation includes:

• all full-time and part-time employees working at that location, including Canadians, permanent residents, and temporary foreign workers,
• employees on leave who are expected to return
• vacant positions requested in the LMIA application
• temporary foreign workers with previously approved LMIAs who have not yet started work

Part-time employees count as half an employee when calculating the workforce size. A full-time employee is someone who works an average of at least 30 hours per week.

How Many Low-Wage TFWs Can a Small Work Location Hire?

For a qualifying work location with fewer than 10 employees, ESDC calculates the cap as though the location has a workforce of 10 employees.

This means an eligible work location may hire:

• one low-wage temporary foreign worker if subject to the standard 10% cap
• two low-wage temporary foreign workers if subject to the 20% cap that applies to certain sectors and occupations

For example, if a retail store has six employees, 10% of its actual workforce would equal 0.6 workers. Instead of rounding down, ESDC treats the location as having 10 employees, allowing the employer to hire one low-wage temporary foreign worker at that location.

Similarly, a qualifying work location in a sector subject to the 20% cap would be treated as having 10 employees, allowing it to hire up to two low-wage temporary foreign workers.

The employer must still complete the “Cap for low-wage positions” section of the LMIA application.

Does This Change Other LMIA Requirements?

No, the update only changes how the low-wage cap variation applies to employers with fewer than 10 employees at a given work location.

Employers must still meet all other Temporary Foreign Worker Program requirements, including:

• demonstrating they made reasonable efforts to recruit Canadians and permanent residents first. For the low-wage LMIA stream, this includes advertising the position for at least eight weeks.
• offering wages that meet program requirements
• meeting transportation, housing, health insurance, and other obligations for low-wage temporary foreign workers, where applicable
• obtaining a positive or neutral LMIA before hiring a worker through the low-wage stream

The existing restrictions on low-wage LMIA applications also continue to apply, including the refusal to process certain low-wage LMIA applications in census metropolitan areas with unemployment rates of 6% or higher.

What This Means for Employers

For employers operating multiple small worksites, the update provides greater flexibility when addressing labour shortages.

Instead of having all employees counted together for the purpose of this variation, each qualifying location is assessed on its own. This could allow employers with several small workplaces to hire more low-wage temporary foreign workers than they could under the previous policy, while continuing to meet the overall requirements of the Temporary Foreign Worker Program.