Who Is the Employer in an LMIA Application?

EN 简体中文繁體中文

ESDC clarifies how it identifies the employer. Businesses with multiple entities should review their arrangements carefully.

The company signing an LMIA application is not necessarily the employer Service Canada recognizes. The assessment considers the actual employment relationship, rather than the name on the application alone. Complex corporate structures can create a gap between the applicant and the entity that actually employs and manages the worker.

What changed

On September 18, 2026, ESDC added an “Employers” section to the Recognized Employer Pilot (REP) program requirements. The guidance also appears on the high-wage LMIA requirements page. It should not be described as applying only to REP, nor should the page update alone be characterized as a newly created, standalone eligibility test. Applicants must still check all current requirements for their particular stream.

Nine factors considered together

Responsibility for employer obligations under the TFWP, IRPA and IRPR.
The entity benefiting directly from the worker’s labour.
Control over work location, schedule and methods.
Responsibility for wages and other compensation.
Hiring, defining duties and expectations, and monitoring performance.
Authority to dismiss the worker.
The worker’s understanding of who employs them.
The employer signing the employment agreement no later than the first working day.
Actual management, supervision, pay and administration, including income tax, CPP/QPP and EI deductions.

Together, these factors address who actually exercises employer authority and carries the corresponding responsibilities.

REP has not reopened. It stopped accepting new participants on September 16, 2024 and is scheduled to end on December 31, 2026. Updating its guidance does not reopen enrolment.

Arrangements that deserve closer review

Related companies sharing employment functions

Within a corporate group, hiring, payroll and supervision may be divided among separate entities. The company submitting the LMIA may therefore differ from the one managing the worker.

Illustrative example, not an identifiable client case: Company A holds the business licence and submits the LMIA. Related Company B pays the worker, while Company C assigns duties, reviews performance and approves leave. Although the companies belong to the same group, they are legally separate. The evidence points to different entities for employer obligations, compensation and supervision, creating questions that should be addressed before filing.

Employees working at a client’s premises

Where the applicant and the business operating the worksite differ, the client may control daily instructions, attendance and on-site supervision.

The applicant should be able to explain its continuing authority and responsibilities, including pay, performance management and decisions about continued employment. If those functions have effectively transferred to the client, the applicant’s claim to be the employer may be questioned. Working at a client site does not, by itself, settle the issue.

Hiring through a staffing agency or recruiter

Using a recruiter is common and does not itself create a problem. The question is what happens after recruitment: does the employee know who their employer is, who manages the work, and whether the employment agreement and payroll records identify the same entity as the LMIA application?

Ongoing agency involvement in management, pay or performance reviews requires closer examination. ESDC expressly states that staffing or employment agencies recruiting workers for other businesses are not considered employers under the TFWP and cannot be approved to hire temporary foreign workers for those businesses on that basis.

Calling an employee an independent contractor

A contractor label does not resolve a relationship that operates as employment. Review arrangements in which a worker is described as an independent contractor but is managed as an employee.

Without an employer–employee relationship, an applicant cannot be approved to hire a temporary foreign worker. After approval, the employer cannot reclassify the worker as an independent contractor to avoid payroll, compensation or program obligations. Non-compliance can result in administrative penalties or program bans; the outcome depends on the facts and applicable rules.

Six checks before submitting the LMIA

Does the applicant match the entity actually paying the worker?
Who determines hours, location, duties and day-to-day supervision?
Who manages performance and has dismissal authority?
Do the advertisement, offer, employment agreement and payroll records consistently identify the employer?
At a client worksite, which decisions belong to the client and which remain with the applicant?
Does a contractor agreement disguise an arrangement managed as employment?

The purpose of this checklist is to replace assumptions with facts that can be documented. The more complex the structure, the more useful it is to resolve inconsistencies before an officer raises them.

If your business uses related companies, client-site placements or recruitment agencies, contact info@inkway.org to discuss an assessment of the employer relationship. A short description of your corporate structure and employment arrangements can help identify the documents to review next.

Official sources

Original manuscript review credited to Shijian Liu, RCIC-IRB, College ID R1053355. Registration can be checked through the CICC.

Adapted from the September 22, 2026 manuscript; official information rechecked on September 23, 2026. This article provides general information, not advice on a specific case. An LMIA assessment depends on the actual employment arrangements and current requirements.