Behind Canada’s stricter immigration rules: Understanding the basics of hiring foreign workers

Demystify the underlying logic of the immigration policy in different countries

Canada recently announced plans to lower the number of low-wage, temporary foreign workers and permanent residents that are being let into Canada.

The changes will include refusing to process some work permits in areas where the unemployment rate is 6% or higher and reducing the share of low-wage temporary foreign workers that employers can hire from 20% to 10% of their overall workforce. These changes will be effective Sept. 26.

The country loosened the Temporary Foreign Worker program restrictions back in 2022 to help businesses with labor shortages after the Covid pandemic. As a result, nearly 183,820 temporary foreign worker permits were granted in 2023, an 88% increase from 2019.

With the recent changes, however, the government is bringing back pre-pandemic rules as an effort to limit the number of people coming into the country in response to mounting criticism of the recent influx in temporary foreign workers.

For organizations that look to hire foreign nationals or send employees to work in another country, navigating the ever-changing global mobility landscape could be a critical challenge. However, if we look closely at the immigration laws and requirements in different countries, the underlying logic is essentially the same, although the detailed rules and number of annual immigration targets may evolve as the situation changes.

Understanding the basics of immigration policy will help organizations stay assured amidst all the changes and uncertainties.

Immigration cuts in Canada: solving talent shortage vs. protecting local workers

The key thoughts behind any immigration policy design usually revolve around the balance of solving talent shortage and protecting local workers. As in the case of Canada’s recent changes, the concern for local employment protection turned to be more prominent.

Solving talent shortages, especially the desire to attract highly skilled workers, has always been a major driver for absorbing immigrants. Educational qualifications, salary, and relevant work experiences are common requirements for visa and work permit applications, and talent from the sectors where the shortage of available workforce is more evident could be even more favorably considered. For example, the income requirement for talent with expertise in MINT (mathematics, informatics, natural sciences, technology) and medicine is lower in the EU Blue Card application.

The flip side is the need to protect local hires. Many countries — including Indonesia, Thailand, Brazil, and Saudi Arabia — have quota requirements in place, dictating a ratio between local and foreign nationals that sponsoring employers must adhere to. These policies are designed to promote employment opportunities for local job seekers and ensure that employers prioritize local candidates and skills.

Key considerations for employers

While each country has its own requirements in terms of visa and work permit applications, there are some common considerations that employers can follow:

• Choose the right type: There are various types of visa and work permit available in each country, spanning from temporary work permit, highly skilled visa to intra-company transfer permit. Understanding the differences of various types and choosing the right type to apply according to your business needs as well as your employee’s situation is the essential first step.

• Meet the requirements: Both employees and sponsoring employers need to meet certain requirements for visa and work permit applications. The common criteria for employees include educational background, work experience, and salary, while employers may need to fulfill minimum capital and local vs. foreign quota requirements.

• Partner with an Employer of Record (EOR): Instead of navigating all the complexities by yourself, you may also consider working with a direct EOR provider like Atlas, who owns and manages entities in over 160 countries and has the knowledge to advise on the visa types and application processes in each country. Atlas can also act as the sponsoring employer for visa and work permit applications as your employees’ legal employer, which will help you to simplify the process and make hiring foreign nationals hassle-free.