Canada LMIA Rules: Staffing Agencies Can’t Be TFW Employers

Canada LMIA rules for low-wage jobs now state clearly that staffing agencies cannot be the employer for a temporary foreign worker, and that workers cannot be hired as independent contractors. Employment and Social Development Canada (ESDC) set this out on its low-wage program requirements page, last modified on 22 September 2026. The page also confirms a 10% cap on low-wage foreign workers at most work locations.

Key facts

• ESDC’s low-wage Temporary Foreign Worker (TFW) Program requirements page was modified on 22 September 2026.
• An employer is the entity that hires the worker, sets working conditions and pays the worker directly.
• Staffing or employment agencies that recruit for other businesses are not considered employers under the program.
• Classifying a temporary foreign worker as an independent contractor is non-compliant.
• Low-wage cap: 10% of workers at a work location, or 20% in some sectors such as construction, food manufacturing, hospitals and nursing and residential care.

What changed

The ESDC page now explains in plain terms who can apply for a Labour Market Impact Assessment (LMIA). It says an employer is the entity that hires the temporary foreign worker, sets their working conditions and pays them directly. This can be a person, business, corporation or organisation.

It also says agencies that recruit workers for other businesses are not employers under the TFW Program, and cannot be approved to hire temporary foreign workers for other entities.

On contractors, ESDC says employers cannot treat temporary foreign workers as independent contractors. The page states: “Misclassification is non-compliant under the TFW Program.”

Other low-wage rules on the same page include:

• advertising on Job Bank for at least 8 consecutive weeks within the 3 months before applying;
• efforts to recruit youth aged 15 to 30;
• at least 2 more recruitment methods aimed at under-represented groups;
• no processing of low-wage LMIAs in census metropolitan areas with unemployment of 6% or higher, a rule in place since 26 September 2024.

The 8-week advertising and youth recruitment rules took effect on 1 April 2026, according to Fragomen, an immigration law firm.

Who is affected

These Canada LMIA rules affect employers who want to hire low-wage temporary foreign workers, and the workers they hire. They matter most to workers who were recruited through an agency or offered a “contract” role, for example in warehouses, cleaning, food processing, hospitality or caregiving.

What it means for Nepali and Indian workers

Many Nepali and Indian workers find Canadian jobs through agents and recruitment agencies. Under the ESDC wording, the business that controls and pays for your work must be the LMIA employer. An agency that only places you at another company cannot hold the LMIA for that job.

This gives workers a clear check. If someone offers you an LMIA job, the name on the LMIA should be the business you will actually work for and that will pay you. If you are told you will be paid as a “contractor” on a TFW work permit, ESDC says that is not allowed.

Fake LMIA offers and fees charged by agents are a known risk. If an offer seems unusual, ask questions before you pay anything or resign from your current job. If you were refused a visa after a bad offer, see our guide on what to do after a visa refusal.

What to do now

1. Ask for the name of the employer on the LMIA and check it matches the business where you will work.
2. Make sure your offer shows you as an employee with wages paid directly by the employer, not as a contractor.
3. Be careful of any agent who says their agency will be your employer for a job at a different company.
4. Read the ESDC low-wage requirements page yourself before accepting an offer.
5. Keep copies of your offer letter, contract and LMIA details.

What we don’t know yet

The ESDC page shows a modified date of 22 September 2026, but it does not say exactly when the employer definition wording was added. One news site, Immigration News Canada, reports it was published on 18 September 2026 and added to other TFW stream pages too, such as high-wage and agricultural streams. We have only checked the low-wage page. ESDC has not issued a news release explaining the change, and it is not yet clear how it will be enforced for agencies already involved in placements.

Frequently asked questions

Can a staffing agency get an LMIA for me to work at another company?

According to ESDC, staffing or employment agencies that recruit workers for other businesses are not considered employers and cannot be approved to hire temporary foreign workers for other entities.

Can I work as an independent contractor on an LMIA-based work permit?

No. ESDC says employers cannot classify temporary foreign workers as independent contractors.

What is the cap on low-wage foreign workers?

Generally 10% of workers at a work location. A 20% cap applies in sectors such as construction, food manufacturing, hospitals and nursing and residential care.

Sources

• Program requirements for low-wage positions (ESDC, canada.ca)
• Canada: New Recruitment Requirements for Low-Wage Positions under Temporary Foreign Worker Program (Fragomen, 2 April 2026)
• New Canada LMIA Rules Now Clarify Who Can Hire Foreign Workers (Immigration News Canada)

Last checked: 2 October 2026. This is general information, not immigration advice.