Canada’s low-wage Labour Market Impact Assessment rules continue to limit how many temporary foreign workers an employer can hire in lower-paid positions. Employment and Social Development Canada updated its guidance in August 2026, including clearer rules for small employers with fewer than 10 employees.
The default cap is generally 10% of an employer’s workforce at a specific work location, while certain sectors can use a 20% cap. The rules are intended to limit reliance on low-wage temporary foreign labour while still allowing employers in selected sectors to address labour shortages.
2026 Low-Wage LMIA Rules
| Rule | Current position |
|---|---|
| Standard low-wage cap | 10% |
| Higher cap for selected sectors | 20% |
| Small employer under 10% cap | Generally up to 1 low-wage TFW |
| Small employer under 20% cap | Generally up to 2 low-wage TFWs |
| LMIA processing fee | $1,000 per position, subject to program rules |
| Employer pays recruitment costs | Yes |
What is a low-wage LMIA?
Under the Temporary Foreign Worker Program, a job is usually treated as low-wage when the offered wage is below the provincial or territorial wage threshold used by ESDC.
Employers seeking to hire a foreign worker in such a role usually need a positive Labour Market Impact Assessment unless another exemption applies.
The standard cap is 10%
For most employers, the number of low-wage temporary foreign workers at a work location cannot exceed 10% of the workforce used in the cap calculation.
This means a business cannot simply submit unlimited low-wage LMIA applications even if it says it has difficulty recruiting.
Some sectors can use a 20% cap
ESDC allows a higher 20% cap for selected sectors and occupations that are considered to have stronger labour needs.
Current guidance includes selected positions in:
- construction;
- food manufacturing;
- hospitals;
- nursing and residential care facilities; and
- certain in-home caregiver occupations.
Employers still need to meet the rest of the Temporary Foreign Worker Program requirements.
Small employers have special cap calculations
The 2026 guidance clarifies how the cap works for employers with fewer than 10 employees at the work location.
Where the 10% cap applies, a qualifying small employer may generally be allowed to hire up to one low-wage temporary foreign worker. Where the 20% cap applies, the maximum can generally be two.
The 6% unemployment rule can block processing
ESDC also applies a refusal-to-process rule for certain low-wage LMIA applications in census metropolitan areas where the unemployment rate is 6% or higher.
This rule does not apply to every occupation or every sector. Employers need to check whether the position falls within an exempt category and whether the current unemployment rate rule applies to the work location.
Some sectors and positions are exempt from normal caps
Temporary Foreign Worker Program rules include exemptions for certain types of work, such as some seasonal positions and selected agriculture-related employment. The exact exemption depends on the occupation and program stream.
Employers should use the official low-wage LMIA requirements page instead of relying on general summaries.
The employer must pay the LMIA fee
The standard LMIA processing fee is generally $1,000 per requested position, subject to program exemptions.
Employers cannot normally recover this fee from the foreign worker. They are also responsible for recruitment and other employer-side costs that the program says cannot be passed to the worker.
Recruitment is still required
A positive LMIA is based on the employer showing a genuine labour need and completing required recruitment efforts before hiring a temporary foreign worker.
Posting a job only to support a foreign worker application without making genuine efforts to recruit Canadians or permanent residents can create compliance problems.
A positive LMIA is not a work permit
This is one of the most important distinctions for workers.
A positive LMIA supports the employer’s request to hire a foreign worker, but the worker normally still needs to apply to Immigration, Refugees and Citizenship Canada for the appropriate work permit.
IRCC can still refuse the work permit if the applicant does not meet immigration requirements.
Workers should be careful about job offers
Foreign workers should be cautious if an employer or recruiter asks them to pay:
- the employer’s LMIA fee;
- recruitment fees that the employer is responsible for;
- money for a guaranteed LMIA approval; or
- money for a guaranteed Canadian work permit.
Government approval cannot be guaranteed by a recruiter.
What employers should check before applying
- Correct wage stream.
- Current provincial or territorial wage threshold.
- Cap percentage for the work location.
- Whether a 6% unemployment refusal rule applies.
- Recruitment requirements.
- Accommodation, transportation or other obligations where relevant.
- Record-keeping and employer compliance requirements.
What workers should check
Workers should confirm that the employer is genuine, the job details match the LMIA-supported offer and the wage and location are clearly stated.
For broader work permit guidance, see Canadanship’s Work section. Actual Canadian vacancies are covered under Jobs.
What the 2026 update does not change
- A positive LMIA does not guarantee a work permit.
- The cap does not mean every employer can automatically hire up to the maximum.
- The 20% cap applies only where the position meets the program’s qualifying sector rules.
- Workers should not pay the employer’s LMIA processing fee.
Why Canada uses a cap system
The Temporary Foreign Worker Program is designed to address temporary labour needs when qualified Canadians and permanent residents are not available. The cap is intended to prevent an employer from building too much of its regular workforce around low-wage temporary foreign labour.
The policy also creates an incentive for employers to recruit locally, improve retention and consider wage or working-condition changes before increasing their use of the program.
High-wage and low-wage streams are different
The low-wage rules discussed here should not automatically be applied to high-wage LMIA applications. The applicable stream is determined using the wage offered and the current provincial or territorial threshold used by ESDC.
Employers should verify the threshold that applies on the date of application because these wage benchmarks can be updated.
Employer location matters
The cap is generally calculated at the specific work location rather than across an entire national company without regard to where workers are employed. A business with several locations can therefore face different calculations at different sites.
The census metropolitan area rule also makes geography important. A position in one city may face a refusal-to-process rule while a similar position in another region may not.
Recruitment records should be kept
Employers need to be able to demonstrate that required recruitment activities were completed. That means keeping copies of advertisements, dates, recruitment methods and results for the period required by the program.
Incomplete recruitment evidence can create problems even when the employer genuinely has difficulty hiring.
Workers should understand employer-specific permits
Many LMIA-supported work permits are employer-specific. That means the worker’s authorization can be tied to the named employer, occupation and location shown on the permit.
A worker should not assume they can freely move to a different employer without first checking whether a new work permit or other authorization is required.
Job-offer scams often misuse the term LMIA
Because LMIA-supported jobs are attractive to people seeking Canadian work experience, scammers sometimes advertise fake “approved LMIAs” or charge workers for documents that do not exist. A genuine employer still has legal obligations and cannot sell a guaranteed immigration outcome.
Workers should independently verify the employer, job location and contact information and should be cautious about pressure to send money quickly.
Employer compliance continues after hiring
Receiving a positive LMIA does not end the employer’s responsibilities. Employers must generally provide the wage and working conditions promised and comply with federal and provincial employment standards.
Government inspections can review whether the employer met the conditions attached to hiring temporary foreign workers.
Official Sources and What They Confirm
| Official source | Details confirmed |
|---|---|
| ESDC – Low-wage position requirements | 10% and 20% cap rules, small-employer calculations, exemptions and low-wage LMIA requirements. |
| ESDC – Temporary Foreign Worker Program | Overall employer requirements, LMIA process and program responsibilities. |
Last verified August 26, 2026. Employers and workers should confirm current thresholds and exemptions before submitting an LMIA or work permit application.