Employment and Social Development Canada (ESDC) has updated the Temporary Foreign Worker Program requirements for employers hiring workers through the low-wage Labour Market Impact Assessment stream.
Effective through an official program-page update dated August 18, 2026, the special cap calculation for small employers is now applied to each qualifying work location with fewer than 10 employees.
Under this variation, the calculation uses a workforce size of 10. This means a qualifying employer may employ:
- Up to one temporary foreign worker in a low-wage position at a location subject to the standard 10% cap
- Up to two temporary foreign workers in low-wage positions at a location subject to the 20% cap
The current rules appear on the Government of Canada’s official program requirements for low-wage positions.
What changed on August 18?
The Temporary Foreign Worker Program generally limits the proportion of an employer’s workforce that can consist of temporary foreign workers in low-wage positions.
The standard limit is 10% at a specific work location. A 20% limit applies to certain sectors, subsectors and occupations.
For a location with fewer than 10 employees, applying the percentage directly could produce a result of less than one position under the 10% cap or fewer than two positions under the 20% cap.
The updated variation instead uses a deemed workforce size of 10 when calculating the cap at a qualifying work location.
| Worksite situation | Maximum under the variation |
|---|---|
| Fewer than 10 employees and subject to the 10% cap | 1 low-wage temporary foreign worker |
| Fewer than 10 employees and subject to the 20% cap | 2 low-wage temporary foreign workers |
The change is particularly relevant to employers operating several small branches, facilities or other worksites. Each work location must still be assessed using its own workforce information and the applicable program requirements.
This is a change to the cap calculation. It does not provide automatic LMIA approval and does not remove the employer’s other obligations.
Which employers are subject to the 20% cap?
The federal program page identifies the following sectors and positions as being subject to a 20% cap:
- Construction positions under NAICS 23
- Food manufacturing positions under NAICS 311
- Hospital positions under NAICS 622
- Nursing and residential care facility positions under NAICS 623
- Certain in-home caregiver positions
The listed in-home caregiver occupations include:
- Registered nurses and registered psychiatric nurses — NOC 31301
- Licensed practical nurses — NOC 32101
- Home childcare providers — NOC 44100
- Home support workers and related caregiver positions — NOC 44101
Employers should confirm both the correct North American Industry Classification System code and National Occupational Classification code before relying on the 20% cap.
A job title alone does not determine the correct classification. The business activity, occupation and actual duties must align with the information provided in the LMIA application.
How the workforce is calculated
For the small-worksite variation, the total workforce at a given location includes:
- Full-time and part-time employees working at that location
- Canadian citizens and permanent residents
- Temporary foreign workers hired through the LMIA process
- Employees holding other types of work permits
- Employees on leave who are expected to return
- Vacant positions for which new temporary foreign workers are requested in the LMIA application
- Temporary foreign workers covered by previously approved LMIAs who have not yet started working
A full-time employee is someone who works an average of at least 30 hours per week.
An employee working fewer than 30 hours per week is considered part-time and counts as 0.5 of an employee for the cap calculation.
Employers may be asked to provide payroll records or other documents supporting the workforce information declared in the application.
Example of the new calculation
Consider an employer operating three separate locations, each with six employees.
If the positions are subject to the standard 10% cap, the updated variation may allow up to one low-wage temporary foreign worker at each qualifying location.
If a qualifying worksite operates in a sector subject to the 20% cap, the variation may allow up to two low-wage temporary foreign workers at that location.
The calculation does not mean the employer is entitled to receive a positive LMIA. Service Canada will still review:
- Whether the business and job offer are legitimate
- Whether the offered wage meets program requirements
- Whether the employer completed the required recruitment
- Whether Canadians and permanent residents were appropriately considered
- Whether the employer can meet worker-protection obligations
- Whether the application is subject to a refusal-to-process measure
- Whether the requested number of positions remains within the applicable cap
Employers can review the Always Canada Group LMIA guide for an overview of the employer application process.
The 6% unemployment restriction still applies
The cap variation does not cancel the federal refusal-to-process rule for certain low-wage LMIA applications.
Under the current policy, certain applications are not processed when:
- The offered wage is below the applicable provincial or territorial threshold
- The work location is in a census metropolitan area with an unemployment rate of 6% or higher
Exemptions may apply to certain positions. Employers should verify the current quarterly list and the precise location of employment before submitting an application.
A worksite may satisfy the new small-location cap calculation but still be affected by the unemployment-based refusal-to-process rule.
Positions that are not subject to the cap
The federal government lists several types of positions that are exempt from the low-wage workforce cap, including:
- Qualifying on-farm primary agriculture positions
- Certain caregiving positions in healthcare institutions
- Positions supporting permanent residence only, where no work permit is requested
- Certain genuinely temporary or highly mobile positions generally lasting no more than 120 calendar days
- Qualifying seasonal positions lasting no more than 270 calendar days
Each exemption has its own conditions. Employers should not assume a position is exempt merely because it is temporary, seasonal, agricultural or connected to healthcare.
Other LMIA requirements remain in force
Employers using the low-wage stream must continue to comply with the full Temporary Foreign Worker Program requirements.
These generally include:
- Paying the $1,000 LMIA processing fee for every requested position
- Offering full-time employment of at least 30 hours per week
- Demonstrating that the business and job offer are legitimate
- Completing the required recruitment and advertising
- Offering the applicable wage for the occupation and work location
- Paying the worker’s required round-trip transportation costs
- Ensuring suitable and affordable housing is available
- Paying for private emergency health insurance when provincial or territorial coverage is unavailable
- Providing a compliant employment agreement
- Maintaining a workplace free from abuse
- Keeping records for potential inspections
Employers cannot charge the worker the LMIA processing fee or recover prohibited recruitment, transportation or health-insurance expenses from the worker.
Foreign workers should also understand that an LMIA is not itself a work permit. In most cases, the employer must first receive a positive or neutral LMIA, after which the foreign national applies to IRCC for an employer-specific work permit.
The Always Canada Group work permit guide explains the worker-side process.
What this means for temporary foreign workers
The updated calculation could create additional hiring opportunities at small worksites, particularly where the previous percentage calculation produced less than one available low-wage position.
However, a prospective worker should not treat an employer’s eligibility under the cap as proof that:
- An LMIA has been approved
- A work permit will be issued
- The job offer is genuine
- The employer is authorized to charge recruitment fees
- Permanent residence is guaranteed
Workers should request a written employment agreement and confirm that the employer has obtained the required LMIA before submitting an LMIA-based work permit application.
No worker should pay an employer or recruiter for an LMIA or job offer.
Practical next steps for employers
Employers considering a low-wage LMIA should:
- Identify the exact physical work location for every requested position.
- Calculate the workforce separately for each location.
- Include full-time staff, part-time staff, workers on leave, approved workers who have not started and requested vacant positions.
- Confirm whether the location is subject to the 10% or 20% cap.
- Verify the correct NAICS and NOC classifications.
- Check whether the location is affected by the 6% unemployment refusal-to-process measure.
- Complete the cap section of the current LMIA application form.
- Retain payroll and workforce records supporting the calculation.
- Complete all recruitment and advertising requirements.
- Verify wages, housing, transportation, insurance and employment-agreement obligations.
- Avoid charging or recovering prohibited costs from the worker.
- Review the current government instructions immediately before submission.
Employers or workers seeking assistance may book a consultation with Always Canada Group.
Key takeaway
Canada’s updated low-wage LMIA rules provide a specific cap calculation for worksites with fewer than 10 employees.
At a qualifying location, an employer may employ up to one low-wage temporary foreign worker under the 10% cap or two under the 20% cap.
The variation may help multi-location and other small-worksite employers, but it does not guarantee LMIA approval or remove recruitment, wage, location and worker-protection requirements.
This article provides general information and does not constitute legal advice. Temporary Foreign Worker Program and LMIA requirements can change. Employers and workers should verify the current rules with ESDC, Service Canada and IRCC before applying.
