In Canada, there is a significant public backlash against companies that hire temporary foreign workers (TFWs), partly because the mistreatment of TFWs across the country is well documented, and partly because of persistent anti-immigrant sentiment. Accusations that these workers are depressing wages and stealing jobs persist. Why, then, do companies hire TFWs? And why do these companies mistreat these workers, if they rely on them so much? To better understand these issues, I conducted over 100 interviews with workers, employers and others who are associated with the programme in Canada.
Why do companies hire TFWs? Although there is a public perception that companies hire TFWs to reduce payroll costs, the evidence from my interviews with managers who are using the Canadian TFW programme suggests that wage costs are not the only consideration. These companies are considering several factors. The TFW programme is expensive and time consuming to use, and recent changes in regulation mean that employers must pay TFWs at least the average median wage usually paid to Canadians in that specific occupation and in the specific province and region. However, many managers believe that using the TFW programme can still provide the employer with overall cost savings, based on the assumption that TFWs are more productive. This assessment is not surprising: in many instances where TFWs fill jobs with lower skill requirements, TFWs are overqualified for the work they are doing. Most managers also report that TFWs offer a lower turnover than Canadian workers. TFWs have what is known as a ‘closed’ work permit; they can only work for the company that has brought them to Canada. Essentially, companies that hire TFWs hire an overqualified worker who cannot easily quit. These workers are an attractive proposition for the employer.
Unfortunately, some employers fail to treat TFWs fairly. There have been many reports of workers who are forced to perform additional tasks without compensation or who do not receive appropriate holiday or overtime pay. These workers also frequently report unsafe working or living conditions, with threats of termination or deportation. I spoke to several employers who had been ‘blacklisted’ or found to be non-compliant with the TFW guidelines after being audited by the government. Companies that are non-compliant may pay a monetary penalty, and they may also be banned from hiring TFWs in the future; this, of course, will vary with the currently envisaged law relaxation. At the time of my research, approximately 945 companies had been found to be non-compliant, and the largest fine levied so far to any company in Canada is $365,750. Moreover, from speaking to a government employee and reviewing some internal government documents regarding how non-compliant organisations are investigated, I realised that the emphasis tends to be on closing files quickly rather than on identifying cases of fraud or worker mistreatment. In other words, the ‘blacklisted’ companies are a small tip of the iceberg.
But why, then, do companies keep abusing temporary foreign workers? This question is complicated. Most – but not all – of the managers who spoke with me were, in fact, completely compliant with the TFW programme. The evidence from my interviews suggests that compliance is time consuming yet still achievable. However, some managers had a highly short-term orientation, were disdainful of the government’s authority over the TFW programme and felt that circumstances beyond their control were to blame for their staffing problems. These managers minimised the hardships faced by TFWs in Canada and were more likely to be non-compliant with the TFW guidelines. Managers who planned ahead, took responsibility for their organisation’s staffing challenges, and acknowledged the hardships faced by TFWs in Canada, were much less likely to be non-compliant. Problematic managers tended to rationalise their non-compliance. Each factor was insufficient, by itself, to guarantee that a manager would be non-compliant, but a picture emerges of two general types of managers: reluctant users of the programme, who were resigned to following all its rules no matter how inconvenient, and reckless users, who saw their use of a TFW programme as their right as business owners who needed to solve their staffing problems. The reluctant users of the programme fully recognised the need for close oversight of how they managed their TFWs. Many would have preferred to hire Canadians, and most had made ongoing efforts to do so, but they had also realistically assessed the feasibility of relying exclusively on Canadians. These managers often tried to support the efforts of their employees who were TFWs to become permanent residents. They considered the expense and time that they spent on the TFW programme bureaucracy to be normal costs of doing business in their region or industry. There was also a sense that non-compliant competitors were receiving an unfair advantage; the reluctant users felt that better enforcement of the guidelines would result in a level playing field where the rules would apply equally to everyone.
In contrast, the reckless users of the programme tended to feel that public scrutiny of the TFW programme was overblown and that the programme had been unnecessarily curtailed in recent years. They believed that it was impossible to hire qualified Canadians, and they felt that TFWs were much easier to manage. These managers asserted that the bureaucracy of the TFW programme was so complicated that no one could comply with it.
So, how can workers be protected? The reason TFWs are so vulnerable to mistreatment is that it is very difficult for them to quit their jobs and find new ones. The introduction of ‘open’ work permits so the TFWs can work for a set period for any employer anywhere in Canada would enable workers to proactively quit a job at the first sign of mistreatment, rather than waiting for a situation to become egregiously unsafe. Moreover, the possibility that a TFW could quit their job (just like a Canadian) would put pressure on employers to maintain their pay and working conditions.
Catherine Connelly is a Professor and Business Research Chair in Organisational Behaviour, in the Human Resources and Management department of the DeGroote School of Business at McMaster University, Canada. Her research focuses on the attitudes, behaviours and experiences of workers with non-traditional employment contracts (e.g. temporary agency workers, independent contractors, temporary foreign workers, part-time workers, gig workers), middle managers, workers with disabilities and workers who engage in or experience knowledge-hiding in their organisations. A more comprehensive account of the findings presented here can be found in her recent book, Enduring Work: Experiences with Canada’s Temporary Foreign Worker Program, published in 2023 by Mc Gill-Queen’s University Press.
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