Why LMIA applications get a negative decision, and what that means for the worker

If you are waiting on an employer's Labour Market Impact Assessment from outside Canada, you are exposed to a decision you cannot see, on an application you are not allowed to make, based on evidence you never get to check.

A negative decision usually has nothing to do with you. It is almost always about what the employer did, failed to do, or could not prove. The exception is the case where there was never a real employer at all, and that case is common enough to belong near the top of this page.

Refused, or never assessed at all

Two different things get described as a refusal. The first is a negative decision: Employment and Social Development Canada assessed the application, concluded the employer did not meet the requirements, and issued a negative letter.

The second is a refusal to process. Since 26 September 2024, ESDC does not process an application where the wage offered is below the provincial or territorial wage threshold and the work location is in a census metropolitan area with an unemployment rate of 6% or higher at the time of submission. Nobody looks at whether the job is genuine. The file stops at the door. Primary agriculture, construction, food manufacturing, hospitals, nursing and residential care, listed in-home caregiver occupations, applications supporting permanent residence only and certain short-duration positions of generally up to 120 days remain eligible.

Recruitment that was not genuine, or not compliant

This is the largest category of failure. The employer has to show Canadians and permanent residents had a genuine opportunity at the job first, and prove it with records.

• The advertising did not run long enough: a minimum of 4 consecutive weeks within the 3 months before applying for high-wage positions, and 8 consecutive weeks for low-wage positions.
• Not enough recruitment methods. High-wage positions need at least 3 activities including Job Bank with Job Match, one of the others national in scope. Low-wage positions need youth-targeted advertising and at least 2 additional methods aimed at underrepresented groups.
• The advertisement was missing required content, such as the wage, the business address, the duties, the language of work or the work location.
• Matched job seekers were ignored. In the low-wage stream the employer must invite every job seeker matched in the first 30 days, rated two stars or more, to apply.
• Canadian applicants were rejected for reasons that do not hold up: requirements that never appeared in the advertisement, or preferences dressed up as qualifications.
• Recruitment fees were charged to the worker. ESDC requires employers to confirm that nobody recruiting on their behalf charges or recovers recruitment fees, directly or indirectly, from the worker, and states that failure to do so results in a negative decision.

The wage was wrong

The wage is not negotiable between you and the employer. ESDC requires the prevailing wage: the highest of the median wage on Job Bank for the occupation and region, or the wage within the range the employer already pays current employees doing the same work at the same location with the same experience.

Applications fail here in predictable ways. The employer used an outdated Job Bank figure. The employer counted tips, overtime, bonuses or commissions toward the rate, when only guaranteed wages count. The employer advertised one wage and offered another. Or the position is covered by a collective agreement, in which case the rates established under that agreement must be advertised and offered.

A wage below the prevailing wage is not a small error to be fixed by a phone call. It goes to the heart of the test, because underpaying a foreign worker is precisely the labour market effect the program exists to prevent.

The business or the job was not legitimate

ESDC assesses whether the business provides a good or a service in Canada, whether the employment offered is consistent with the reasonable needs of the business, whether the employer can fulfil all the terms of the job offer including the wages, and whether the employer has compliance issues. Documents are required, including a valid business licence and Canada Revenue Agency records.

So a company with no operating history, no filings, no premises and no existing employees will not get an LMIA however convincing the job offer letter looks. Neither will a business that cannot show it can pay the wage it is promising for the duration requested, or whose claimed staffing need does not match its size or activity.

For a worker abroad this is the most useful ground on the page, because it is the one you can partly check yourself. A real employer has a findable address, a registration, a website that predates your conversation, and staff who existed before you appeared.

The labour market effect itself

Even a compliant employer can get a negative decision on the substance. The Immigration and Refugee Protection Regulations set out the factors the assessment must be based on: whether the employment will or is likely to result in direct job creation or job retention for Canadian citizens or permanent residents, whether it will or is likely to result in the development or transfer of skills and knowledge for their benefit, whether it is likely to fill a labour shortage, whether the working conditions meet generally accepted Canadian standards, and whether the employer will hire or train Canadians and permanent residents or has made reasonable efforts to do so.

There is also a labour relations bar. ESDC states that the hiring of temporary foreign workers must not affect current or foreseeable labour disputes at the workplace.

And for high-wage positions the transition plan is mandatory, setting out 3 distinct activities to recruit, retain or train Canadians and permanent residents. A missing or empty transition plan is a straightforward way to fail an otherwise sound application.

The employer's own record

An LMIA is not assessed in isolation from the employer's history. One of the statutory factors is whether the employer has fulfilled, or made reasonable efforts to fulfil, commitments made in an earlier assessment, and business legitimacy includes having no compliance issues.

Employers are subject to inspection for up to 6 years after a temporary foreign worker starts working, on site or virtually, announced or unannounced. Findings of non-compliance run from warnings through financial penalties to suspension or revocation of an LMIA and, for serious violations, a ban from the program. Non-compliant employers are published on IRCC's list, warnings excepted. Check that list before you accept anything. It is the only part of this assessment you can do without the employer's cooperation.

What happens to you when the LMIA fails

Legally, very little. You were never the applicant, so a negative LMIA is not a refusal on your immigration record and it is not something you declare as your own refused application. If you had already applied for a work permit, that application loses its foundation and will be refused, and a work permit refusal is yours and is declarable.

Practically, the cost can be severe, and it is usually the cost of having acted early. People resign jobs, sell property, withdraw children from school and borrow money against a job offer that had not yet been approved. Do none of that until you hold a work permit or a letter of introduction.

The employer's options are limited. ESDC's page on what happens after an application does not describe any appeal of a negative decision. The realistic route is a fresh application that fixes what failed, which usually means running the recruitment again and waiting through a new advertising period. If the problem was the refusal to process rule, the employer needs a different work location or a wage at or above the threshold.

Does a negative LMIA count as a refusal on my immigration record?

No. The employer is the applicant, so the negative decision belongs to them and you do not declare it as a refusal of yours. A work permit application of your own that is refused because the LMIA failed is a different matter and is declarable.

I paid an agent for an LMIA and nothing happened. What can I do?

Accept first that there was never a lawful product on offer. Preserve every message, receipt and transfer record, report the fraud to the appropriate authorities in your country and in Canada, and take advice from a licensed representative before you apply for anything else, because documents you were given may not be genuine.

Can I fix the problem myself if my employer's application was refused?

No. You cannot apply, respond or submit evidence, because it is not your application. What you can do is ask the employer what the letter said, and judge from the answer whether they understand the requirements well enough to try again.

My employer says the job is approved but Service Canada would not process it. What does that mean?

It usually means the refusal to process rule applied: a wage below the provincial or territorial threshold with a work location in a census metropolitan area with an unemployment rate of 6% or higher. The application is not assessed at all, and the list of affected areas is updated every 3 months.

How can I tell whether an employer is real before I get involved?

Look for what ESDC looks for: a registered business providing a good or service in Canada, a findable address, a staffing need matching the size of the operation, and the ability to pay the wage offered. Then check IRCC's list of non-compliant employers. A recruiter who resists these questions has answered them.

If you are being asked for money against a Canadian job offer, or an employer's application has failed and you do not know what it means for you, a licensed RCIC can look at the documents before you go any further. Book a consultation

Keep reading

Study & work

Why work permit applications are refused, and what reapplying well looks like

September 19, 2026 · 9 min read

Study & work

What an LMIA is, whose application it is, and when a job offer needs one

September 19, 2026 · 9 min read

Study & work

LMIA-exempt work permits: how the International Mobility Program actually works

September 19, 2026 · 9 min read