Employer Compliance Audits Canada: How IRCC and ESDC Enforce Employer Obligations

Employer compliance audits Canada are a core enforcement mechanism used by Immigration, Refugees and Citizenship Canada (IRCC) and Employment and Social Development Canada (ESDC) to ensure employers hiring foreign workers comply with Canadian immigration and employment obligations. In 2026, audits are more frequent, increasingly data-driven, and far less tolerant of documentation gaps or informal HR practices.

Employers that rely on international talent, whether through LMIA-exempt work permits, the Global Talent Stream, or other employer-driven pathways, must understand that compliance obligations do not end when a work permit is approved. Failure to meet ongoing obligations can lead to administrative monetary penalties, public non-compliance listings, and bans from hiring foreign workers.

What Is an Employer Compliance Audit in Canada?

Employer compliance audits Canada involve a formal review of whether an employer has complied with the terms and conditions set out in a work permit application, LMIA, or employer portal submission. The review focuses on whether foreign workers were employed under the same conditions that were offered and approved.

Audits may occur while a foreign worker is employed or years later, and can be conducted with or without prior notice.

What Triggers Employer Compliance Audits Canada

Employer compliance audits are often triggered by inconsistencies or risk indicators flagged through IRCC and ESDC systems. Common triggers include:

• Changes in job duties or work location that are not documented or not aligned with what was approved
• Wage discrepancies between payroll records and the offer provided in the application
• Business restructures, mergers, acquisitions, or ownership changes
• Sector-focused enforcement initiatives or random selection
• Complaints or tips filed by current or former foreign workers
• Inconsistencies between employer portal details, contracts, and actual workplace conditions

IRCC vs ESDC Employer Compliance Audits

Not all audits are the same. Identifying whether IRCC and ESDC is leading the process is key to responding correctly and protecting your business.

IRCC Employer Compliance Audits (International Mobility Program)

IRCC audits commonly apply to LMIA-exempt work permits under the International Mobility Program (IMP). Officers may review whether the employer complied with the terms declared through the employer portal, including:

• Job title, core duties, and position level
• Wages, benefits, and hours of work
• Work location and reporting structure
• Duration of employment and continuity of conditions
• Business legitimacy and ability to comply

ESDC Employer Compliance Audits (LMIA-Based Hiring)

ESDC audits typically relate to employers who obtained Labour Market Impact Assessments (LMIAs). These audits may include review of recruitment, wage compliance, and whether the employment terms offered align with prevailing wage and program requirements.

Read more about the LMIA process in Canada here.

What Happens During an Employer Compliance Audit

Employer compliance audits Canada often follow a structured workflow. While the specifics vary by program and risk profile, the process commonly includes:

1. Notice or Initiation: The employer may receive a written request for documents within a set deadline, or an audit may be initiated without advance warning.
2. Document Review: Officers review payroll records, contracts, job descriptions, corporate records, and proof of business operations.
3. Interviews and Verification: Officers may interview management and/or foreign workers and may confirm work location and duties.
4. Findings and Decision: A determination is issued. If non-compliance is found, penalties may be imposed and the employer may be listed publicly.

Records Employers Must Maintain

In most cases, employers should plan to retain compliance records for at least six years from the date a work permit is issued. Maintaining a centralized compliance file for each foreign worker helps reduce risk if an audit occurs unexpectedly. Records commonly requested include:

• Signed employment contracts (and amendments)
• Payroll records, T4s, pay stubs, and proof of wage payments
• Job descriptions and organizational charts
• Proof of business operations (corporate filings, invoices, leases, insurance)
• Records of promotions, raises, role changes, and work location changes

Common Employer Compliance Risks Employers Overlook

Many employers assume compliance ends once a work permit is issued. In practice, employer compliance audits often find issues that arise from normal business operations, especially when HR changes are made quickly or without immigration review. Common risks include:

• Undocumented role changes: Expanded duties, “acting” roles, or reclassifications that materially change the approved position
• Compensation shifts: Reduced hours, pay freezes, or changes to bonus structures that create a mismatch with the approved offer
• Location changes: Remote work, hybrid arrangements, or office moves that alter the approved work location
• Restructuring gaps: Mergers or reorganizations where contracts and reporting lines change but immigration records are not updated

Penalties for Employer Non-Compliance

Consequences of failing employer compliance audits in Canada can be significant. Penalties depend on the nature, severity, and frequency of the violation, as well as the employer’s compliance history.

A non-compliance finding can also trigger increased scrutiny of future work permit and LMIA applications, including Global Talent Stream pathways and other corporate immigration strategies.

How Employers Can Prepare for Compliance Audits

The best way to reduce audit risk is to treat compliance as an ongoing operational system, not a one-time immigration filing. Practical steps include:

• Conducting an internal compliance review at least annually (or whenever you restructure)
• Ensuring HR, payroll, and immigration records align for each foreign worker
• Documenting and reviewing all changes to wages, duties, and work locations before implementation
• Training HR and managers on what changes can trigger employer compliance audits in Canada
• Seeking legal advice early when changes affect job duties, compensation, or reporting lines

Employer Compliance Audits and Corporate Immigration Strategy

For employers relying on global talent, employer compliance audits Canada should be integrated into long-term workforce planning. A strong compliance framework protects business continuity, supports foreign worker retention, and reduces risk across future applications.

At Zohil-Morton Law, we advise employers on proactive compliance strategies, audit readiness, and risk mitigation across all employer-driven immigration pathways.

Still have questions? Book a consultation with Cristina Zohil-Morton and the team at Zohil-Morton Law.

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This article is for informational purposes only and does not constitute legal advice. Please consult a licensed immigration professional regarding your specific situation.

Frequently Asked Questions

How long can IRCC audit an employer?

IRCC may audit employers for up to six years following the issuance of a work permit.

Can employers prepare for compliance audits?

Yes. Proactive compliance reviews significantly reduce risk during employer compliance audits Canada.

Are audits conducted without notice?

Yes. Employer compliance audits Canada may be conducted with or without advance notice depending on the program and enforcement approach.