Employer compliance obligations under Canada’s Temporary Foreign Worker Program (TFWP) and International Mobility Program (IMP) continue for six years — even if the business that hired the foreign worker is no longer operating. Understanding how these obligations apply when a company goes bankrupt is essential for both employers and practitioners advising them.

The Six-Year Record-Keeping Requirement

Under IRCC and ESDC policy, any employer who hires a temporary foreign worker must retain all relevant records for six years from the first day of the worker’s employment. This rule applies to both LMIA-based and LMIA-exempt hires. During this period, the employer may be selected for an Employer Compliance Review (ECR) or inspection.

The Employer of Record Remains Responsible

The obligation to cooperate with inspections and maintain records belongs to the employer of record — the entity that submitted the offer of employment through the Employer Portal or applied for the LMIA. Even if ownership changes or the business closes, the duty to comply attaches to that original employer.

Bankruptcy Does Not Eliminate the Obligation

If the company declares bankruptcy during the six-year period, the responsibility to respond to compliance inquiries does not automatically disappear. The employer entity remains accountable for demonstrating compliance for the period it employed the foreign worker.

Who Responds When the Employer Is Bankrupt or Dissolved

When a company is under bankruptcy protection or receivership, the trustee or receiver managing its affairs may be contacted by IRCC or ESDC to provide employment records and respond to the compliance request. If the company has been dissolved and no records are available, the employer may still be found non-compliant due to an inability to provide required documentation.

Key Takeaways for Practitioners

• Employers must retain all records for six years from the first day of employment.
• The original employer of record remains responsible for compliance, regardless of bankruptcy.
• Trustees or receivers may respond to compliance requests on behalf of the employer.
• Foreign workers are never responsible for responding to an employer compliance review.
• A lack of records may still result in a non-compliance finding, even if the company no longer exists.

Conclusion

Employer compliance obligations follow the employer entity — not the individual worker or any successor business. While IRCC and ESDC guidance do not explicitly assign responsibility to trustees or receivers, in practice, these representatives often handle compliance matters during bankruptcy. Practitioners should advise employers to maintain complete records for the full six-year period, regardless of the company’s financial circumstances.

Information taken from our course on Compliance Reviews: