On August 18, 2026, Employment and Social Development Canada (ESDC) changed how the low-wage Temporary Foreign Worker Program (TFWP) cap is calculated for very small work locations. The practical effect is that some employers who run multiple small sites can now access low-wage foreign workers at each qualifying location. The headline version made this sound broader than it is, so this guide walks through the actual rule, the conditions, and what it does not mean.
The low-wage cap, briefly
There is a 10% cap on the proportion of temporary foreign workers an employer can hire in low-wage positions at a specific work location. The purpose is to keep Canadians and permanent residents first in line for available jobs.
A higher 20% cap applies to specific sectors, identified by their North American Industry Classification System (NAICS) code:
- NAICS 23: construction
- NAICS 311: food manufacturing
- NAICS 622: hospitals
- NAICS 623: nursing and residential care facilities
- specific in-home caregiver positions under NOC 31301, 32101, 44100 and 44101
What actually changed on August 18, 2026
The change affects the special calculation for employers with fewer than 10 employees at a given work location. For such a location, the cap formula uses a workforce size of 10 employees as its base. As a result, that location may employ a maximum of:
- 1 temporary foreign worker in a low-wage position if it is subject to the 10% cap, or
- 2 temporary foreign workers in low-wage positions if it is subject to the 20% cap (the sectors listed above)
The shift, as reported by CIC News, is that this small-employer calculation is now applied per work location rather than to the company's total workforce nationwide. Previously, a business with several small sites could be shut out of the calculation if its combined staff across all locations reached 10 or more. Now each qualifying location with fewer than 10 employees is assessed on its own. You can read the current rule on the official ESDC low-wage requirements page (updated August 18, 2026).
How the workforce at a location is counted
For this calculation, the total workforce size at a given work location includes all full-time and part-time employees at that location: Canadians, permanent residents, temporary foreign workers hired through the LMIA process, workers on other types of work permits, and employees on leave who are expected to return. It also includes vacant positions requested on the LMIA application and temporary foreign workers on previously approved LMIAs who have not yet started. A full-time employee works 30 or more hours per week on average. A part-time employee (under 30 hours per week on average) counts as 0.5 of an employee.
What this change is not
It is important not to overstate this. The August 18 change does not mean every business with multiple locations can now hire more foreign workers. The limits are specific:
- It applies only to work locations with fewer than 10 employees.
- The maximum is 1 low-wage worker (10% cap) or 2 (20% cap sectors), per qualifying location.
- The base 10% and 20% caps remain in force everywhere else.
- The separate rule that refuses to process certain low-wage LMIA applications in census metropolitan areas with an unemployment rate of 6% or higher (in place since September 26, 2024) still applies.
- Every other TFWP requirement still applies, including minimum recruitment, prevailing wage, and business legitimacy.
What this means for employers
If you operate multiple small sites, for example a restaurant group, a care operator, or a construction firm with small crews, a location with fewer than 10 employees may now qualify for 1 or 2 low-wage temporary foreign workers on its own. The practical work is in the counting. Because the workforce total at each location includes part-time staff at 0.5, pending LMIA positions, and approved workers who have not started, you will need to document the head count at each location carefully before relying on the calculation.
Common misunderstandings
- "Every multi-location business can now hire more foreign workers." No. Only locations with fewer than 10 employees, capped at 1 or 2, and the 10% or 20% cap still applies.
- "The low-wage cap was removed." No. The 10% and 20% caps remain in force.
- "The 20% cap applies to any in-demand business." No. The 20% cap applies to the specific NAICS sectors and caregiver NOC codes listed above.
FAQ
Do the new low-wage rules apply to my business? Only to work locations with fewer than 10 employees, allowing a maximum of 1 low-wage worker (10% cap) or 2 (20% cap sectors). The base caps and all other TFWP requirements still apply.
How is the workforce at a location counted? It includes all full-time and part-time employees at that location, plus vacant LMIA positions and approved temporary foreign workers who have not started. Part-time employees (under 30 hours per week on average) count as 0.5 each.
Which sectors get the 20% cap? Construction (NAICS 23), food manufacturing (NAICS 311), hospitals (NAICS 622), nursing and residential care facilities (NAICS 623), and specific in-home caregiver positions (NOC 31301, 32101, 44100, 44101).
Final thoughts
This change opens a real but narrow door for small multi-site employers. Whether a given location qualifies comes down to a precise head count and the correct cap, and the cost of getting it wrong is a refused or non-processed LMIA application. If you run multiple small locations and want to know whether any of them qualify, it is worth having the calculation reviewed before you file.
Book a consultation with Up Immigration to review your LMIA options as an employer with a Regulated Canadian Immigration Consultant.
Related: LMIA Concurrent Processing: The 90-Day Rule (2026) and Temporary Foreign Worker Program: A Guide for Employers.
Disclaimer: This article is general information current as of August 2026, not legal or immigration advice. Immigration rules change, and every case turns on its own facts. Confirm details with ESDC or a regulated representative, and have your own situation assessed before acting.
