An LMIA job offer must pay at least the prevailing wage for the occupation, but “prevailing wage” does not always mean the Job Bank median. ESDC’s internal wage directive tells officers to check four sources in a fixed order: a collective agreement first, then an ESDC wage variation for certain sectors, then the employer’s own pay range for the same job, and only then the Job Bank median. Which source applies to your position decides the number your offer has to meet, and an offer below that number leads to a negative LMIA.
This article explains that order, drawing on ESDC’s Directive on Wage Assessment (versions dated January 13, 2025 and June 23, 2025), released under the Access to Information Act (file A-2025-02072) and presented at the CILA 2026 conference LMIA Lab. We checked it against the current program requirements on canada.ca. Internal directives can change without notice, and parts of the released copy are redacted, so treat this as a guide to how officers are trained to think, not as a published rule.
Key Takeaways
- The legal test is in section 203(1.1)(a) of the Immigration and Refugee Protection Regulations: if the offered wage is not consistent with the prevailing wage rate for the occupation, the job is presumed unlikely to have a neutral or positive labour market effect.
- ESDC’s directive ranks four wage sources: (1) collective agreement, (2) ESDC wage variation, (3) the higher of the Job Bank median or your existing pay range for the same job, (4) the Job Bank median alone.
- A union rate governs even when Job Bank shows a higher number.
- If you already employ people in the same job, at the same location, with the same skills and experience, your own pay range can push the prevailing wage above the Job Bank median.
- Only guaranteed wages count. Benefits, overtime, tips, bonuses and commissions are generally excluded from the wage comparison.
What does “prevailing wage” mean for an LMIA?
Under the Temporary Foreign Worker Program, the employer must pay, as a minimum, the prevailing wage for the occupation. The directive’s starting principle is that the offered wage should be substantially the same as, but not less favourable than, the wage paid to Canadians and permanent residents in the same economic region, for the same occupation, with the same skills and years of experience.
The regulatory hook is section 203 of the Immigration and Refugee Protection Regulations (IRPR). Section 203(1)(b) requires an assessment of whether the job is likely to have a neutral or positive effect on the labour market. Section 203(1.1)(a) then says that effect is unlikely if “the wages set out in the offer of employment are not consistent with the prevailing wage rate for the occupation.” The directive instructs that an offer below the prevailing wage must be assessed as having a negative effect, which means a negative LMIA.
The prevailing wage is a separate question from the high-wage and low-wage stream split. The stream depends on comparing your offered wage to a provincial or territorial threshold (the provincial median plus 20%, as canada.ca currently explains). The prevailing wage is the minimum your specific job must pay. You have to satisfy both.
The four sources, in the order ESDC applies them
The directive includes a short decision chart (Annex C) that officers follow from top to bottom. The first source that fits your position is the one used.
1. Is the position unionized? Use the collective agreement
If the job is part of a bargaining unit, the collective agreement sets the prevailing wage and “supersedes all other prevailing wage information.” The January 2025 version of the directive states this plainly for the case many employers find surprising: if the Job Bank median is higher than the union rate, the employer pays the union rate, because that rate was negotiated by the bargaining unit.
You will be asked to provide the current wage schedule from the collective agreement. canada.ca also states that unionized positions must receive the same wage rates and forms of compensation as the collective agreement provides.
2. Is there an ESDC wage variation for this job? Use the variation
For a short list of sectors and places, ESDC has set its own prevailing wage. The directive lists these variations:
- Cold Lake, Alberta (assessed against the Alberta provincial wage rather than the Wood Buffalo-Cold Lake regional figure, which Fort McMurray wages pull upward)
- Maritime sector, coasting trade on foreign-flagged vessels
- Physicians (the higher of the provincial fee-for-service or salary scale, or what the employer pays Canadian physicians at the same location)
- International medical graduates in Quebec completing an unpaid assessment period
- Ski and snowboard instructors in British Columbia and Alberta (based on an industry wage survey)
- The Seasonal Agricultural Worker Program and Agricultural Stream (the highest of the commodity wage, the provincial minimum wage, or what the employer pays Canadians doing the same work)
- The Global Talent Stream, which has its own wage floors
Where a variation applies, it overrides the remaining sources. The wage floors for the Global Talent Stream and the agricultural commodity wages change over time, so confirm the current figures on canada.ca before setting an offer.
3. Do you already employ people in the same job? Use the higher of your range or the Job Bank median
This is the step employers most often overlook. If you currently employ others in the same occupation, at the same work location, with the same skills and years of experience, the prevailing wage is the higher of:
- the Job Bank median hourly wage for the occupation in that economic region, or
- a wage within the range you already pay those employees.
canada.ca states the same rule: the prevailing wage is the highest of the Job Bank median or a wage within the range you pay current employees hired for the same job and location. In practice, if your existing staff in the role earn more than the Job Bank median, an offer at the median will not pass. If your offer falls below the bottom of your own range, the June 2025 directive tells officers the requirement is not met.
The LMIA form asks for this pay structure information. Answer it accurately. Officers compare the wage you report for the foreign worker against what you report for your current staff, and an inconsistency invites a closer look at the whole file.
4. No comparable employees? Use the Job Bank median
If none of the above applies, the prevailing wage is the Job Bank median hourly wage for the occupation in the economic region where the work will take place. If Job Bank shows no median for that region, the officer moves to the provincial or territorial median, and then to the national median.
Two practical points from the directive:
- Several work locations. If the worker will work for you in more than one economic region, the prevailing wage is the highest median among all of those regions.
- Choosing the occupation. The Job Bank median depends on the occupation you select. The directive notes that some Job Bank wage data is still built on the older NOC 2016 structure and suggests officers use the job title that best matches the duties described in the offer. A poor occupation choice can produce the wrong benchmark, so match the duties carefully. canada.ca also says that where the position requires more skills or experience than the standard occupation description, the wage offered should reflect that.
How the wage itself is measured
Hourly, unless the source uses an annual salary
The offer should state an hourly wage. An annual salary is acceptable only where the prevailing wage source itself uses an annual figure. If you pay a salary, convert it to an hourly rate.
Only guaranteed pay counts
canada.ca states that only guaranteed wages are considered, excluding overtime, tips, benefits, profit sharing, bonuses, commissions and other forms of compensation. The directive adds that the monetary value of benefits, such as housing or living allowances, stock options, pension, extended health coverage or a company vehicle, is not included in the hourly figure.
The directive does allow a narrow exception. Where contingent pay such as piecework, mileage or commission is the industry standard, an officer can ask for a wage range based on the average hourly pay of your existing workforce in the same position. The bottom of that range must still meet the prevailing wage, and the burden is on the employer to show the industry practice. Contingent pay must also be described in your job advertisement.
Foreign currency
If any part of the pay is in a foreign currency, it must be converted to Canadian dollars per hour on the application.
Quebec
For LMIAs with a Quebec work location lasting more than 30 days, the wage assessment is done by Quebec’s Ministère de l’Immigration, de la Francisation et de l’Intégration (MIFI) using its own wage tables. Quebec employers should start there rather than with Job Bank.
What happens if your offer falls short?
The directive tells officers to contact the employer, explain the prevailing wage requirement, and give the employer an opportunity to clarify or provide more information. The June 2025 version ties this expressly to procedural fairness. If the clarification does not resolve the gap, the officer issues a negative LMIA and is told to record the reasons in a logical progression.
That call from the officer matters. If you receive one, respond in writing, explain which wage source you believe applies and why, and attach the evidence (the collective agreement schedule, payroll for comparable staff, or the Job Bank page you relied on). If you raise the wage, check whether the change affects your advertising, since the advertised wage must also meet the prevailing wage.
The June 2025 directive also added a new instruction about wage offers that are much higher than the market, and separate procedures apply when Job Bank updates its wages while your application is pending. We will cover both in separate articles. For the full sequence of steps, see our guide to the LMIA process from application to approval. If you have already been refused, our LMIA refusal guide for employers explains the options.
The wage obligation does not end at approval
Since January 1, 2024, employers must also update temporary foreign workers’ wages to reflect increases in the prevailing wage. canada.ca explains that the prevailing wage must be reapplied when the worker starts and reviewed each year using updated Job Bank wages, and that the wage can never drop below the figure in the positive LMIA. Failing to update wages can lead to penalties and bans under the compliance regime. See our overview of employer immigration compliance in Canada.
A practical checklist before you set the wage
- Confirm whether the role is covered by a collective agreement.
- Check canada.ca for a wage variation that covers your sector or location.
- List everyone you currently employ in the same job at the same location, with their skills, experience and pay.
- Look up the Job Bank median for the correct occupation in every economic region where the person will work.
- Take the highest applicable figure, state it as a guaranteed hourly rate, and use the same figure in your advertising.
- Keep the records. The directive notes the six-year document retention obligation, which starts on the worker’s first day of work.
Frequently Asked Questions
Is the Job Bank median always the prevailing wage for an LMIA?
No. The Job Bank median is the fallback. A collective agreement, an ESDC wage variation, or the wage range you already pay staff in the same job can set a different, often higher, prevailing wage.
If my union rate is lower than the Job Bank median, which do I pay?
ESDC’s directive says the collective agreement rate governs for unionized positions and supersedes Job Bank. Provide the current wage schedule with the application.
Can I count bonuses, commissions or housing toward the prevailing wage?
Generally not. Only guaranteed wages count, and the value of benefits is excluded. In industries where contingent pay is standard, an officer may assess a wage range instead, but the bottom of that range still has to meet the prevailing wage.
My worker will work in two regions. Which median applies?
The highest median among all the economic regions where the worker will work for you.
What if ESDC says my wage is too low?
The officer should contact you first and give you a chance to clarify. Respond in writing with the wage source you rely on and supporting evidence. If the gap is not resolved, the LMIA will be refused.
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Disclaimer: This article is for general information only and is not legal advice. Immigration law and IRCC/ESDC policy change frequently, and every case turns on its own facts. Reading this article does not create a lawyer–client relationship. Obtain advice tailored to your situation before you act.
Talk to a Canadian immigration lawyer. BridgePoint Law advises individuals and businesses across Canada — and on Canada–US–China cross-border matters — on LMIA applications and hiring foreign workers. Book a consultation with our team in Toronto and Kingston. We work in English, Mandarin, and Cantonese.