Yes, an LMIA can run into trouble because the offered wage is too high, not only because it is too low. Since June 2025, ESDC’s internal wage directive tells officers that a job offer “much higher than the prevailing wage” should also be assessed as having a negative effect on the Canadian labour market. That does not mean a generous wage is forbidden. It means a wage far above what the market pays for the job needs a clear, documented business reason, and the officer should give you a chance to explain it before refusing.
This article is based on ESDC’s Directive on Wage Assessment, modified June 23, 2025, released under the Access to Information Act (file A-2025-02072) and presented at the CILA 2026 conference LMIA Lab. We compared it with the earlier January 13, 2025 version and with the current program requirements on canada.ca. It is an internal training document, parts are redacted, and it can change without notice. Treat it as a guide to how officers are told to think, not as a published rule.
Key Takeaways
- The June 2025 version of ESDC’s wage directive added a new instruction: offers much higher than the prevailing wage should be assessed negatively. The January 2025 version did not contain it.
- The directive flags three situations: a wage substantially above an ESDC wage variation, a wage above the top of the range you pay your own staff in the same job, and a wage substantially above the Job Bank median.
- canada.ca says publicly that offering a higher wage is not enough to qualify for the high-wage stream, and that TFW wages should be similar to what Canadians in the same job are paid.
- The directive does not set a numeric cut-off. Officers are told to contact the employer and allow clarification first, as a matter of procedural fairness.
- A defensible premium wage is one you can explain and prove: a higher-skilled role, your existing pay scale, a remote or hard-to-staff location, and the payroll to back it up.
Why would ESDC object to a higher wage?
At first this seems backwards. The Temporary Foreign Worker Program exists to protect Canadian wages, so a higher wage looks like a good thing. The concern is what an unusually high wage can signal.
The directive itself gives only the instruction, not the reasoning. Reading it together with the regulations and the public program pages, three concerns are apparent.
Stream selection. Whether you apply in the high-wage or low-wage stream depends on comparing your offered wage to the provincial or territorial threshold. The low-wage stream carries extra requirements, including caps on the proportion of low-wage TFWs at a work location. canada.ca now states plainly: “Offering a higher wage to temporary foreign workers isn’t sufficient to qualify under the stream for high-wage positions.” A wage set just high enough to cross the threshold, for a job the market pays far less, invites the question of whether the wage is real or a way around low-wage rules.
Genuineness of the job offer. Under section 203(1)(a) of the Immigration and Refugee Protection Regulations (IRPR), the officer must decide whether the job offer is genuine under section 200(5). One of the 200(5) factors is “whether the terms of the offer are terms that the employer is reasonably able to fulfil.” A small business offering a cook double the regional high wage may face questions about whether it can afford to pay that wage for the full term, or whether the wage will actually be paid.
Fairness to the existing workforce. The directive’s guiding principle is that the job offer wage should be “substantially the same as, but not less favourable than” what Canadians and permanent residents are paid in the same region and occupation, with the same skills and experience. A foreign worker paid far above everyone else in the same job breaks that comparison in the other direction.
These are our reading of why the instruction exists. The directive does not spell out the policy reasons.
What the directive actually says
The June 2025 directive states in its guidelines section that job offers below the prevailing wage must be assessed as having a negative labour market effect, and that offers “much higher than the prevailing wage should also be assessed as having a negative effect.” If that factor is assessed negatively, a negative LMIA must be issued.
The procedures then flag the issue at each of the wage sources explained in our article on how ESDC sets the LMIA prevailing wage:
1. Above an ESDC wage variation
For the sectors with their own ESDC-set prevailing wage (such as physicians, ski and snowboard instructors in the West, agricultural streams and the Global Talent Stream), the directive adds a bullet for a wage offer “substantially higher than ESDC’s salary variation.” Part of that bullet appears cut off in the released copy, so the exact instruction is not fully visible.
2. Above your own pay range
If you already employ people in the same job, at the same location, with the same skills and experience, your pay range for them is one of the prevailing wage sources. The directive says that if the offer “is higher than the highest wage in the wage range, the employer may not meet the prevailing wage requirement.” Note the word “may.” The officer is directed to look further, not to refuse automatically.
3. Substantially above the Job Bank median
Where the Job Bank median is the source, the directive says a wage “substantially higher than the Job Bank median wage” may not meet the requirement. It gives an example: a cook position in Toronto offered at $34.50 per hour, where Job Bank showed a median of $17.20 and a high wage of $23.57. The directive describes the offer as exceeding the regional wages paid for a cook in Toronto. Those figures are illustrative and come from an earlier Job Bank year, so do not use them as current benchmarks.
No numeric cut-off
Nothing in the released directive defines “substantially” or “much higher” as a percentage or dollar figure. The cook example is more than double the median and well above the published high wage, but the directive does not say where the line sits. Expect officers to look at the whole file rather than apply a formula.
The officer should contact you first
The directive’s procedure for a wage that does not meet the prevailing wage requirement is the same whether the wage is too low or too high: contact the employer, explain the concern, and give the employer an opportunity to clarify or provide more information. The June 2025 version ties this expressly to “the fundamental principle of procedural fairness.” Only if the clarification does not resolve the concern is a negative decision issued, with reasons recorded in a logical progression.
Federal Court decisions summarized in the CILA 2026 handout on LMIA case law support the same point from the employer’s side. In Marcom Resources Ltd. v. Canada, 2020 FC 182, the Court set aside a negative LMIA where the officer failed to meaningfully engage with the employer’s evidence explaining its wage and staffing needs. In Frankie’s Burgers Lougheed Inc. v. Canada, 2015 FC 27, the Court held that an employer must have a chance to respond to material credibility concerns before they are relied on, and that guidelines are not binding law. In Canadian Reformed Church of Cloverdale v. Canada, 2015 FC 1075, the Court said guidelines may be useful benchmarks but cannot be treated as binding requirements. An internal directive on high wages is a guideline of exactly that kind.
How to support a premium wage
If your offer is well above the Job Bank median or above your own pay range, deal with it in the application rather than waiting for the officer’s call.
- Explain the premium in a cover letter. Say why the wage is what it is. Common legitimate reasons include duties above the standard occupation description, specialized skills or certifications, years of experience required, a remote or high-cost location, shift or travel demands, or difficulty recruiting at lower rates.
- Match the occupation to the duties. A wage that looks inflated against one occupation code may be normal for the occupation that actually fits the job. A poor occupation choice is one of the most common reasons a wage looks out of line.
- Show your existing pay structure. If Canadian staff in comparable senior roles earn similar amounts, provide payroll records. If the foreign worker will earn more than everyone else in the same job, explain the difference in skills or responsibilities.
- Show you can pay it. Financial statements, tax filings, and evidence of revenue tied to the position help answer the “reasonably able to fulfil” question under IRPR 200(5)(c).
- Keep your advertising consistent. The wage you advertise, the wage on the LMIA, and the wage in the employment agreement should match. An LMIA wage far higher than the advertised wage raises obvious questions.
- Do not raise the wage only to change streams. If the role is a low-wage role in the market, applying at an inflated wage to avoid low-wage stream requirements is the scenario canada.ca warns about. Getting it wrong can also create misrepresentation and compliance exposure.
If the officer calls
Respond in writing, promptly, and with evidence. Address the specific concern the officer raises, explain which comparison you believe is correct, and attach the documents that support the wage. If you decide to change the wage, check what that does to your stream, your advertising and your employment agreement before agreeing to anything on the phone.
If the LMIA is refused anyway, our LMIA refusal guide for employers explains reconsideration, a fresh application and Federal Court judicial review. For the full process from advertising to decision, see our LMIA application guide.
The wage you offer is the wage you must pay
A high LMIA wage is also a long-term obligation. canada.ca states that the updated wage can never go below the wage identified in the positive LMIA during the worker’s employment period, even if the prevailing wage decreases. Failing to pay the promised wage is a compliance breach that can lead to penalties and bans. See our overview of employer immigration compliance in Canada.
Frequently Asked Questions
Can an LMIA really be refused because the wage is too high?
Yes, under ESDC’s June 2025 internal wage directive, an offer much higher than the prevailing wage can be assessed as having a negative labour market effect. The officer should first contact you and allow you to explain.
How much above the Job Bank median is too much?
The released directive does not set a percentage or dollar limit. Its example is a Toronto cook offered more than double the Job Bank median and well above the published high wage. A premium you can explain with duties, experience, location and payroll evidence is much easier to defend.
Can I pay more to get into the high-wage stream?
Not as a strategy on its own. canada.ca says a higher wage is not sufficient to qualify for the high-wage stream, and that TFW wages should be similar to what Canadians in the same job and location are paid.
My foreign worker will earn more than my Canadian staff in the same job. Is that a problem?
It can be. The directive flags offers above the top of your existing range for the same job. Explain the difference in skills, experience or responsibilities, and document it.
Is the ESDC directive binding law?
No. It is an internal directive released under the Access to Information Act. The Federal Court has said guidelines cannot be treated as rigid requirements, but officers do follow them, so plan for them.
Ask us about your matter
Tell us where your file stands and we will reply within two business days. Please do not send documents or identification numbers in this first message.
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.