The ESDC penalty points system is the formula in Schedule 2 of the Immigration and Refugee Protection Regulations (IRPR) that turns each unjustified Temporary Foreign Worker (TFW) Program violation into a number of points, and those points into a warning, an administrative monetary penalty (AMP), a ban, or a combination. Each violation is scored separately: points for your compliance history plus points for severity, minus a possible deduction for voluntary disclosure. The total, read against the violation’s type (A, B or C) and your business size, gives the fine and any period of ineligibility.
This article is based on ESDC internal policy released under ATIP (Policy: Determination of Consequences, July 10, 2024, presented at the CILA 2026 LMIA Lab), checked against IRPR ss. 209.93 to 209.997 and Schedule 2 as current to September 30, 2026, and canada.ca. Where they differ, we follow the regulation and canada.ca. For obligations generally, see our hub on employer immigration compliance in Canada; the inspection itself is covered in our ESDC inspection process guide.
Key Takeaways
- Points are calculated per violation, not per inspection. Underpaying five workers is five violations (IRPR s. 209.96(1)).
- Each violation’s total is compliance-history points (IRPR Schedule 2, Table 4) plus severity points (Table 5), less four points for an acceptable voluntary disclosure (s. 209.991).
- A total of 0 or 1 point means a warning only. From 2 points an AMP applies, and from 6 points a ban can apply, depending on the violation type (Tables 2 and 3).
- AMPs are cumulative to a cap of $1 million over 12 months. Bans are not added together; the longest one applies (ss. 209.992 and 209.996(5)).
- Every violation except one ending in a warning is published on IRCC’s “Employers who have been found non-compliant” list (s. 209.997).
How does the ESDC penalty points system work?
ESDC counts the violations, classifies each as Type A, B or C, adds history and severity points, and reads the total against Schedule 2: Table 2 for the AMP (by points, type and business size) and Table 3 for any ban (by points and type). The stated purpose is to encourage compliance, “not to punish” (s. 209.94).
A violation exists only where you failed a condition listed in Table 1 of Schedule 2 and the failure was not justified under s. 209.3(3) to (5) or s. 209.4(2) (s. 209.95).
How are violations counted?
Each foreign national negatively affected is a separate violation (s. 209.96(1)). Some conditions also split into separate elements: occupation, wages and working conditions under the job offer condition (s. 209.96(2)); the two live-in caregiver elements (s. 209.96(3)); and each form of abuse listed in s. 196.2(1)(a) to (e) (s. 209.96(4)).
ESDC’s policy adds that a violation that harmed nobody, such as overpaying five workers, counts once, and that several inaccuracies in one LMIA count as one violation.
What are Type A, Type B and Type C violations?
Table 1 of Schedule 2 lists 30 employer conditions and classifies each one (s. 209.97). Type C violations score more history points and reach bans at a lower total. Examples:
- Type A: proving the information in your LMIA was accurate for six years; keeping compliance documents for six years.
- Type B: complying with federal and provincial employment and recruitment laws; providing the occupation, wages and working conditions in the job offer.
- Type C: cooperating with an inspection (s. 209.4(1)); being actively engaged in the business; reasonable efforts to provide an abuse-free workplace; not charging recruitment fees to the worker.
How does compliance history add points?
Table 4 gives 1 point for a first Type A or Type B violation and 2 points for a first Type C violation. A second Type A violation, or any later one, scores 2. Type B scores 2 for a second violation and 3 for a third or later. Type C scores 3 for a second and 4 for a third or later.
ESDC’s policy says a “previous violation” must have been found in an earlier inspection and listed in an earlier notice of final determination. Several violations of the same kind in one past inspection count as one previous violation, and previous violations never expire. A warning still counts toward history (s. 209.95(1)(a)).
Policy change to note: a worked example in the ATIP policy scores a first Type C violation at 1 point. Table 4 in the current regulation says 2. Use the regulation.
Which severity criteria add points?
Not every Table 5 criterion applies to every violation:
| Severity criterion (Table 5) | Points |
|---|---|
| Employer derived a competitive or economic benefit | 0 to 6 |
| Violation involved abuse of a foreign national | 0 to 10 |
| Negative effect on the Canadian labour market or economy | 0 to 6 |
| No reasonable efforts to minimize or remediate the effects | 0 to 3 |
| No reasonable efforts to prevent recurrence | 0 to 3 |
| Risk to the foreign national’s health or safety from a communicable disease | 0 to 10 |
| Risk to public health or safety from a communicable disease | 0 to 10 |
The ATIP policy describes only the first five; the current Table 5 adds the two communicable-disease criteria. Under ESDC’s policy, ordinary underpayment is not “financial abuse” unless there is fraud, extortion or intimidation. The last two criteria are where you have the most control: the onus is on you to show remediation and prevention, with a clear link between your actions and the violation, during the inspection or in your response to the notice of preliminary finding.
Does voluntary disclosure reduce the points?
Yes. If you made an acceptable voluntary disclosure and the total is four or more, four points are subtracted. If the total is under four, it becomes zero (s. 209.991(1)(d)). The disclosure must be complete and made before any inspection powers are being exercised against you (s. 209.991(2)). ESDC can still refuse it after looking at severity, timeliness, how often you have disclosed before, and the condition involved (s. 209.991(3)).
How do points become a fine or a ban?
Table 2 AMPs depend on points, type and whether you are an individual or small business or a large business, and run from $500 (Type A, small business, 2 points) to $100,000 for any type at 15 points or more (confirm the current figures in Schedule 2).
| Total points | Ban, Type A | Ban, Type B | Ban, Type C |
|---|---|---|---|
| 0 to 5 | none | none | none |
| 6 | none | none | 1 year |
| 7 | none | 1 year | 2 years |
| 8 | 1 year | 2 years | 5 years |
| 9 or 10 | 2 years | 5 years | 10 years |
| 11 or 12 | 5 years | 10 years | 10 years |
| 13 or 14 | 10 years | 10 years | 10 years |
| 15 or more | permanent | permanent | permanent |
Source: IRPR Schedule 2, Table 3, current to September 30, 2026; confirm the current figures. A ban starts on the day of the final determination (s. 209.99(2)). It makes you ineligible to employ any foreign national who needs a work permit (s. 209.95(1)(b)), which canada.ca describes as covering both the TFW Program and the International Mobility Program.
Business size. Under s. 209.93, a small business, including its affiliates, has fewer than 100 employees or less than $5 million in annual gross revenues when the LMIA request was received. The ATIP policy says “equal to or fewer than”; the regulation’s wording governs.
Multiple violations. AMPs are added together to a $1 million cap (s. 209.992(1)), and a new AMP is reduced so that final-determination AMPs over the previous 12 months do not exceed $1 million (s. 209.996(5)). The ATIP policy counts the 12 months forward from the first notice; the regulation counts back from the determination date. If several bans apply, only the longest applies (s. 209.992(2)).
A worked example (illustrative only)
A small business with no history underpaid three workers: three Type B violations. Suppose each scores 1 history point plus 5 severity points, for 6. Table 2 sets $12,000 each for a small business, so $36,000, and Table 3 sets no Type B ban at 6 points. If the employer’s recruiter also charged one worker a recruitment fee (Type C), a first Type C violation starts at 2 points; with 4 severity points the total is 6, meaning $20,000 and a one-year ban. The severity scores are our assumptions; the amounts are from Schedule 2 as current to September 30, 2026, so confirm the current figures.
Will my business be named publicly?
Yes, unless the outcome was a warning. Section 209.997 requires the employer’s name, address, the conditions breached, the date of the determination, eligibility status and any AMP and ban to be posted on a Government of Canada website. In practice this is IRCC’s “Employers who have been found non-compliant” page, which shows each employer as eligible or ineligible until a stated date. ESDC’s policy says the listing is permanent and will not be removed.
What can you still change?
The notice of preliminary finding sets out the proposed points, and you generally have 30 days after receipt (deemed 10 days after sending) to make written submissions on the violation or the points, or to ask for an extension (s. 209.994); responding to that notice will be covered in a separate article. Before your next LMIA, our guide to hiring a foreign worker through an LMIA shows which conditions you will be signing up to.
Frequently Asked Questions
What is the maximum TFW Program penalty in Canada?
$100,000 per violation, with a cap of $1 million per employer over 12 months, plus a possible permanent ban for violations totalling 15 points or more. Confirm the current figures in IRPR Schedule 2.
How many points lead to a ban from the TFW Program?
At least 6 points for a Type C violation, 7 for Type B and 8 for Type A. Below 6 points there is no ban for any type.
Does a warning count against my business?
A warning carries no fine and is not published, but the violation counts in your compliance history and raises the points for any later violation.
How long does my name stay on the non-compliant employers list?
The regulation does not set a removal date, and ESDC’s internal policy says the listing is permanent. Your status changes back to eligible once any ban ends and penalties are paid.
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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 employer immigration compliance and LMIA. Book a consultation with our team in Toronto and Kingston. We work in English, Mandarin, and Cantonese.