An LMIA is a labor market verification process whereby Employment and Social Development Canada (ESDC) assesses an offer of employment to ensure that the employment of a foreign worker will not have a negative impact on the Canadian labor market. Employers will be required to provide a variety of information about the position for which they want to hire a foreign worker, including the number of Canadians who applied for the position, the number of Canadians who were interviewed, and detailed explanations for why the Canadian workers considered were not hired.

Typically, foreign workers and employers must go through a two-step process in order to receive a Canadian work permit. First, the applicant must submit an application to ESDC for a Labor Market Impact Assessment, followed by a second application to Citizenship and Immigration Canada (CIC) for the actual work permit. The LMIA is issued by ESDC who, after considering numerous protective labour market factors, authorizes the Canadian employer to hire a foreign worker.

In June 2014, it was announced that work permits for foreign workers who require a LMIA will only be granted for a period of 1 year for all low-wage occupations.