In response to the outbreak of COVID-19, the Federal Government of Canada has announced several measures to assist eligible employers and employees. In particular, the Government has announced changes to the Employment Insurance Sickness Benefits and the federal Work-Sharing program. Here are the key things employers need to know right now.
Employment Insurance (EI) Sickness Benefits
What does EI Sickness Benefits provide?
- Financial support for eligible workers who:
- are unable to work for a medical reason (which now includes being subject to quarantine or self-isolation);
- have experienced a decrease in regular weekly earnings of more than 40% for one week; and
- have accumulated 600 insured hours of work in the 52 weeks before the start of the claim.
How much can an employee claim and for how long?
- EI Sickness Benefits pay 55% of an employee’s insurable earnings, up to a maximum of $573 per week, less applicable taxes.
- Employees can claim these benefits for a maximum of 15 weeks.
What is a waiting period and how has it changed?
- A waiting period is a period of time in which an employee does not receive EI Sickness Benefits.
- Normally, there is a one (1) week waiting period for EI Sickness Benefits, in which an employee would not receive payment. For example, if an employee were under quarantine or self-isolated for two (2) weeks, they would only receive one (1) week of EI Sickness Benefits.
- The Government has now waived the one (1) week waiting period. This means employees will now be able to access benefits for their period of absence, up to a maximum of 15 weeks.
Is a doctor’s note required to access EI Sickness Benefits?
- Normally, a medical certificate (signed by a qualified medical professional) is required to access the benefits.
- As of March 11, 2020, the Government has stated that they are waiving the medical note for individuals required to go into quarantine by law or by a public-health official.
- Should the quarantine period or self-isolation period be extended, a signed medical certificate may still be necessary.
Can Employer’s top up an employee’s EI Sickness Benefits?
- Yes, a Supplementary Unemployment Benefit Plan (SUBP) can be established by an employer to top up employees' EI benefits during a period of unemployment due to a temporary layoff for, among other things, sickness.
- A SUBP should be registered with Service Canada and must meet the requirements set out below, otherwise it will be treated as income and any EI benefits received may be reduced.
- Article 37(2) of the EI Regulations require that a SUBP:
- identify the group or groups of employees covered by the plan;
- cover any period of unemployment by reason of a temporary stoppage of work, training, illness, injury, quarantine or any combination of such reasons;
- require employees to apply for and be in receipt of benefits in order to receive payments under the plan but may provide for payments to an employee who is not in receipt of benefits for the reason that the employee:
(i) is serving the waiting period,
(ii) has insufficient hours of insurable employment to qualify for benefits, or
(iii) has received all of the benefits to which the employee is entitled;
- require that the combined weekly payments received from the plan and the portion of the weekly benefit rate from that employment do not exceed 95 per cent of the employee's normal weekly earnings from that employment;
- require that payments under the plan be financed by the employer and that the employer keep separate accounts for those payments;
- require that, on termination of the plan, all remaining assets revert to the employer or be used for payments under the plan or for administrative costs of the plan;
- require that the plan be submitted to the Commission prior to its effective date and that written notice of any change to the plan be given to the Commission within 30 days after the effective date of the change;
- provide that the employees have no vested right to payments under the plan, except to payments during a period of unemployment specified in the plan; and
- provide that payments in respect of guaranteed annual remuneration or in respect of deferred remuneration or severance pay benefits are not reduced or increased by payments received under the plan
- The registration date of the SUBP is the date on which it is submitted to Service Canada’s SUB Program, if all the required conditions are met and all supporting documents are received. The plan will be registered under the employer's business number for payroll deductions and a notification of the approval will be sent to the employer. Until a plan is registered, any amounts paid will be treated as earnings and may be deducted from the employee's EI benefits.
Federal Work-Sharing Program
What is work-sharing?
- Work-sharing is a program designed to help eligible employers avoid layoffs when there is a temporary reduction in the normal level of business activity (that is beyond the control of the employer). The program is available to both federally and provincially regulated employers.
- As a result, Employment Insurance Benefits are provided for eligible employees as income support.
- Affected employees must agree to work a reduced schedule and share available work over a specified period of time.
- Both the employer and the employee must apply to participate in a Work-Sharing program together.
The mandatory waiting period has also been waived so that employers with a recently expired agreement may immediately apply for a new agreement, without waiting between applications.
How do I know if I am an eligible employer?
To be eligible for a Work-Sharing program, employers must:
- have been in business in Canada year-round for at least two (2) years;
- be a private business, publicly-held company or a not-for-profit organization;
- demonstrate that the shortage of work is temporary and beyond their control;
- demonstrate a recent decrease in business activity of approximately 10%; and
- submit and implement a recovery plan designed to return the Work-Sharing individuals to normal working hours by the end of the program.
Employers may not make a Work-Sharing agreement with employees who are:
- seasonal, or students hired for the summer or co-op term;
- hired on a casual or on-call basis; or
- shareholders of the business, whose shares provide them with significant decision making power as to the direction of the company.
How many hours of an employee’s work schedule can be reduced and how long can it last?
- A reduction between a minimum of 10% (one half day) and a maximum of 50% (three days).
- In any given week, the work reduction can vary depending on available work, as long as the work reduction on average is between 10%-60% for the duration of the program.
- The program must have a minimum duration of six (6) weeks and as a result of COVID-19, may last up to 76 weeks (normally maximum 38 weeks).
We recognize that change resulting from COVID-19 is happening in real-time. When making decisions to protect your people and your business, we strongly recommend that you seek advice of counsel.