Managing Work Reductions Due to COVID-19 – Employment Insurance Sick Benefits and Work Sharing Program

23. March 2020 0

The Covid19 pandemic is creating significant challenges in the workplace and those challenges will only increase as governments impose stricter and stricter restrictions on the movement of individuals in our society.  This has significant impact on businesses and employees whether it is through ill or quarantined workers, closure of businesses due to government order or requirements to have workers working only from home.  Employers trying to find ways to mitigate the significant impact that Covid-19 is having on business operations and at the same time take care of employees.  The situation is constantly evolving, including the statutory regimes that govern workplaces.

Companies and employees must remember that this situation is temporary.  Life will return to normal although there may be lasting changes in our workplaces due to the experience of Covid19.  When life returns to normal, business will again return to normal levels and with that will be a requirement for the levels of staffing that companies had pre Covid19.  Employers have an interest in maintaining loyalty of their current work force, seeing their business survive from this unprecedented event and supporting their workers.  There are three Federally funded programs that can help, all of which are connected to employment insurance.  All of these programs existed prior to Covid19 but have been revised in response to the pandemic and provide significant support to both employers and employees.  These programs are the Employment Insurance Sickness Benefit, Work Share program and the Supplemental Unemployment Benefit.  The Work Share program and the Supplemental Unemployment Benefit plan provide a means for employers to maintain an employees income at a reduced cost to the employer during periods of either reduced or eliminated work.

Employment Insurance Sickness Benefits

EI sickness benefits provide financial support for workers who are unable to work for a medical reason, which includes due to quarantine or self-isolation.  To be eligible for the benefits the worker must experience a decrease in weekly earnings of more than 40% for one week.  Eligibility requirements also include that the worker must have worked at least 600 insured hours in the year prior to the claim.  For full time workers that means the must have worked approximately 15 weeks of the year prior to the claim being made.

The benefit that is payable under EI sickness benefits is 55% of the employee’s insurable earnings up to a maximum of $573 per month, less applicable taxes.  Employees can receive these benefits for a maximum of 15 weeks.  The Federal government announced waiver of the one week waiting period with the result that employees are now able to begin receiving the benefits as soon as the absence begins.  As of March 11, 2020 the government has also waived the requirement of a medical certificate for individuals required to go into quarantine by either law or by order of a medical health officer.

EI Work sharing program

The EI Work Sharing program 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.  The program provides EI benefits to eligible workers.  To be eligible, employees must agree to reduce their normal work hours and share work over a specified period of time.  Both the employer and the employee must apply to participate in the EI Work Sharing program.

To be eligible as an employer for the EI Work Sharing program the employer must:

  • Have been in business in Canada year round for the last two years;
  • Be a private business, publicly held company or a not-for-profit organization;
  • Demonstrate that the shortage of work is both temporary and beyond their control;
  • Demonstrate a recent decrease in business activity of at least 10%; and
  • Submit and implement a recovery plan designed to return the Work Sharing employees to normal working hours by the end of the program.

Some employees are not eligible to participate in the Work Sharing program.  These include:

  • Season employees or employees hired for the summer or for a coop term;
  • Employees hired on a casual or on call basis; or
  • Shareholders of the company whose shares provide them with significant decision- making power as to the direction of the company.

In implementing a Work Sharing program, the employees hours may be reduced by anywhere from 10% to 50%.  EI benefits will be paid for the reduced work hours.  The reduction in work hours can vary from week to week, as long as the average is maintained throughout the reduction period.  The length of the program can be anywhere from 6 weeks to 76 weeks if related to Covid19.  Changes were made to the program in response to the Covid19 pandemic.  Prior to the pandemic the maximum length of the program was 38 weeks.

Learn more about these new development and other helpful information in Managing Workplace Reductions Due to COVID-19, authored by Rose Keith, QC.

Read the paper here.