Companies suffering from COVID-19-related business disruptions are feeling the pressure for layoffs. But there may be other options available—alternatives that enable you to not only retain key personnel you may never get back but also avoid costly termination payments. One option is to structure employment reduction arrangements as temporary layoffs. Another possibility is to avoid layoffs altogether by taking advantage of the Employment Insurance (EI) Work Sharing Program. The good news is that recent changes in response to the COVID-19 crisis make it easier than ever to use Work Sharing to avoid layoffs.
Work Sharing is an existing EI program designed to help companies avoid layoffs due to temporary business disruptions. Under Work Sharing, employees agree to work a reduced work schedule and share available hours for a specific period. In addition to keeping their jobs, employees are able to get EI benefits during the period the work sharing agreement is in effect. Employers must apply for Work Sharing by submitting, among other things:
The federal government just announced a series of temporary changes to Work Sharing to promote its use to stave off layoffs and maintain jobs through the COVID-19 crisis. Highlights of the key changes, which took effect on March 15, 2020 and will remain in place through March 14, 2021 and which apply to arrangements prompted by COVID-19:
The Canadian government has adopted a flurry of emergency measures in response to the global COVID-19 pandemic. Here’s an overview of the actions affecting HR, businesses and employees.
Effective March 15, the usual one-week waiting period for EI sickness benefits has been waived for work absences caused by COVID-19 quarantine. Result: Employees whose regular weekly earnings decline by more than 40% due to COVID-19 will be able to receive up to 15 weeks’ partial income replacement right away. No medical certificate is required for employees claiming EI sickness benefits due to quarantine.
Starting April 1, employees and self-employed persons who are sick or quarantined with COVID-19 but who don’t qualify for EI sickness benefits can apply to the CRA for an Emergency Care Benefit of up to $900 to be paid out every 2 weeks over a period of up to 15 weeks. The Benefit is also available to non-sickness-benefit eligible employees and the self-employed taking care of a family member who’s ill with COVID-19 or parents who can’t earn employment income because they need to take care of their children.
The CRA also announced plans to provide up to $5 billion in support to employees not eligible for EI regular benefits who lose their jobs as a result of COVID-19.
On March 15, the federal government implemented temporary changes to extend EI Work Sharing, which helps companies avoid layoffs due to a temporary decline in sales and/or production of at least 10% due to circumstances beyond the employer’s control. Under Work Sharing, employees agree to work a reduced work schedule and share available hours. Highlights of the key changes applying to arrangements prompted by COVID-19 and which will remain in place through March 14, 2021:
The CRA will provide eligible small businesses (including corporations eligible for the small business deduction, non-profits and charities a temporary, i.e., 3-month, wage subsidy equal to 10% of remuneration paid over the 3-month period of up to $1,375 per employee and $25,000 per employer. Employers will be allowed to reduce their income tax remittances withholdings on the employee’s pay.
Each jurisdiction in Canada is responding to the COVID-19 pandemic quickly and changing, either loosening or developing new, legislation on almost a daily basis. Click on the links below to get the latest information in real time.
The World Health Organization has international information and updates:
For travel updates:
The Public Health Agency of Canada has up-to-date information for Canadians travelling to foreign