COVID-19 and Employment Insurance Benefits

Legal industry news
  • News
  • March 18, 2020

COVID-19 and Employment Insurance Benefits

Updated March 19, 2020

 

EI Benefits for Employees under Quarantine

The Federal Government and BC Provincial Government require that people who are arriving from outside of Canada or who exhibit signs and symptoms of COVID-19 are required to self-isolate for 14 days.

Employees who go into self-isolation because: they were asked by their employer because of government recommendations; they were asked by a public health official; or were required by law can receive Employment Insurance (EI) sickness benefits.[1]

Employees who are eligible could receive up to 15 weeks of financial assistance representing up to 55% of their earnings and up to a maximum of $573 a week.

Employees can apply for sickness benefits at: https://www.canada.ca/en/services/benefits/ei/ei-sickness.html.

After eligible employees in quarantine complete their application, they will be entitled to special support. Normally a worker who qualifies for the benefits has a one-week waiting period before payment starts.  However, the government has advised that for any worker quarantined due to COVID-19, the government is eliminating the waiting period entirely so a worker can obtain benefits immediately. Further, quarantined individuals who apply for EI benefits will receive priority EI application processing and will not have to provide a medical certificate.

In order to waive the one-week EI sickness benefits waiting period, employees are asked to contact Employment and Social Development Canada’s dedicated toll-free number for people under quarantine: Telephone: 1-833-381-2725 (toll-free). For more information visit: https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html

Specific aspects of EI sickness benefits for people under quarantine may change in the coming days.

In British Columbia, the government has not at this time implemented any sick leave entitlements or other special compensation beyond what is being offered by the Federal government in EI sickness benefits.

EI Benefits for Employees Working Reduced Hours

For employees that must work reduced hours because employers have less shifts to offer, one option may be to enter into a Work-Sharing Agreement between the employer, the affected employees, and Service Canada.

Service Canada’s Work-Sharing program is designed to help employers and employees avoid layoffs when there is a reduction in the employer’s business and it was out of their control. Employees who participate in the Work-Sharing program agree to work a reduced schedule and share the available work with another employee (or employees) over a specified period of time. EI benefits are then provided for eligible employees to help supplement the loss of income due to reduced working hours.

To help deal with the shortage of business due to the COVID-19 pandemic, the Federal Government is implementing temporary special measures for the Work-Sharing Program. The measures are available to employers that have been impacted directly and indirectly. For employers who are actively participating in the program, Work-Sharing agreements may be extended by an additional 38 weeks, for a total of 76 weeks. If an agreement has recently expired, the mandatory waiting period is waived so that employers may immediately apply for a new agreement, without waiting between applications.

To be eligible for the Work-Sharing program, there must be a reduction of 10% or more of the company’s business activity. Meeting this threshold may not be onerous given the impact that COVID-19 has had on many businesses.

The employer and the employee must apply together to initiate a Work-Sharing agreement with Service Canada. Although employers require a Recovery Plan to show how they intend to restore working hours, the recovery plan requirements have been eased due to the pandemic.

Finally, if the Work-Sharing agreement is approved, employers will need to file a Utilization Report every week. The Utilization Report tracks the amount of time that Work-Sharing is used. The report helps determine what benefits are payable on a week-to-week basis.

EI Benefits for Employees because the Workplace has closed due to Government Restrictions on Businesses

The B.C. provincial government has banned gatherings of more than 50 people. Violating the order by permitting the gathering of 50 or more people at which you are the owner, occupier or operator, or you are otherwise responsible is an offence under the BC Public Health Act.

Businesses that permit gatherings of 50 or more individuals have been impacted by this policy and employees who are not required to self-isolate may nonetheless be restricted from attending work. Employees in this category may be eligible for EI benefits depending on their individual circumstances. However, initial eligibility requires that the individual has lost a job or has been laid off and has experienced an interruption in earnings for at least seven (7) consecutive days.

These employees will also need to have worked the required minimum number of insurable employment hours. The required minimum hours is between 420 and 700. The amount of hours required depends on an individual’s economic region. Individuals receive 55% of their average insurable weekly earnings, up to a maximum of $573. The employee would also need to comply with all other requirements of EI, including being ready, willing, and capable of working each day as well as actively looking for work.

For a more detailed review of regular EI eligibility visit: https://www.canada.ca/en/services/benefits/ei/ei-regular-benefit/eligibility.html.

The situation regarding COVID-19 is constantly changing. Some of the restrictions associated with EI benefits will likely be relaxed as the situation evolves. For example, on March 16, Prime Minister Trudeau announced that the government plans to recall Parliament to take legislative measures around Employment Insurance to help Canadians whose employment has been impacted by COVID-19.

On March 17, 2020, B.C. Premier John Horgan said that the B.C. government is in consultation with the federal government and has made it “abundantly clear” to the federal government that it cannot “shortchange” people. He said there are improvements that can be made on “how we access” EI in Canada.

Access to Employment Insurance and how the system will apply to people impacted by the COVID-19 pandemic is changing. Specific entitlements and eligibility will need to be reviewed daily to ensure that the information in this memo is up to date.

However, at the moment, employers may need to formally place employees on layoff to have access to EI benefits.

On March 18, 2020, the Prime Minister announced additional support and changes to EI benefits.  These changes will begin in April of 2020 and will allow workers who do not typically qualify for EI benefits to apply. For example, workers caring for a sick family member and parents who have to care for children due to school closures may apply for benefits.

Supplemental Unemployment Benefit Program for Employees

 

During the COVID-19 crises, employers may wish to assist employees to increase their employees’ weekly earnings from Employment Insurance when they are unemployed due to temporary stoppage of work, illness, or quarantine. This is done by utilizing a Supplemental Unemployment Benefit (SUB) plan.

Payments from SUB plans that are registered with Service Canada are not considered as earnings and are not deducted from EI benefits (pursuant to subsection 37(1)-(2) of the EI regulations).

SUB plans must indicate the value of payments, either as a percentage of the employee’s normal weekly earnings or as a fixed amount. SUB payments must be made out periodically (i.e. weekly, or bi-weekly basis). The SUB payment and the EI benefit amount can represent as much as 95% of the employee’s weekly earnings.

SUB plans are registered by Service Canada through the SUB program in Bathurst, NB and must be registered before the effective date. Officers from the SUB program assess employers’ SUB plans against requirements set out in section 37(2) of the EI Regulations. Officers also assist employers in creating SUB plans that meet the necessary requirements. For more information on registering a SUB plan, visit: https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/reports/supplemental-unemployment-benefit/registration.html

The SUB plan registration form can be found here: https://catalogue.servicecanada.gc.ca/content/EForms/en/Detail.html?Form=NAS5036

EI Regulations require that SUB plans do, and conform to, the following:

  • Identify the group of employees covered and the duration of the plan;
  • Cover a period of unemployment caused by 1 or a combination of the following:
    • Temporary stoppage of work;
    • Training; and
    • Illness, injury or quarantine;
  • Require employees to apply and be in receipt of EI benefits to receive payments under the SUB plan;
  • Require that the combined amount between EI benefits and SUB payments do not exceed 95% of the employee’s normal weekly earnings;
  • Must be entirely financed by the employer;
  • Require that on termination all remaining assets will be reverted to the employer or be used for payments under the plan or for administrative costs;
  • Require that written notice of any change to the plan be given to Service Canada within 30 days after the change;
  • Provide that the employees have no vested right to payments under the plan except during unemployment; and
  • Provides that payments in respect of guaranteed annual remuneration, deferred remuneration or severance pay will not be reduced or increased by payments received under the plan.[2]

One or more of the following documents may be used to describe the plan:

  • a union or association agreement;
  • a trust agreement;
  • a private carrier’s insurance policy;
  • an employee handbook;
  • a personnel policy bulletin; and
  • any signed commitment by the employer.

For a more detailed description on calculating the payment plan or the specific requirements please see: https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/reports/supplemental-unemployment-benefit/requirements.html#s2_7

The types of unemployment that the SUB program covers is one or a combination of the following:

  1. Temporary Stoppage of Work: SUB plans are intended for periods of unemployment caused by a temporary stoppage of work. This would include employees who receive EI benefits for temporary lay-off.

Note that EI for temporary layoff from work are regular benefits and claimants must meet all EI requirements even though they are on a temporary stoppage of work. SUB payments may not form part of a separation package or form any part of a work sharing agreement or short-week benefits.

  1. Training: Employees must be in receipt of Employment Insurance benefits.
  1. Illness, injury or quarantine: the employee must be in receipt of EI sickness benefits.

Further, a SUB plan may provide payments up to a maximum of 95% of the normal weekly earnings when the employee is not in receipt of EI benefits, and:

  • is serving the one-week EI waiting period; or
  • has insufficient hours of insurable employment to qualify for EI benefits; or
  • has exhausted the EI benefit entitlement.

The employer may decide which, if any, of the above situations are included in the plan.

For a more detailed description on the types of unemployment that is covered by the SUB program visit: https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/reports/supplemental-unemployment-benefit/requirements.html#s2_2

Announcement Regarding New Benefits

On March 18, 2020, the Federal government announced financial support of up to $27 billion for workers and businesses affected by the COVID-19 pandemic.

A new “emergency care benefit” program has been created which provides up to $900 every two weeks, for up to 15 weeks to help support the following workers:

  •  Workers, including self-employed who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits;
  •  Workers, including self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but not qualify for EI sickness benefits; and
  • Parents with children who require care or supervision due to school closures, and are unable to earn employment income, irrespective of whether they qualify for EI or not.

This new emergency care benefit program will begin in April of 2020.  Canadians who want to apply will have to attest that they meet the eligibility requirements and will need to re-attest every two weeks to reconfirm their eligibility.

Further, a new “emergency support benefit” will provide longer-term income support for workers. Specifically, the emergency support benefit will be delivered through the CRA and will provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment.

We expect that the federal government will provide more detail about these benefits sooner rather than later given the rapidly evolving COVID-19 pandemic.

For more information on the emergency care benefit and the emergency support benefit visit: https://www.canada.ca/en/department-finance/news/2020/03/canadas-covid-19-economic-response-plan-support-for-canadians-and-businesses.html

[1] https://nationalpost.com/news/canada/canada-sick-leave-ei-benefits-coronavirus

[2] https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/ei-employers-supplemental-unemployment-benefit.html