Wage Subsidies, EI, Work Sharing Options, SUB and Loans
With so many changes and new information coming almost daily, we wanted to share updates that impact business in a digestible format. Below you will find quick summaries of each key area, with Work Sharing having an explanatory video (it’s the area we are getting the most questions about) and the full, comprehensive Employer’s Guide to Government of Canada’s Support Programs presentation can be viewed or downloaded for free here (updated regularly).
Please see our dedicate page to COVID-19 Resources for further tools, information and support.
- Businesses are encouraged to continue to operate.
- How you manage this situation will impact employee morale and retention.
- Layoffs should be viewed as a last alternative.
- Creative thinking to solve business challenges can lead to long-term savings and operating efficiencies.
- Focus on the long-term as well as the immediate need.
What is wage subsidy? It is when a subsidy is provided that covers a percentage of your employee’s salary, often with caps. The Wage Subsidy offered during the COVID-19 period has reduced revenue requirements as well as specific start and end dates, and caps per employee and per business. This is a hot topic and rapidly changing, so please see the download for the current specifics and dollar amounts. Here are payroll register templates to help you calculate:
Companies with a 2019 payroll of between $50,000 and $1,000,000 are eligible for interest-free loans from the federal government of up to $40,000. These loans are administered through local financial institutions and up to 25% will be forgiven if the loan is paid back prior to December 31, 2022. To see more details, please view/download the full presentation here.
Employment Insurance Options
There are multiple different options within the Canadian Employment Insurance (EI) program with new additions specifically for the current pandemic. A quick look at the options includes:
- Sickness Benefits
- Regular Benefits
- Work Sharing Program
- Canada Emergency Response Benefit (new, more info below)
To find out who is eligible, if it’s available to self-employed people, the number of weeks covered, if there’s a waiting period and the maximum earnings covered please reference the full presentation (viewable/downloadable here).
Record of Employment (ROE) Web
To apply for any EI program, your employer needs to submit a Record Of Employment (ROE) which confirms how long you’ve worked for them and subsequently how many insurable hours you have. There is now an online way to submit ROEs (yay!). Here is the link to ROE Web. The application is intuitive, but if you’re unsure about which code to use (when you get to that part) here is a quick summary:
- Use Code A – Shortage of Work / End of Contract or Season if you’ve closed your business or adjusted your workforce due to COVID-19.
- Use Code D – Illness/Injury for actual illness or an employee who has tested positive, or an employee who has traveled and is now self-isolating.
- Use Code N – Leave of Absence if the employee is making a personal choice to distance themself out of an abundance of care.
- Note: BOX 18 – Do not put a note in this field. This “flags” the ROE in the system and may slow processing.
Canadian Emergency Response Benefit
If you have stopped working because of COVID-19, the Canada Emergency Response Benefit (CERB) may provide you with temporary income support. The CERB is now accessible through a secure web portal. Applicants will also be able to apply via an automated telephone line or via a toll-free number. More information is available at Government of Canada or Dutton Employment Law.
This benefit is not available to people who quit their jobs or who opt for EI over paid work.
The payment will be taxed at the employee’s annual federal tax rate.
Work Sharing Program
Here is a quick video that explains this unique option:
Supplemental Benefit Plans and Templates
Here is a quick review of this plan:
- Employers can use a Supplemental Unemployment Benefit (SUB) plan to increase their employees’ weekly earnings when they are unemployed due to a temporary stoppage of work, training, illness, injury or quarantine.
- Employees should not have a fixed work schedule while on a temporary stoppage of work, but instead are called to work when work is available. This work can be from home.
Here is a quick video that dives a bit deeper into how to set up a SUP: