New Government Programs & HR Related Information in Response to COVID-19
Dear Valued Clients,
We are providing you with information obtained thus far on the new government programs in response to the COVID-19 pandemic, including HR related topics.
Temporary Wage Subsidy Program
In conversations with the CRA’s office of Payroll Deductions and Contributions, we were advised that they are waiting for details regarding the Temporary Wage Subsidy Program. Information regarding who specifically qualifies and how employers are to submit reduced remittances is expected to be known in the next few days.
What we know now with respect to the Temporary Wage Subsidy Program:
- it is for a period of three months;
2. the subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer;
3. businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration – they are waiting for details regarding the process;
4. eligibility for this program are businesses that are eligible for the small business deduction, as well as non-profit organizations and charities – they have not yet released information to indicate that an application process is necessary.
Emergency Care Benefit
This Emergency Care Benefit will provide up to $900 bi-weekly, for up to 15 weeks. This flat- payment benefit would be administered through the Canada Revenue Agency (CRA).
- Workers, including the self-employed, who are quarantined or sick with COVID-19, but do not qualify for EI sickness benefits; or
2. Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not qualify for EI sickness benefits; or
- 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.
To be eligible, the individual must complete and submit an application. The application will be available in April 2020, and can be accessed via:
- CRA MyAccount Secure Portal;
2. My Service Canada Account; or
3. by calling a toll-free number equipped with an automated application process (this number is not available yet and should be released in the coming days.
If you are concerned about not having enough funds to pay your employees, you might consider: Reducing the employee’s hours and apply to the EI Work-Sharing (WS) Program. This program provides EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers. This can be done for up to 76 weeks.
You are eligible to apply if you are experiencing a downturn in business activity related to the global outbreak of COVID-19, and have:
- WS agreements signed between March 15, 2020 and March 14, 2021; or
2. WS agreements that began or ended between March 15, 2020 and March 14, 2021; or
- WS agreements that ended between June 23, 2019, and March 14, 2020 and are in their mandatory cooling-off period.
The employer must submit:
- An application
- An agreement signed by the employer and employee
- A recovery plan
If clients choose to temporarily layoff their non-union employees, they must be aware of the following:
- an employee is on temporary layoff when an employer cuts back or stops the employee’s work without ending his or her employment (e.g., laying someone off at times when there is not enough work to do). The mere fact that the employer does not specify a recall date when laying the employee off does not necessarily mean that the lay-off is not temporary;
- a lay-off, even if intended to be temporary, may result in constructive dismissal if it is not allowed by the employment contract – make sure to check the employment agreement. A constructive dismissal may occur when an employer makes a significant change to a fundamental term or condition of an employee’s employment without the employee’s actual or implied consent;
- a "week of layoff" is a week in which the employee earned less than half of what he or she would ordinarily earn (or earns on average) in a week;
- not more than 13 weeks of layoff in any period of 20 consecutive weeks; or
more than 13 weeks in any period of 20 consecutive weeks, but less than 35 weeks of layoff time in any period of 52 consecutive weeks, where:
- the employee continues to receive substantial payments from the employer; or
6.the employer continues to make payments for the benefit of the employee under a legitimate group or employee insurance plan (such as a medical or drug insurance plan) or a legitimate retirement or pension plan; or
- the employee receives supplementary unemployment benefits; or
- the employee would be entitled to receive supplementary unemployment benefits but isn't receiving them because he or she is employed elsewhere; orsx7
- the employer recalls the employee to work within the time frame approved by the Director of Employment Standards.
- If an employee is laid off for a period longer than a temporary layoff as set out above, the employer is considered to have terminated the employee’s employment and the employee will be entitled to termination pay and/or severance pay.
- If a lay-off goes on longer than a temporary lay-off, the employee’s employment is deemed to have been terminated on the first day of the lay-off—any time after that does not count as part of the employee’s period of employment, even though the employee might still be employed for purposes of the “continuously employed for three months” qualification.
- Termination pay must be paid to an employee either seven days after the employee’s employment is terminated or on the employee’s next regular pay date, whichever is later. The termination-of-employment rules are entirely separate from any entitlements an employee may have to be paid severance pay.
- Special rules for notice of termination may apply when the employment of 50 or more employees is terminated at an employer’s establishment within a four-week period. This is often referred to as mass termination. (Note: An "establishment" can, in some circumstances, include more than one location.) When a mass termination occurs, the employer must submit Form 1 (Notice of termination of employment) to the Director of Employment Standards. There are exceptions.
- The employer must provide the employee notice of termination (or termination pay instead of notice) if he or she has been continuously employed for at least three months.
- Notice comes in two forms: Statutory Notice and Reasonable Notice. Statutory Notice is the minimum amount of notice that an employer must provide an employee according to laws made by the government (i.e. the Employment Standards Act). Reasonable Notice, on the other hand, is the amount of notice that an employer must provide an employee according to common law “precedents”, or similar cases from Canadian courts.
- The Ontario Employment Standards Act’s (ESA) minimum Statutory Notice provisions provide only one week of notice per year of service, up to a maximum of 8 weeks. Reasonable Notice can provide up to a few months of notice per year of service, up to a maximum of about 30 months.
- Employers are required to continue benefits to the employee during the statutory period.
The layoff and termination sections of this communication is general information. Each situation varies and may have exceptions to the rules. Clients are advised to contact a Labour and Employment Lawyer if they are considering terminating an employee as each circumstance is different.
Pramen Prasad CPA, CA, CMA
Managing Partner Prasad & Company LLP
If you have any questions, you can reach us at:
(416) 226-9840 or
1 (888) 550-8227