As matters continue to evolve across Canada with respect to COVID-19 and greater measures are being taken for social distancing, we know that workplaces are already feeling the strain. This may be, in part, due to employees needing to self-isolate due to exposure, travel or being ill themselves. Or it may be due to having to temporarily reduce operations. Regardless of the circumstances, there are a number of options available and supports being provided by the government. We also know that wading through and deciphering the abundance of information can be challenging right now. For that reason, we’ve summarized below the options available to address temporary changes to workload and operations overall.
Work Redistribution & Out of the Box Options
While we understand that not all organizations can do so, many can look at creative options not previously considered to do things differently and/or offer different services. Wherever possible, we would encourage you to start by engaging your employees and asking them for their input/ideas. This can be done in small or well-spread-out groups, via video or one-to-one. It’s quite likely that your teams have ideas about how work could be re-distributed, how they could support others, taking on long overdue projects that don’t necessarily require specific skills, rotating shifts or staggering hours.
They may also have creative ideas about what you could be offering at this time (e.g. many organizations are taking their services online, offering free delivery, drive-through options, etc.) You may also have employees who voluntarily want to reduce their hours, take some time off without pay or be on vacation (locally, of course).
While we all try to navigate the daily changes occurring, try to consider what some of the positive possibilities might be.
The Work-sharing program provides an alternative to layoffs in circumstances such as this (i.e. circumstances out of an organization’s control). It allows employers to set up work-sharing agreements for employees with the same or similar job duties – in addition to those who do different work, but whose jobs impact one another (e.g. if slowdown in one area results in less work for another). From there, EI pays for hours not worked up to a maximum of 55% of salaries. For example, if employees with similar roles all have their time reduced by 20% (e.g. move from 5 to 4 full-time days), EI covers the remaining 20% (up to the maximum).
Eligible businesses, among other requirements, must be private, publicly held, or not for profit. Crown corporations are not eligible. Eligible employees must be regular full-time or part-time employees, eligible to receive EI and agree to a reduction of normal working hours. Other important guidelines to be eligible for the work-sharing program are as follows:
- If work activity increases during the timeframe of the agreement, all hours must be shared equally amongst employees in a given registered “work unit”
- All existing benefits must be maintained for employees, as well as pay for statutory holidays
- Work must be reduced by between 10% and 60% and can vary week by week, so long as the average over the agreement period is between 10% and 60%. For example, if the job is usually 40 hours per week, it can be split evenly between 2 employees
- The agreement must be for at least 6 weeks and no more than 26 weeks (with a possible 12-week extension, upon approval)
- At present time, applications must be submitted at least 30 days prior to the work share start date
If temporarily laying off employees is a necessary solution for your business, it’s important to understand the differences between provincially legislated (i.e. BC Employment Standards Act) and federally legislated (i.e. Canada Labour Code) organizations, where layoffs are concerned.
Organizations regulated provincially by the Employment Standards Act of BC (ESA BC)
Under the ESA BC, a layoff occurs when an employee is temporarily given less or no work with an agreed upon plan that the employee will return to their regular work schedule at a given date. An employee is considered laid off when they earn less than 50% of their weekly wages averaged over the most recent 8 weeks.
You may only temporarily layoff an employee if:
- It was clearly outlined in their employment agreement
- Your business is in an industry where layoffs are “common industry-wide practice”
- The employee agrees to the temporary layoff
Provided one or all of the above apply, layoffs under the ESA BC can only be up to 13 weeks in a 20 week period. If it goes longer than that, the layoff becomes a termination and you would need to provide pay in lieu of notice based on the day the layoff started (and/or in line with the termination provisions in the employment agreement). Note that how layoffs are defined and the particulars differ from province to province. For example, in Alberta, temporary layoffs can’t exceed 60 days in a 120 day period.
Accordingly, if you cannot meet one of the above conditions, the employee must be terminated in line with the ESA BC and/or in line with the termination provisions in the employment agreement.
In BC, it is not necessary to provide advanced notice in writing for a temporary layoff.
Organizations regulated federally by the Canada Labour Code
Under the circumstances of COVID-19, federally regulated layoffs do not require advance notice (nor for it to be in writing), provided the term of the layoff is three months or less.
- You must provide written notification prior to the layoff that the employee will be recalled to work on a fixed date, or within a fixed period no longer than six months (and the employee is recalled within that time frame); OR
- You do the following:
- You continue to pay the employee a mutually agreed-upon wage
- You continue to make payments on behalf of the employee to their pension plan
- The employee receives supplementary unemployment benefits under a SUB plan
- The employee would be entitled to your SUB plan, but is disqualified due to not being eligible for EI
Temporary Layoff or Sick Leave with a Supplemental Unemployment Benefit (SUB) Plan
SUB plans are used to provide supplemental payments to employment insurance (EI) benefits for eligible employees during a period of unemployment due to temporary stoppage of work (e.g. layoff), illness or quarantine. Relevant details about SUB plans are as follows:
- SUB plans must be registered in advance with Service Canada
- Employees must be receiving EI benefits
- The combined weekly SUB payments and EI payments must not exceed 95% of the employee’s normal weekly earnings, but employers may determine how much they want to top up within their SUB plans
- Payments from registered SUB plans are not deducted from the employee’s EI benefits. The top up must be financed by the employer
Note that for employees needing EI due to illness, self-isolation or quarantine, the one-week waiting period for EI sickness benefits has been waived. In addition, the requirement to provide a doctor’s note in order to apply/receive EI has been waived for those who have been asked to self-isolate or quarantine.
In addition to the above, there are a number of other measures that are being put in place to help support organizations and their people during this time.
Emergency Care Benefit
As announced this morning, the federal government will also be providing an emergency care benefit of up to $900 every two weeks (for up to 15 weeks) for those without paid sick leave or eligibility for EI (e.g. self-employed persons), if they are sick or need to take care of a family member who is sick.
Whether or not they currently qualify for EI, parents who are unable to work due to needing to care for/supervise children due to school closures will also be provided with the amount noted above.
Emergency Support Benefit
This will be used to support employees who lose their jobs as a result of COVID-19 but who don’t qualify for EI, as well as for self-employed individuals who are unable to continue work activities as a result of the impact of COVID-19.
Support for Small Businesses
Eligible small business will also be provided with a 10% wage subsidy for the next 90 days, up to a maximum of $1,375 per employee and $25,000 per employer.
Financial Support for Indigenous Communities
The government also announced $305 million towards supporting indigenous communities as a result of COVID-19. Further details will be announced as they are worked out.
We know this is a lot of information to absorb and things continue to evolve day-by-day. We will continue to provide further details and keep you updated as we know more.