The federal and provincial governments continue their almost daily announcements and updates with respect to financial aid for employees and employers in response to the COVID-19 crisis.
This article updates some of our recent articles on the aid available to employers and workers affected by the COVID-19 crisis and highlights some recent changes to the Alberta Employment Standards Code (“ESC”) in response to the pandemic.
Federal Updates: The Temporary Wage Subsidy for Employers (“TWS”) and the Canada Emergency Wage Subsidy (“CEWS”)
On March 18, 2020, Prime Minister Trudeau announced the 10% TWS for eligible employers (detailed in our article COVID-19: An Update to the Federal Aid Package Now Called the Canada Emergency Response Benefit (“CERB”). However, it soon became clear that this subsidy alone was insufficient to prevent mass terminations and layoffs in response to the COVID-19 crisis.
On March 27, 2020, Trudeau announced an additional subsidy program – the Canada Emergency Wage Subsidy (“CEWS”) – of up to 75% of employees’ earnings aimed at preventing further job losses and encouraging employers to keep or re-hire workers previously laid off as a result of COVID-19.
Further details of the subsidy released in recent days include[1]:
Clarification that eligible employers include individuals, taxable corporations and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities.
This CEWS is available to eligible employers who see a drop of at least 30% of their monthly revenues, year-over-year, for the calendar month in which the period began. For example, if revenues in March 2020 were down 30% compared to March 2019, the employer would be allowed to claim the CEWS on remuneration paid between March 15 and April 11, 2020.
In applying for the subsidy, employers will be required to attest to the decline in revenue.
The CEWS is available to eligible employers for up to 12 weeks, retroactive to March 15, 2020.
The CEWS will apply to 75% of the first $58,700 of an employee’s income (or a maximum of $847 per week).
Employers are encouraged to top-up the remaining 25% of their employees’ salaries.
There will be no overall limit on the subsidy amount that an eligible employer may claim.
Rules and penalties are being created to ensure the integrity of the system, including fines and possible imprisonment. In short, these are aimed at ensuring that the CEWS is not inappropriately obtained and to ensure that employees are paid what they are owed. Further details with respect to compliance are expected in the coming days.
For employers who are eligible for both the CEWS and the 10% TWS for a period, any benefit from the 10% TWS for remuneration paid in a specific period would generally reduce the amount available to be claimed under the CEWS in the same period.
An employer is not eligible to claim the CEWS for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the Canadian Emergency Response Benefit (“CERB”).
Eligible employers will be able to apply for the CEWS through the Canada Revenue Agency’s My Business Account portal, as well as a web-based application. Employers will have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees.
It is expected that funds will begin flowing to businesses in May.
Finance Minister Bill Morneau has advised that the federal government will continue to assess the situation as the COVID-19 crisis unfolds and that new measures may be implemented as necessary.
The Canada Emergency Response Benefit (CERB)
As of April 6, 2020, eligible workers can now apply for the CERB (details of which are set out in our article COVID-19: An Update to the Federal Aid Package Now Called the Canada Emergency Response Benefit (“CERB”) .
To avoid overloading the system, eligible workers can apply for the $2,000 per month benefit as follows:
With respect to the benefit, workers should note:
You must have stopped working due to reasons related to COVID-19.
For at least 14 days in a row for the period you are applying for, you must not have received employment income, self-employment income or provincial or federal benefits related to maternity or paternity benefits.
For subsequent CERB applications, you must continue to not work for reasons related to COVID-19 and not receive employment income, self-employment income or provincial or federal benefits related to maternity or paternity benefits.
The eligibility periods are fixed in 4-week blocks: March 15, 2020 to April 11, 2020; April 12, 2020 to May 9, 2020; May 10, 2020 to June 6, 2020; June 7, 2020 to July 4, 2020, July 5, 2020 to August 1, 2020, August 2, 2020 to August 29, 2020 and August 30 2020 to September 26, 2020.
You can reapply for CERB for multiple 4-week periods to a maximum of 16 weeks (4 periods).
You cannot quit your job voluntarily and receive the CERB.
You cannot receive CERB and Employment Insurance (“EI”) at the same time.
At his daily press conference on April 7, 2020, Prime Minister Trudeau indicated that further changes to the CERB program were anticipated in the coming days. To that end, it is expected that the benefit may be expanded to address some noted gaps, including possible coverage for:
Workers who have not stopped working entirely, but who are on reduced hours. To that end, Trudeau acknowledged on April 6, 2020 that there are individuals who are on reduced hours, earning less than the $2,000 monthly CERB, but are otherwise currently ineligible for the CERB.
Workers who have not earned $5,000 in the previous year. This current eligibility requirement has left out many individuals, including college and university students who are looking for work for the summer or after graduation, who did earn the requisite income in the last year.
We will update changes to the CERB as they are announced. In the meantime, those who are eligible under the current requirements are at least now able to apply.[2]
Alberta Updates
On the provincial side, Alberta Premiere Jason Kenney announced the closure of the Emergency Isolation Support Program - which was announced on March 18, 2020 as a temporary program to bridge the short period until the federal CERB was up and running – on April 6, 2020.
Kenney further announced that temporary workplace rules were now in place to help employers and employees manage rapidly changing conditions.
To that end, the Alberta Employment Standards Code (“ESC”) is being amended to:
Increase the maximum time for temporary layoffs from 60 days to 120 days. This change is retroactive for temporary layoffs related to COVID-19 that occurred after March 17, 2020. This means that employees can be laid off for up to 120 days before their employment is considered to have been terminated. The hope is that this measure will allow employers to avoid terminations and keep employees (many of whom will be eligible for EI while they are laid off) with their organizations and available for recall if the situation improves in the next 4 months.
Remove the employer requirement to provide group termination notice to employees and unions when 50 or more employees are being terminated.
Remove the 24-hour written notice requirement for shift changes.
Create a job-protected leave - which is unpaid - for employees caring for children affected by school and daycare closures or ill or self-isolated family members due to COVID-19. In this regard, the usual 90-day employment requirement is being waived. Further, the length of the leave will be flexible and linked to guidance from the Chief Medical Officer. While a medical note is not currently required, regular personal and family responsibility leave rules will continue to apply for all other circumstances.
These changes will be in place as long as the government determines they are needed and the public health emergency order remains.
Prepared by Laura Bracco-Callaghan
Scott Venturo Rudakoff’s employment group is here to assist employers and employees navigate the uncertainty created by the COVID-19 crisis. Do not hesitate to call or email any of our employment law practice members if you have a question about your obligations as an employer or rights as an employee.
No Legal Advice. This article is provided solely for information purposes. The information presented does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice.
[1] See the CRA website for online application information: https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra.html#how
[2] https://www.canada.ca/en/department-finance/news/2020/04/the-canada-emergency-wage-subsidy.html