The work Sharing Program provides income support to employees eligible for EI who agree to reduce their normal working hours (10% -60%) due to the developments beyond their control of their employers.
In general, the employer must have experienced a recent decline in business activity of at least 10% to be eligible for the program, which means that many businesses who are experiencing a downturn due to COVID-19 should be eligible. Effective March 15, 2020, the maximum duration of such agreements was extended from 38 weeks to 76 weeks, eligibility requirements were eased, and the application process has been streamlined.
Employers and employees must agree to participate in work-sharing and apply together. The employer must:
- be a year-round business in Canada in operation for at least 1 year;
- be a private business or a publicly held company; and
- have at least 2 employees in the work-sharing unit.
Also note that eligibility was also extended to:
- Government Business Enterprises, and
- not-for-profit employers experiencing a shortage of work due to a reduction of business activity and/or a reduction in revenue levels due to COVID-19.
- be year-round, permanent, full-time or part-time employees needed to carry out the day-to-day functions of the business (“core staff”),
- be eligible to receive EI benefits, and
- agree to reduce their normal working hours by the same percentage and to share the available work.
Employee eligibility was also extended to:
- employees considered essential to the recovery and viability of the business, which would include, for example:
- technical employees engaged in product development;
- outside sales agents; and
- marketing agents.
The employer pays the wages to employees for the hours they worked, as per normal, and then notifies the government through a utilization report of the work hours that employees missed. The employees are paid directly from EI for the percentage of their benefit rate that corresponds with the percentage of the work hours they missed.
For example, if the employee missed 50% of their normal weekly hours due to work-sharing, they would receive 50% of their benefit rate from EI. Their benefit rate will not be equivalent to their normal wages, as it is generally 55% of their average weekly earnings to a maximum of $573 per week (for 2020).
Also, the employer must maintain all existing employee benefits.
A simplified process and set of forms have been introduced. Employers must complete these forms:
- EMP5100 – Application for a Work-Sharing Agreement
- EMP5101 – Attachment A: Work-Sharing Unit Attachment
Previously, a recovery plan was required, however, it was replaced by a single line of text within the application. Also, the requirement that the application be submitted at least 30 days prior to the commencement of the program has been eliminated.
Finally, weekly utilization reports must be submitted to ensure the appropriate EI benefits are calculated and paid.
For full details on the program and application process, Click here
The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a blog such as this, a further review should be done by a qualified professional.
No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.