COVID-19 and employment insurance – everything you need to know

The excerpted article was written by DLA Piper

Unprecedented numbers of Canadians are applying for Employment Insurance (“EI”) benefits due to an interruption in earnings caused by layoff, sickness or quarantine resulting from the COVID-19 pandemic. In this article, we explore some of the most common questions arising in relation to EI benefits at this time.

What changes have been announced to the EI benefits program in response to COVID-19?

Regular EI benefits

Employees who have been laid off by their employers as a result of business slowdowns or mandatory closures may be eligible to receive Regular EI benefits. Eligible employees may be entitled to receive a maximum of $573 per week for up to 45 weeks. To date, the federal government has not announced any changes to its Regular EI benefits program in response to COVID-19.

EI sickness benefits

Employees who are quarantined or sick due to COVID-19 may be eligible to receive EI sickness benefits up to a maximum amount of $573 per week for up to 15 weeks. Certain measures were adopted with respect to EI sickness benefits in order to respond to novel challenges posed by COVID-19. These measures include:

  • waiving of the one-week waiting period to allow new claimants who are quarantined to be paid for the first week of their claim;
  • the creation of a dedicated toll-free number to support enquiries related to waiving the EI sickness benefits waiting period (1-833-381-2725);
  • waiving of the obligation for people in quarantine to provide a medical certificate in support of their claim;
  • the possibility for quarantined employees to apply for EI benefits at a later date and to have their claim backdated to cover the period of the delay.

How do employees apply for EI benefits?

At this time, applications should be completed online by visiting the Service Canada website. Individuals who present themselves to Service Canada and who would otherwise be able to complete their application online will not be serviced in person. Employees who present themselves to a Service Canada office in person should expect to go through screening and to be required to practice social distancing measures. Employees experiencing symptoms of COVID-19 should not visit or enter any Service Canada office and should call 1-800-O-Canada for assistance with completing their EI application.

What must employers do once employees have experienced an interruption in earnings?

Without delay, employers must issue a Record of Employment (“ROE”) as this is the most important document allowing employees to access EI benefits. In order to complete the ROE, employers should be aware of and use the following codes when indicating the reason for the interruption in employee earnings:

  • When the employee is sick or quarantined, use code D (Illness or injury) as the reason for separation ‎‎(block 16). Do not add comments.‎
  • When the employee is no longer working due to a shortage of work because the business has ‎closed or decreased operations due to coronavirus (COVID-19), use code A (Shortage of work). ‎Do not add comments.‎

How long will it take for employees to receive their EI benefits?

Under normal circumstances, eligible employees are told to expect to receive their first payment within 28 days of submitting a completed application. In the present circumstances and in light of the fact that an unprecedented amount of applications are being received, the processing delay may be longer.

What other financial measures are available to assist employees and employers who are experiencing financial hardship due to COVID-19?

Canada Emergency Response Benefit

The Canadian government previously announced that it would make available an Emergency Care Benefit and an Emergency Support Benefit to employees who did not qualify for EI. On March 25, 2020, the government announced that it created a streamlined benefit, the “Canada Emergency Response Benefit” which combines these two benefits to streamline the application process and will provide $2,000 per month for four months to people who have lost their income due to COVID-19.

Supplementary Unemployment Benefit Plan

Employers who have no choice but to lay off their employees may elect to enroll in a Supplementary Unemployment Benefit Plan (SUB Plan) which allows employers to top up an employee’s employment insurance benefits during a period of unemployment due to a temporary or permanent layoff. The amount of the top up can be up to 95% of the employee’s weekly wages/salary, less the amount of the employee’s corresponding EI benefits.

Work-Sharing Program

The Government of Canada has instituted a “Work-Sharing Program” which exists to assist eligible ‎‎employers to avoid layoffs where there is a temporary reduction in the normal level of business ‎activity, ‎namely as a result of COVID-19. Previously, a Work-Sharing Program ‎could only last for a maximum of ‎‎38 weeks, however the maximum period has been extended to 76 ‎weeks in response to COVID-19. ‎

Participating employees receive income support in exchange for agreeing to work a reduced schedule ‎‎and to share available work with other employees over a specified period of time. ‎

Provincial Measures

Additionally, many provincial governments across Canada have announced measures to assist their respective populations in overcoming what is a period of financial hardship for many. Employers and employees should verify if they are eligible for any such programs.

The COVID-19 situation is a rapidly evolving one with new measures being adopted or modified day-by-day and hour-by-hour. We recommend that you consult with a member of our Labour and Employment Team who will ensure that you are acting upon the most up-to-date information.

Source: Lexology

Facts about the Canada Emergency Response Benefit

Ottawa announced Wednesday the Canada Emergency Response Benefit intended to quickly get cash to workers who need it and support their employers. Here’s a look at how the program is going to work.

What is it?

The federal government is proposing a taxable benefit of $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic. It’s intended to be a simpler and more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.

Who is eligible?

The benefit is to cover Canadians who have lost their job, are sick, quarantined or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures. The CERB would apply to wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance. It also applies to workers who are still employed, but are not receiving income because of disruptions to their work situation.

Who shouldn’t apply for the benefit?

If you are currently receiving EI benefits and expect them to continue, don’t apply for CERB. If your EI benefits end before Oct. 3, you can apply for CERB when those EI benefits cease, if you are unable to return to work due to COVID-19. Canadians who are eligible for EI regular and sickness benefits would still be able to access their normal EI benefits, if still unemployed, after the 16-week period covered by the CERB.

What period is covered?

Canadians are to begin receiving their CERB payments within 10 days of application. The CERB would be paid every four weeks and be available from March 15 until Oct. 3, 2020.

How do I apply?

The government plans to have an online portal open by April 6. Applicants will also be able at that time to apply via an automated telephone line or via a toll-free number.

Benefit to COVID 19 impacted workers may be model for future

By Jordan Press

THE CANADIAN PRESS

OTTAWA _ The newly created benefit for workers whose livelihoods are affected by COVID-19 may be a model for how the federal government helps unemployed Canadians in the future, Employment Minister Carla Qualtrough said Thursday.

Dubbed the Canada Emergency Response Benefit, the $2,000-a-month taxable benefit will be available to any worker who earned $5,000 in the previous year and whose income drops to zero due to COVID-19.

Qualtrough says the government opted for the single benefit because the decades-old employment insurance system wasn’t designed to handle an economic shock where millions of workers wouldn’t qualify for assistance.

Funded partially outside the EI system, the new benefit has pushed direct financial aid in the economic package to $52 billion, out of the $107 billion overall total.

Qualtrough said close to 10 per cent of EI-eligible workers have applied for help in just over a week and the labour crunch is likely to get worse.

That works out to approximately 1.5 million workers.

But there are still more than five million workers or almost one-quarter of the overall Canadian workforce who aren’t eligible for EI, including because they may be self-employed, a gig worker, or don’t have enough qualifying hours.

“What we’re going to show through the CERB is that we can actually have a really straightforward income-support system at the federal level,” Qualtrough said in a telephone interview with The Canadian Press.

“This could be the impetus to really, radically simplify how people access income support from the federal government.”

That’s a discussion her department has been having for some time, and the pandemic will fuel those talks, she said, but it’s a conversation that won’t be settled quickly.

Instead, Qualtrough said the government is focused on the labour situation right now one she warned would get worse before it improves.

With the benefit about to be introduced, the government warned Thursday of a text scam that may be praying on concerned workers by asking them to reply or click on a link to get the CERB, which isn’t officially available yet.

“I want to remind everyone that the government’s website is the best place to find reliable information on everything we’re doing,” Prime Minister Justin Trudeau said.

Trying to contain the spread of the novel coronavirus has forced governments to order businesses closed and companies to ask employees to work from home. The uncertainty has many small- and medium-sized businesses wondering if they’ll reopen once the economic storm has passed.

An analysis published Thursday by the Canadian Centre for Policy Alternatives estimated that nearly two millions workers are at the greatest risk of being laid off by the end of the month. If three-quarters of those workers lost their jobs by March 31, the national unemployment rate would rise to 13.9 per cent the worst it’s been in 70 years, wrote David Macdonald, the centre’s senior economist.

The government is urging any worker eligible for EI who loses their job due to COVID-19 to apply now for help. And for those who don’t qualify, Qualtrough said they should sign up for an online account through the Canada Revenue Agency to prepare for the new benefit being made available next month.

To qualify, an affected worker will have to reside in Canada and have earned $5,000 in the previous 12 months  including new parents who earned EI parental benefits _and have had their income dried up because of COVID-19. An online portal is supposed to be up on April 6, with the first automatic payments arriving 10 days after people apply.

Those who receive the benefit will have to reaffirm their eligibility every four weeks.

The benefit will be taxed, like EI payments, and the government will square up any issues during tax time next year.

“If we find out that you weren’t truthful or that you had income you didn’t declare, that will actually be swept up at the back end,” Qualtrough said.

EI for COVID-19? What we know so far about the new emergency response benefit

The excerpted article was written BY  

The Trudeau government recently unveiled an all-new benefit for Canadians reeling from the economic impact of the coronavirus pandemic: the Canada Emergency Response Benefit.

CERB would deliver $2,000 every four weeks for up to four months to workers who lose their income as a result of COVID-19. The new program combines and replaces two previously announced benefits — the Emergency Care Benefit and the Emergency Support Benefit — and raises the government’s spending on direct financial aid to $52 billion.

While CERB was part of the Liberals’ Emergency Response Act, which has already received royal assent, details on the program are still scant. Ottawa expects around four million applications for the new benefit, a source within the Canada Revenue Agency, which will be administering the program, told Global News.

Here’s what we know so far, along with some of the major questions that arise from the information the government has released as of March 26. Global News will be updating this article as more details emerge.

Who can apply for CERB?

CERB will be available to “all Canadians who have ceased working due to COVID-19,” a press release from the Department of Finance says. That’s regardless of whether applicants would also qualify for Employment Insurance (EI) or not, the document adds.

CERB will apply to wage earners as well as contract workers and freelancers. Canadians will be able to access the benefit whether they have lost their income as a result of the economic repercussions of the health emergency or can’t earn an income because they are sick, quarantined, caring for someone with COVID-19 or have had to stop working in order to care for children who are either sick or home from school and daycare.

Canadians who are still formally employed but not receiving any income would also be able to receive CERB.

“This would help businesses keep their employees as they navigate these difficult times,” according to the Department of Finance.

The list of beneficiaries is long, but at least two major questions about eligibility have emerged so far.

First, it’s not clear whether the benefit would apply only to Canadians who have seen their income reduced to zero or whether workers who have seen a significant reduction in income but are still bringing in some money would also be able to apply.

“That’s the gap in their program, without a shadow of doubt,” said Lindsay Tedds, a professor of economics at the University of Calgary.

The second question is whether Canadians who would normally qualify for either EI would be able to choose whether to apply for it or CERB.

First, it’s not clear whether the benefit would apply only to Canadians who have seen their income reduced to zero or whether workers who have seen a significant reduction in income but are still bringing in some money would also be able to apply.

“That’s the gap in their program, without a shadow of doubt,” said Lindsay Tedds, a professor of economics at the University of Calgary.

The second question is whether Canadians who would normally qualify for either EI would be able to choose whether to apply for it or CERB.

Don’t wait for Parliament, start processing applications for financial aid now: Singh

By Joan Bryden

THE CANADIAN PRESS

OTTAWA _ NDP Leader Jagmeet Singh is urging the federal government to immediately begin accepting applications for emergency financial aid from Canadians struggling during the COVID-19 crisis.

In a letter to Prime Minister Justin Trudeau, Singh says the government should begin receiving applications now so that it can get the money into the hands of Canadians as quickly as possible after Parliament approves the legislation necessary to get a promised $82 billion in direct financial assistance and tax deferrals flowing.

Parliament is to be recalled sometime next week and opposition parties have signalled their willingness to quickly approve the legislation.

Singh says he’s alarmed that many people who are without income now as businesses shut down all across the country to help curb the spread of the new coronavirus won’t get any of the emergency federal financial help until April or even May.

He says starting the application process now will ensure no one waits  “one day longer than absolutely necessary.”

Among other things, the government has promised to create two new emergency benefits for Canadians who don’t qualify for employment insurance and to increase the GST credit and the Canada Child Benefit.

In his letter to Trudeau on Thursday, Singh said his party will ensure the governing Liberals, who hold only a minority of seats in the House of Commons, will have the majority needed to pass the legislation putting the emergency measures into effect.

“It is my hope that knowing that your government will be able to pass these measures, you will be able to immediately open up applications and provide Canadians with information on how to access these new programs,” he wrote.

“Waiting until April to begin the application process means that Canadians will unnecessarily wait several more weeks to get the help they need.”

The emergency aid package is likely to be expedited with unanimous support through Parliament, which adjourned last week until April 20. But it will be recalled briefly next week to deal with the necessary legislation.

The Conservatives, Bloc Quebecois and Greens have all signalled their willingness to deal with it quickly.

Conservative Senate leader Don Plett said Thursday he expects the legislation will be debated and approved in one day in the House of Commons, possibly Tuesday, and the next day in the Senate, without amendment or delay.

“We are in an emergency situation here and we need to approve a stimulus package to keep the country going, to keep Canadians going here,” Plett said in an interview.

The governing Liberals are discussing with opposition parties how to minimize the number of MPs and senators who actually need to return next week, while maintaining each party’s proportional share of seats. The House of Commons requires only 20 MPs to be present for quorum; the Senate requires 15 senators.

Although the NDP will support the legislation, Singh urged the government to do more, including dramatically increasing a promised payroll subsidy of 10 per cent.

“Businesses may choose to keep people employed, with drastically reduced hours, in order to qualify for the subsidy. These employees may be worse off than if they had been laid off and could collect EI,” he said.

Singh also suggested that the government could double payments this month of existing income support programs, like the child benefit, to ensure that getting financial help to those who need it is “fast and easy.”

Most businesses not covered for potential interruptions from COVID-19, insurance industry warns

The insurance industry is sounding the alarm that most businesses in Canada are not covered for the potential business interruptions caused by the novel coronavirus pandemic.

“Generally, commercial insurance policies and traditional business interruption policies do not offer coverage for business interruption or supply-chain disruption due to a pandemic such as COVID-19,” said Craig Stewart, vice-president, federal affairs with the Insurance Bureau of Canada.

Businesses and individuals typically take out property and casualty (P&C) insurance to cover for natural disasters such as storms and fires. For example, about $3.7-billion of the damage caused by the 2016 fires in Fort McMurray, Canada’s costliest disaster, were covered by insurance.

Specialty coverage for disruption of business and supply-chain operations due to a pandemic does exist, and it could have been triggered by the World Health Organization’s official designation last week of the global outbreak as such. But “it is anticipated that the number [of companies that have it] is quite limited,” Mr. Stewart said.

Jennifer Beaudry, a spokeswoman for Intact Financial Corp., Canada’s largest P&C insurer, said coverage for pandemics “is not common in Canada and Intact does not offer [it].” She said Intact’s base contracts require an insured party to have a damaged building, equipment or stock on location to trigger business-interruption coverage.

Insurance-industry officials briefed the federal government last week about the potential issue after Ottawa reached out to key sectors to gauge how the pandemic could affect them.

“The government is in contact with Canadian insurers,” a finance department spokesperson said in an e-mail to The Globe and Mail. “We understand that not every business has business-interruption insurance and that pandemics are not likely covered in this type of insurance. If businesses have questions about their coverage, they should consult with their insurance advisers.”

Dennis Darby, president and CEO of Canadian Manufacturers & Exporters (CME), a leading business lobby group, said as a result of the pandemic, “manufacturers will have to shut down, business continuity will be affected and, unfortunately, it is unclear if they will be able to rely on their insurance policies.” The CME has urged the government to take steps to blunt the impacts on the Canadian economy.

The government moved Friday to help the private sector by making $10-billion in business credit financing available through the Business Development Bank of Canada and Export Development Canada. In addition, the Bank of Canada slashed interest rates and the Office of the Superintendent of Financial Institutions lowered the domestic stability buffer for Canada’s systemically important large banks, enabling them to increase their lending capacity by more than $300-billion.

Source: Chris Helgren – Reuters

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