COVID-19: Overview of Federal Employer Support Programs

Mar 24, 2020  |   COVID-19

This brief includes the latest available information on the following employer related programs and relevant legislation on the following topics:

  • Temporary Workforce Reductions
  • Employers Paying Employees While in Receipt of EI Benefits
  • Employer Financial Support through Revenue Canada
  • Employers Sick Leave Benefits
  • Statutory Leaves
  • Workers Compensation
  • Human Rights Obligations

Temporary Workforce Reductions

COVID-19 has impacted supply chains and the global economy which is having material impact on the Employer’s business. As a result, many employers are facing difficult workforce decisions. Below is an overview of considerations for employers:

  • All jurisdictions contain temporary layoff provisions
  • Absent a right to layoff an Employee in an employment agreement or with Employee consent, a temporary layoff can constitute constructive dismissal
  • In B.C. there are no provisions allowing a temporary layoff unless a layoff is allowed under a collective agreement, incorporated in an employment agreement, agreed to by the Employee or is a normal part of the industry (i.e. logging)
  • Despite the risk, a temporary layoff may be preferable to both the Employer and the Employee – especially if the alternative is a termination without cause
  • Be mindful of each jurisdiction’s maximum layoff length – if exceeded, the layoff, even if consented to, will be deemed to be a termination. In Ontario, temporary layoff cannot exceed
    • 13 weeks in any period of 20 consecutive weeks, or
    • More than 13 weeks in any period of 20 consecutive weeks but less than 35 weeks in any period of 52 weeks where essentially the employer continues payments or benefits – i.e. group health and welfare benefits

Employers Paying Employees While in Receipt of EI Benefits

There are two programs available to Employers where they can continue to pay Employees while they are receiving Employment Insurance payments:

Employer Top Up

  • Employer top up payments are deducted from EI payments
  • If Employer has registered a Supplemental Unemployment Benefit Program (SUB) with Service Canada payments from the SUB plan are not deducted from EI benefits

Employer Reduced Hours (Work Share Program)

  • Work shortage is temporary and beyond the Employer’s control
  • Employee’s working hours average reduction from 10-60%
  • Agreement is made between Employer and Employee and must have a minimum duration of 6 weeks with the duration maximum now going from 38 weeks to 76 weeks
  • Only applies to permanent (full/part time staff) in units of 2 or more Employees
  • Employee must be eligible for employment insurance benefits
  • Employee earnings from the Employer will not be deducted from the employment insurance benefits paid
  • No waiting period is required
  • Employer must submit and implement a recovery plan
  • Application must be submitted a minimum of 30 days prior to requested start date

Employer Financial Support

(Small Business Temporary Wage Subsidy)

  • Program is available for a period of up to 3 months and eligibility is restricted.
  • Provides for support equal to 10% of remuneration paid during the 3-month period
  • There is a maximum subsidy of $1,375 per Employee up to a maximum of $25,000 per Employer
  • Subsidy immediately obtained through the reduction of remittances of income tax
  • Program is administered through Canada Revenue Agency

Employer Sick Leave Benefits

  • Any Employees experiencing symptoms, or exposed to someone with COVID-19, or someone returning from international travel should be immediately sent home to self-quarantine
  • Employees may be able to avail themselves of paid sick time pursuant to the Employer’s policy or use available vacation or apply an advance against vacation entitlement
  • Employers should also apply the foregoing to Employees that self-quarantine as a result of potential exposure
  • Employers should be flexible in applying their absenteeism policy requiring a medical note to substantiate an absence due to flu like symptoms. Requesting a medical note could put an unnecessary strain on the health care system and also expose an otherwise uninfected person to the virus

Statutory Leaves

  • Independent of Company policy, many jurisdictions contain job protected leaves for illness (both short and extended durations), some with pay
  • Keep in mind: there are also several job protected leaves related to the care for ill family members – which could apply to caring for a family member with COVID-19
  • Many provinces are working to implement new protected leaves designed to address pandemic scenarios

Workers Compensation

  • Employees who contract COVID-19 in the course of their employment may be able to claim workers’ compensation benefits
  • Infection from other Employees is likely not sufficient enough to establish a claim
  • The infection typically has to be an ‘occupational disease’
  • These types of claims were made by healthcare workers during the SARS outbreak of 2003
  • Even though the likelihood of a legitimate claim for workers’ compensation benefits related to COVID-19 is low in most workplaces, awareness on how to respond to a claim is important
  • Employers may have an obligation to complete forms when faced with an employee claim

Human Rights

  • Employers have a duty to accommodate an Employee’s disability
  • While the ‘flu’ is typically not considered a ‘disability’ under human rights legislation, now that it has been declared a pandemic, COVID-19 may be considered a ‘disability’
  • Employees may also request accommodation (i.e. being able to work from home or take a leave) related to the fear of contracting COVID-19
  • While these requests will generally be unsupported, there could be a situation where an Employee has presented medical evidence that suggests they are more susceptible to death if they contract COVID-19 due to a pre-existing medical condition and are requesting to minimize the likelihood of infection by self-quarantine
  • All requests will need to be carefully considered in the context of the particular Employee
  • Employers should require Employees who have contracted COVID-19 or have been placed in quarantine to get medical clearance before returning
  • That said, absent a reasonable justification, Employers will not likely be able to require an Employee to undergo a COVID-19 test following an absence due to ‘flu-like’ symptoms before returning to work