COVID-19: Employer Assistance, New CLC Leave, Vacation Time, and Benefits
By Kai Ying Chieh and Preston I.A.D. Parsons
Federal Government Supports for Employers
As of March 30, 2020, the Federal government has provided a clearer outline of certain measures that are aimed at assisting businesses who may be struggling to manage the impacts of COVID-19 on the economy and the continued operation of their businesses.
Canada Emergency Response Benefit
In revision of the previously announced Emergency Care Benefit and Emergency Support Benefit, the government announced that a streamlined Canada Emergency Response Benefit (“CERB”) would be established to provide $2,000 per month for up to four months for workers-wage earners, contractor workers, and self-employed individuals-who lose their income as a result of the COVID-19, including:
- Workers who have lost their job, are sick, or quarantined;
- Workers who are taking care of someone who is sick with COVID-19; and
- Working parents who must stay home without pay to care for children who are home because of school and daycare closures.
Importantly for employers, workers who are still employed but who are not receiving income due to disruption in the workplace as a result of COVID-19 would also qualify for the CERB.
The CERB portal for access is not yet available but the government is aiming to make the portal available in early April. The CERB would be paid every four weeks and would be available retroactively from March 15, 2020 until October 3, 2020.
It is important for workers and employers to understand the interplay between EI regular and sickness benefits and the CERB. Workers already receiving EI benefits would continue to receive them and should not apply to the CERB. Should their EI benefits end before October 3, 2020, those workers would then be able to apply for the CERB.
Temporary Wage Subsidy
The Temporary Wage Subsidy for Employers is a three-month measure that will allow certain employers to reduce the amount of payroll deductions that must be remitted to the Canada Revenue Agency (“CRA”). Previously, the Federal government announced a 10% wage subsidy for certain eligible employers to assist with the effects of COVID-19. This plan drew some criticism for failing to adequately compensate employers given the scale of this situation.
As of March 30, 2020, Prime Minister Trudeau announced that the Temporary Wage Subsidy will be amended to extend to business, both big and small, who experience a decrease in revenues of at least 30 percent. In these cases, the government may cover up to 75 percent of a salary on the first $58,700, meaning payments of up to $847 per week. The wage subsidies will be retroactive to March 15, 2020.
More specific details on the Temporary Wage Subsidy program are to be announced tomorrow, on March 31, 2020. We will continue to keep our clients updated on the changes being made to support businesses during this time.
New Loan Programs for Businesses
The government has also announced new loan programs for businesses including, most notably, the Canada Emergency Business Account. This program, implemented by financial institutions, will provide interest-free loans of up to $40,000 to small businesses and not-for-profit organizations with payroll costs of between $50,000 to $1 million in 2019.
The intention of this program is to help cover operating costs during a period of temporarily reduced revenue due to COVID-19. Businesses should contact their financial institutions for more information and to apply for the Canada Emergency Business Account loans and other credit programs being implemented in response to COVID-19.
Other Changes to Assist Employers
A number of other federal changes have been announced in recent weeks that may assist employers in managing their obligations during this time, including:
- The Bank of Canada has lowered interest rates to 0.25%;
- Extensions to tax return filing extensions; and
- An extension for GST/HST remittances and customs payments to June 30, 2020.
BC Government Supports for Employers
BC Businesses will also have the benefit of certain provincial initiatives to assist them during this time, including:
- A deferral of the Employer Health Tax until September 30, 2020; and
- Extensions to tax filing and payment deadlines for PST and other applicable taxes until September 30, 2020.
The BC Government has put together a factsheet on COVID-19 Supports for Small Businesses in BC which provides a summary of available supports known at this time.
We expect that as the situation evolves, there may be other changes announced and will keep our clients apprised of any such changes that we expect will assist employers during this difficult time.
COVID-19 Leave – Canada Labour Code
Recently several provinces, including British Columbia, have amended employment standards legislation to add a COVID-19 specific (or other public health emergency) unpaid leave. The federal government has also passed legislation to amend the Canada Labour Code (“the Code”) by adding a new COVID-19 related leave that applies to federally-regulated employers until October 1, 2020. After that date, the COVID-19 related leave is intended to be replaced by a quarantine leave under the medical leave regime of the Code.
Details about this new COVID-19 related leave under the Code include:
- The leave applies to federally-regulated employees who are “unable or unavailable to work for reasons related to COVID-19”.
- The leave is unpaid and may last up to 16 weeks (or another number of weeks if changed by regulation).
- Employees intending to use this leave must provide written notice, as soon as possible, identifying the reason for and length of the leave. The employee has an ongoing obligation to notify the employer in writing as soon as possible if the length of the leave changes.
- Employees are not required to provide a medical certificate to take this leave; however, the employer may require the employees to provide written declarations supporting their requests for the leave and to change the length of the leave.
While taking this leave under the Code, certain protections and entitlements exist for those employees on leave:
- Their work is deemed continuous despite the leave and their pension, health, disability benefits and seniority continue during the leave, although the employer can require that the employee pay their portion of their benefits premiums while on leave in order to have their benefits continued;
- They are protected from reprisal for taking the leave; and
- They are entitled, if they ask in writing, to be informed of employment, promotion, and training opportunities that may be available to them while on leave.
Finally, this leave has unique interplay with other leaves the employees may already be entitled to and enjoying:
- Notably, employees can interrupt their vacation to take this COVID-19 leave and may even postpone their vacation until after this leave ends; and
- Parental leave may also be extended by this leave.
One question being asked by many employers and employees at present is whether BC employers can require employees to use up accrued vacation time right now due to shortages of work caused by COVID-19 related business disruptions.
Subject to contrary agreement in an employment contract or collective agreement, employers with employees who are subject to the BC Employment Standards Act (“ESA“) can require employees to take vacation at times that suit the employer. In most workplaces, both parties work together to determine mutually agreeable times for vacation; however, in the current situation, it may be a very practical solution for vacation time banks to be used up to extend the employment of an employee that would otherwise be terminated or paused due to a layoff, particularly where the employee has paid vacation days that they can use.
As a reminder, for employees covered by it, the BC ESA requires that employers permit employees to take the vacation in blocks of a week duration.
Overall, using vacation time strategically right now may be a very practical and reasonable solution of some assistance in the short term for many employers to require employees to avail themselves of, particularly until clarity on the various federal and provincial supports for businesses is outlined and such are implemented in weeks to come. However, for federally regulated employers, be aware of the express ability to interrupt and postpone vacation until after a COVID-19 leave, if the employee exercises their rights to take it.
The unprecedented situation society finds itself in right now has caused many employees and employers to feel overwhelming levels of stress and anxiety. Where employers have benefit plans in place that include employee family assistance programs, counselling or psychology benefits, and similar supports, we recommend they remind employees of these benefits and encourage them to avail themselves of them. Keeping your workforce as healthy as possible in a trying time will help employees transition back to the workplace faster when this situation recovers.