Keeping Employees During the COVID-19 Pandemic

As we wait for further guidance on the Canada Emergency Wage subsidy, employers would do well to survey all resources available to them and establish a payroll management plan to weather through the COVID-19 pandemic. In this discussion, “employers” also includes self-employed persons.

There are options available to help employers keep employees. The temporary wage subsidy, for example, allows employers to reduce payroll remittances by up to 10% of remuneration paid, to a maximum of $1,375 per employee and $25,000 per employer. Private companies that are associated will not be required to share the maximum subsidy per employer.

Under the work sharing program, employees agree to reduce work hours by 10% to 60% and will qualify for EI benefits for up to 76 weeks. EI sick leave may be necessary when employees cannot work because of illness, injury or quarantine.  The Canada Emergency Resource Benefit is also available until October 3, 2020.

The table below lists these resources in order of priority, and also indicates the period during which the benefit will be available:

• Temporary wage subsidy – March 18, 2020 – June 6, 2020
• Canada emergency wage subsidy – March 15, 2020 – June 20, 2020
• EI sick leave – Any time
• Work sharing program – Any time (note the 10-day waiting period)
• Furlough employees on CERB/BC emergency benefit – Begin as late on July 3, 2020 to maximize benefit when ends on October 3, 2020.
• Employment/hiring grants (here & here) – Anytime

It may be helpful for employers to initiate discussions with their employees about accessing these resources. Employees may ask about renegotiating salary arrangements and/or voluntary retirement. It will be important to follow applicable employment standards in these discussions. We are available to assist.

Self-employed persons

It may be helpful for employers to initiate discussions with their employees about accessing these resources. Employees may ask about renegotiating salary arrangements and/or voluntary retirement. It will be important to follow applicable employment standards in these discussions. We are available to assist.

Many of the resources listed above are also available to self-employed persons. Understandably, self-employed persons are concerned that fluctuations in income could distort their benefit.

For example, a self-employed person could continue receiving a salary to claim the temporary wage subsidy and, if eligible, the Canada emergency wage subsidy. After those subsidies have been exhausted, if suitable, the worker could go on furlough in July and claim the Canada emergency wage subsidy until work resumes or through October 3, 2020.

Employers – whether incorporated or self-employed – would do well to survey all of their options in relation to employees, and then form a plan to resume business in the midst of and after the COVID-19 pandemic.

We are here to help.