20 August 2020
Temporary layoffs, CERB, and CEWS: A COVID-19 update
Both provincial and federal governments continue to update legislation and programs introduced this year in response to COVID-19. This blog post highlights some of the recent changes.
Temporary Layoffs in B.C.
Under the Employment Standards Act, RSBC 1996, c. 113 (the “Act”), as long as an employer has the contractual authority or the employee agrees to it, employers may layoff employees on a temporary basis. Normally, the time limit for a layoff to be “temporary”, according to the Act, is 13 weeks. After this, the employer must recall the employee or else trigger statutory termination obligations.
On June 25, in response to COVID-19, the B.C. Ministry of Labour extended the maximum allowable temporary layoff period to 24 weeks within a 28-week period ending on or before August 30, 2020.
However, many employers continue to grapple with the economic uncertainty presented by COVID-19 and are not in a position to recall employees even within this extended period. If these employers are unable to recall employees within the current allowable time, but have a reasonable plan in place to do so, they may be able to make an extension application.
An extension application is done via an application for variance under s. 73 of the Act. The B.C. government has introduced an online portal to streamline the process and allow employers to “Apply for a COVID-19 Temporary Layoff Variance”.
If applicable to their situation (i.e. employees who are non-unionized and non-excluded), employers should apply ASAP and in any case before the deadline of August 25, 2020, so that they can receive a decision by August 30, 2020 (the end-date of the existing maximum), allowing for processing time.
What do I need to apply?
Employers should have all information ready for the application, including:
• Details regarding the business (e.g. names. owners, partners, addresses, etc.)
• Number of employees affected
• Documented majority support of the employees affected in favour of the application
All affected employees should be notified of the application and a list of these employees should also be included with the application.
Canada Emergency Wage Subsidy (CEWS)
In April, the federal government unveiled the CEWS, a program intended to provide a subsidy to employers who have seen a drop in revenue due to COVID-19. The subsidy is meant to cover part of employee wages, retroactive to March 15, 2020.
The time periods are divided into 4-week increments:
• Periods 1 to 4: March 15 to July 4, 2020
• Periods 5 to 9: July 5 to November 21, 2020
On July 17, the government announced changes to CEWS which impact claim periods beginning July 5, 2020.
Employers can now claim a subsidy amount as long as there has been a drop in revenue, no matter how steep. However, the extent of the drop will affect the amount of subsidy that is provided. A CEWS calculation tool is available to help employers determine the amount for which they are eligible.
Employers whose revenue declined by 30% or more in July and August may still claim the maximum 75% subsidy (up to $847 per week per employee).
Canada Emergency Response Benefit (CERB)
Another temporary COVID-19 benefit, the CERB, provides $2,000 per 4-week period to eligible individuals. The program was extended for an additional 8 weeks and remains available to those who qualify, until September 26, 2020 (the end of the last eligibility period).
• Stopped working due to COVID-19 or eligible for Employment Insurance (“EI”) benefits or have used up EI benefits between December 29, 2019, and October 30, 2020; and
• Resident in Canada; and
• At least 15 years old; and
• Employed (including self-employed) with an income of $5,000 or more in 2019 or in the 12 months before application; and
• Have not quit their job voluntarily; and
• At the time of submitting their first claim did not earn more than $1,000 for 14 or more consecutive days in the 4-week benefit period of their claim.
If individuals are receiving CERB through Service Canada, they must submit an internet report every 2 weeks to continue receiving payments. If they are receiving CERB through the Canada Revenue Agency, they should apply again for another 4-week period, up to a maximum of 6 periods.
Today, August 20, 2020, the federal government announced that once the CERB program ends, the EI-eligible individuals on that program will be transitioned into a “simplified” EI program. For those on CERB who do not qualify for EI, a new workers’ benefit will pay $400 a week for up to 26 weeks. There will also be a $500 per week sickness or caregiving benefit for those who must stay home due to illness, or closure of schools or daycare. Finally, EI premiums will be frozen for the next two years.
We expect more details to be made available in the coming weeks.
Disclaimer: The legal ramifications of the global COVID-19 crisis are constantly changing. The information contained in this document is general only, may not apply to your specific situation, and is not intended to constitute legal advice. For tailored advice pertaining to your particular situation, please reach out to counsel.
Learn more at our COVID-19 Resource Centre.