Layoff and EI Benefits FAQ for COVID-19

Payroll Management

Question: Is a doctor’s note required to access EI Sickness Benefits?

Answer: Typically, a signed medical certificate is required to accessEI benefits. However, as  of March 15, 2020, a medical certificate is no longer necessary for individuals required to go

into quarantine by a public-health official or by law.These workers only need to declare that they have been placed in quarantine to access sickness benefits.

On March 18, 2020, the Government of Canada announced that the requirement to provide a medical note for all claimants who apply for sickness benefits will be waived. This measure is not in place.

Question:Can an Employer top up an employee’s Sick Benefits?

Answer: Yes, an employer can register a Supplementary Unemployment Benefit Plan (SUBP)with Service Canada to top up an employee’sEI benefits during a period of unemployment due to a temporary layoff and/or sickness.

SUB plans must be registered before their effective date and must meet the requirements set out in subsection 37(2) of the EI Regulations. They must:

•      Identify the group of employees covered and the duration of the plan

•      Cover a period of unemployment caused by one, or a combination of, the following:

- Temporary stoppage of work,

- Training,

-  Illness, injury or quarantine

•      Require employees to apply for and be in receipt of EI benefits in order to receive payments under the plan

•      Require that the combined weekly payments from the plan and the portion of the EI weekly benefit rate does not exceed 95 per cent of the employee’s normal weekly earnings

•      Require it to be entirely financed by the employer

•      Require that, on termination, all remaining assets of the plan will be reverted to the employer or be used for payments under the plan or for its administrative costs

•      Require that that the plan be submitted to the Commission prior to its effective date and that written notice of any change to the plan be given to Service Canada within 30 days after the effective date of the change

•      Provide that employees have no vested right to payments under the plan except during a period of unemployment specified in the plan

•      Provide that payments in respect of guaranteed annual remuneration, deferred remuneration or severance pay will not be reduced or increased by payments received under the plan

If all the conditions are met, the plan will be registered under the employer’s business number and a notification of the approval will be provided to the employer. Any amounts paid prior to the plan being registered will be treated as earnings and may be deducted from the employee’s EI benefits.

Question: As a result of COVID-19, schools are closed and employees may place their children in a daycare, where such service is still operational. If employees are provided with an allowance to cover the daycare expenses, is this allowance considered a taxable benefit? 

Answer: The daycare allowance paid by the employer is a personal allowance and therefore taxable and subject to the Canada Pension Plan(CPP), Employment Insurance (EI) and income tax. The allowance would be reported on Box 14 and Code 40 of the T4. For Revenue Quebec purposes the amount would be subject to the QuebecPension Plan (QPP), the Quebec Parental Insurance Plan (QPIP), and Quebec Provincial Tax and would be reported in Boxes A and L of the RL-1.

Question: We are continuing to pay employees who cannot return home from another country or who are in self-isolation. Are their earnings and hours considered taxable and insurable?

Answer: If the employer maintains the employee’s salary, the payment is treated as a salary continuance which is subject to all statutory withholdings: C/QPP, EI, QPIP as well as federal and provincial income taxes. The hours and earnings are considered insurable.

Question:An employee is caring for a family member who has tested positive for COVID-19. Should the employee apply for EI benefits under compassionate care leave?

Answer: An employee can apply withService Canada for Family Caregiver or Compassionate Care EI benefits and maybe eligible for those benefits if they meet all entitlement conditions. As a caregiver, you don’t have to be related to or live with the person you care for or support, but they must consider you to be like family.

Family caregiver benefits provide:

•      Up to 35 weeks for taking care of a critically ill or injured person under 18

•      Up to 15 weeks for a critically injured person 18 or over

•      Compassionate care benefits provide up to 26 weeks, for a person of any age who requires end-of-lifecare.

To receive the Family caregiver benefit for adults or children, the caregiving recipient’s life must be at risk as a result of illness or injury and there must have been a significant change in their baseline state of health.

To receive the compassionate care benefit, the caregiving recipient must have a serious medical condition and be at significant risk of death within 26 weeks.

An employee can receive benefits during the 52weeks following the date the person is certified by a medical doctor or nurse practitioner to be critically ill or injured or in need of end-of-life care. You can take the weeks of leave within this timeframe either all at once or in separate periods. The weeks of leave can be shared by eligible caregivers, either at the same time or one after another.

Question:Are there any special measures related to the work sharing program?

Answer: The Government of Canada has put in place temporary special Work-Sharing (WS) measures for employers affected by the downturn and to support employers and workers affected by COVID-19.

These measures extend the duration of Work-Sharing agreements by an additional 38 weeks — for a total of 76 weeks. The mandatory waiting period has also been waived so that employers with a recently expired agreement may immediately apply for a new agreement, without waiting between applications and easeRecovery Plan requirements for the duration of the WS agreement.

Question: Are all affected employees entitled to EI benefits?

Answer: If an employee is directly affected by COVID-19(that is, they are sick or in quarantine) and is requesting EI sickness benefits, they can contact the Employment Insurance special campaign line at1-833-381-2725. This campaign is exclusively dedicated to enquiries from clients who are directly affected by theCOVID-19. The Commission will determine the EI benefit entitlement.

Question: What about employees that can’t work due to businesses being closed for COVID-19 safety?

Answer: If the employer chooses to close the business for COVID-19 safety reasons, this will be treated as a layoff.  An ROE must be issued using Code “A” Shortage of Work – Layoff.

Question: If the business is closing due to COVID-19, do we have to pay employees a notice period and do they have to follow required layoff notice before termination?

Answer: There is no requirement to pay notice pay when there is a temporary layoff. Each jurisdiction has legislation that limits the length of time a layoff can be in place before it is considered a permanent ending of employment by the employer. The labour and employment standards of most jurisdictions distinguish between layoff and termination of employment.

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