Work-Sharing Program: An Option for Employers during COVID-19

Mar 28, 2020 | HR Compliance

Businesses across Canada are feeling the impact of COVID-19. Regardless of size or industry, employers are having to mitigate the economic downturn in their businesses.

 

“What are my options?” This is a key question for employers as they look at options to not only keep their operations running, but also keep their people employed. One option that employers are looking into is the Work-Sharing Program.

 

What is the Work-Sharing Program?

 

 

The Work-Sharing Program is offered through Service Canada for federally and provincially regulated companies and is an alternative to layoffs during a temporary decrease of at least 10% in business sales and production that is beyond the control of the employer. The program is an agreement between the employer, employees and Service Canada where the employer can reduce work hours between 10% to 60% and share the available work within the group, who must agree to the reduced schedule of work. The program provides “income support to employees eligible for Employment Insurance benefits who work a temporarily reduced work week while their employer recovers.”

Source: https://www.canada.ca/content/dam/canada/employment-social-development/migration/documents/assets/portfolio/docs/en/work_sharing/Work_sharing_applicant_guide.pdf

 

Ultimately, the Work-Sharing Program is an option to allow employers to:

  • Keep their staff employed
  • Pay employees for hours worked
  • Help supplement employees reduced wages for the days they are not working

 

How does the income support payment work on the Work-Sharing Program?

 

Below is an example.

 

Employee: John Smith

Hourly Rate: $15.00

Normal Workweek: 40 hours per week (5 days per week)

Normal Pay: $15.00 x 40 hours = $600.00 per week

 

If the company is now reducing John’s workweek to a 4-day workweek (8 hours per day – a 20% reduction), the pay would be:

  • $15.00 x 32 hours = $480.00 paid by the employer
  • $120 (lost day) x 55% EI rate to daily maximum = $66.00 paid through EI
  • Total: $546.00 for work sharing week

 

For a further example on payments, visit: Work-Sharing Benefits

 

Who is eligible for the Work-Sharing Program?               

 

For employers to be eligible for the Work-Sharing program, some (not an exhaustive list) of the criteria include:

  • Be a private business, publicly-held company or not-for-profit organization
  • Be in business in Canada year-round for a minimum of two years
  • Prove that there has been a shortage of work and decrease in business activity of at least 10%, which is beyond their control

 

For employees to be eligible for the Work-Sharing program, some (not an exhaustive list) of the criteria include:

  • Must be core employees – year-round permanent full-time or part-time employees who are integral to the everyday functions of the business
  • Be eligible for Employment Insurance benefits
  • Agree to a reduction in their normal working hours in order to share the available work within the working sharing unit
    • Working sharing unit is defined as a group of core employees who have agreed to partake in the work-sharing program to reduce their normal workweek/schedule and equally share the work amongst all members within the unit.

 

What are the amendments to the Work-Sharing Program?

 

As a result of COVID-19, the Government of Canada has put in place some changes and temporary measures to help employers during this time of COVID-19.

  • There is an extension to the duration of the Work-Sharing agreements by an additional 38 weeks, for a total of 76 weeks.
  • The mandatory waiting period between agreements has been waived.
  • There is an ease on the recovery plan requirements.

 

Note that for new applications, Service Canada has further streamlined their process and employers can expect a turnaround time of 10 days, rather than 30 days.

 

Where do I find information on the Work-Sharing Program?

 

To review the temporary measures put in place for the Work-Sharing Program due to COVID-19, visit: Work-Sharing Temporary Measures

 

To view the ‘Applicant Guide’ with details on eligibility and the application process, visit: Work-Sharing Applicant Guide

 

To complete the application form, visit: Work-Sharing Application Form

 

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice regarding any specific legal issues. 

 


 

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