March 27, 2020 COVID-19 In Depth Explanations

Employer Supplements to EI Via SUB Plans
Keeping Staff Employed Part-Time Via the EI Work-Sharing Program
How Does the New Canada Emergency Response Benefit Fit In


As the COVID-19 situation in Canada and around the world continues to develop rapidly, we continue to provide updates to employers. Some topics though warrant more depth than a quick news update. This article addresses the ability for employers to top up Employment Insurance (“EI”) benefits through EI Supplementary Unemployment Benefit (“SUB”) Plans. We also address the potential that employers can keep employees at least partially employed by having them share available work and receive EI benefits, via the EI Work-Sharing Program. Further, to the extent we can currently do so, it touches briefly on how the new Canada Emergency Respond Benefit (“CERB”) appears to fit in with these programs.

This information is current as of publication but as with all matters associated with COVID-19 the situation can evolve rapidly. We will continue to provide information as it becomes available. We are available to answer any specific questions you may have.


A Few EI Basics

EI is a Federal Government program that provides financial assistance to qualifying employees who lose employment income for various reasons. To be eligible the employees must have sufficient hours of insurable employment in the last year. Persons who are self-employed do not qualify for EI unless they have registered to participate and pay EI premiums. The number of hours of insurable employment required to qualify for EI currently varies by region.

There are various types of EI benefits. The most commonly accessed benefits available across Canada in ordinary times are:

EI benefits do not fully replace lost salary. Instead they will typically pay 55% of the salary, up to a cap, which is currently based on an annual salary of $54,240. As such EI benefits will pay no more than $573 per week.

The length of time that the employee may receive EI benefits varies with the type of EI leave. Sick leave is up to 15 weeks. Regular benefits are typically between 14 and 45 weeks depending on local unemployment rates and the number of insurable hours of work the employee has worked.

Normally there is a one week waiting period before employees will qualify for benefits. In light of COVID-19 that one week waiting period has been waived for EI Sick Benefit claims. It has not yet been waived for Regular EI benefit claims. There is potential it may be waived, under new powers given to the Minister of Employment and Economic Development (the “Minister”) under the Covid-19 Emergency Response Act enacted on March 25, 2020.

Payments by employers to employees when they stop working (such as vacation payouts) will typically delay their eligibility for EI benefits. If an employee who has started receiving EI receives other employment earnings while in receipt of EI benefits those payments will result in a reduction in their EI benefits, unless there is an EI SUB Plan in place, or the pay is for part-time work as part of an EI Work-Sharing program.

Other than when receiving top-up payments from their employer under a SUB Plan, or pay for work under a Work-Sharing program, rules around reductions in EI payments for further employment earnings when “Working While on Claim” ( typically let the employee keep 50% of every additional dollar earned, up to 90% of their previous earnings. Above that cap, EI benefits are deducted dollar for dollar. The 90% cap combined with the week by week approach taken to EI claims means employees who work a full work week will not receive any EI benefits that week.

EI SUB Plans

Employers can top up employees’ EI benefits provided they have in place a proper EI SUB Plan (

Those top-up payments are not deducted from the employee’s EI benefits. However, SUB Plans must comply with a number of requirements.

Most significantly, at present employers can only top up EI sick benefits or regular benefits if their SUB Plan has been registered with Service Canada. SUB Plans for Caregiving Benefits or Maternity/Parental Benefits do not need to be registered, but will be of very limited assistance to employers looking for tools to support employees who suffer loss of work and income as a result of COVID-19. Unless and until the requirement for registration of SUB Plans for EI Sick Benefits and Regular EI Benefits are altered, any top-up payments by an employer to an employee on Regular Benefits or Sick Benefits before the employer’s SUB Plan has been registered will reduce the employee’s EI benefits. The Minister now has the power to change the current requirement for registration.

Current basic requirements for SUB Plans, apart from registration, include (but are not limited to):

  • identify the group of employees covered and the duration of the plan 
  • cover periods of unemployment caused by temporary stoppage of work, training, illness, injury or quarantine 
  • provide that employees must apply for and be in receipt of EI benefits to receive top-ups from the employer 
  • provide that the combined weekly payments from the plan and the EI weekly benefit cannot exceed 95% of the employee’s normal weekly earnings 
  • provide that the top ups must be entirely financed by the employer

The Plan must include a complete description of the benefits to be provided but need not be in a specific form. A plan document can be set up by any signed commitment by the employer that meets all the requirements. Service Canada provides a sample plan which makes it relatively easy for employers to prepare a plan:

Currently, to register the plan with Service Canada the employer’s plan, together with a SUB Plan Registration Form plan must be submitted by mail or fax to:

Service Canada - Supplemental Unemployment Benefit (SUB) Program
120 Harbourview Boulevard
P.O. Box 11,000
Bathurst, New Brunswick
E2A 4T5
Telephone: 1 800 561-7923
Fax: (506) 548-7473

Key decision points for employers who are contemplating setting up a SUB Plan include:

  • Which group or groups of employees will be covered by the plan. An employer may apply to have different SUB Plans for different groups of employees. 
  • What kinds of unemployment will be covered? Just sickness? Just temporary stoppage of work? Training? Some combination of those? 
  • Will the plan pay during the employee’s one-week EI waiting period (assuming the waiting period continues to apply) and if so at what rate? 
  • What will the plan pay? There are options:
    a) A fixed percentage of the employee’s normal weekly earnings equal to 40% or less so as not to exceed the 95% cap; this will equate to a fixed dollar amount per week of top-up.
    b) An amount such that the employee’s gross EI benefit from that employment, plus the top-up will equal a specific percentage of the employee’s normal weekly earnings, and if so at what percentage (again the total of the two cannot exceed 95%).
    c) An amount that takes into account not just the employee’s gross EI benefit from that employment but also other earnings for working while on claim so that the total, including the top-up, will equal a certain percentage of the employee’s normal weekly earnings. 
  • What is the maximum number of weeks the top-up will be payable? 
  • How will the plan be financed? It must be financed by the employer. While options can include payments from general revenue, paying 100% of insurance premiums for a policy to fund the plan, or by making deposits to a trust fund established to provide the payments, it is likely that to quickly establish a SUB Plan to address COVID-19 that providing for payments from general revenue is the only viable option. 
  • What are the start and end dates of the plan? Barring changes by the Minister, approval for the plan must be received before the start date.

Once a plan is established, before the employer makes any top-up payments they must complete a Record of Employment (“ROE”) for the employees who will receive top-ups, showing the employee is entitled to receive SUB Plan payments by entering SUB plan benefit information in the “other monies” section of the ROE form. Employers must also verify the employee is in receipt of EI benefits and their weekly benefit rate before making payments. Mechanisms for doing that are referenced in the Service Canada guide:

Given the very recent passage of the Covid-19 Emergency Response Act, and the powers it gives the Minister to modify EI requirements, the requirements for SUB Plans may be expected to change. Ensure you check for the most current requirement before submitting any proposed SUB Plan for registration.


Federal Work-Sharing Program

Many employers are not familiar with the EI Work-Sharing (“WS”) Program. This resource may be available to assist you in keeping your employees employed to some degree, while they receive EI benefits during the COVID-19 crisis. Below we outline the WS Program basics and provide links to help you navigate the application process.

The Federal Government has already implemented certain temporary special measures to the WS program in response to the COVID-19 crisis. The current special measures are outlined at the end of this update. With the recent passage of the Covid-19 Emergency Response Act and the new power given to the Minister to change EI plans these provisions may be changed to create further efficiencies.

What is Work Sharing?

Work-Sharing is a federal program, available to federal and provincial employers and employees, that is designed to help avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer.

The program provides income support to employees eligible for Regular EI benefits who work a temporarily reduced work week while their employer recovers. Under the WS Program, an employee’s EI WS benefits will not be deducted from their earnings.

Who is Eligible?

To be eligible for a WS agreement, employers must:

  • Have been in business in Canada year-round for at least two years; 
  • Be a private business, a publicly-held company, or a not-for-profit organization; 
  • Demonstrate that the shortage of work is temporary and beyond their control, and is not a cyclical/recurring slowdown; 
  • Demonstrate a recent decrease in business activity of approximately 10%; and,
  • Submit and implement a recovery plan designed to return the WS unit(s) to normal working hours by the end of the WS agreement. There must be a reasonable expectation that recovery will be achieved by the end of the agreement.

Employees being proposed for a WS agreement must:

  • Be "core employees" (that is, year-round permanent full-time or part-time employees who are required to carry out the everyday functions of normal business activity); 
  • Be eligible to receive EI benefits; 
  • Agree to a reduction of their normal working hours in order to share the available work; 
  • Temporary (that is, term or contract) employees are only eligible if they are not employed on a seasonal basis and if they have maintained hours similar to permanent full-time or part-time employees within the last 12 months; 
  • Core employees who were laid off prior to the agreement start date are eligible to participate; 
  • A minimum of two employees is required for a WS agreement.

Certain key employees are not eligible to participate. In general, those needed to generate work or essential to recovery such as senior management and executive level marketing/sales staff are not eligible.

What is a Work-Sharing Unit?

A WS unit is a group of core employees who have agreed to participate in the WS program and to reduce their normal working hours. A WS agreement may include more than one WS unit.

The unit generally includes all employees in a single job description or all employees who perform similar work. Employees who do different work but whose jobs impact one another (that is, slowdown in business affects one job resulting in less work for another) may form one WS unit provided that all employees can reduce their hours equally.

What does it mean to Equal Work Share?

All members of a WS unit must agree to reduce their normal work hours and to share the available work. If, during the period of the WS agreement, work activity increases, the additional hours of work must be shared equally among all members of the unit.

What is a Work-Sharing Unit Representative?

The members of each WS unit must authorize an employee who will represent them in the agreement. Normally, the employee representative will be a member of the WS unit. In a unionized workplace the authorized employee representative may be a member of, and designated by the union. The employee/union representative acts as the delegate and voice for all employees in a WS unit. The employee representative works with the employer in the WS application process and is responsible for communicating the needs and relaying any issues or concerns of the WS participants to the employer.

What Constitutes a Shortage of work?

To be eligible for the WS program, there must be a recent decrease of approximately 10% (or more) of a company's business activity. In other words, employers must demonstrate a decrease of approximately 10% in sales or production levels within the last six months. The specifics of what employers are required to submit to show they meet this criterion are found in the links below.

How Long can a Work-Share Agreement Last?

Under the standard rules, WS agreements must have a minimum duration of 6 weeks and a maximum duration of 26 weeks with a possible extension of up to 12 weeks (Total 38). In response to the COVID-19 crisis, the maximum duration is now 76 weeks.

What happens to Employee benefits?

All existing employee benefits must be maintained for the duration of the WS agreement. Any statutory holidays occurring within a Work-Sharing period are not compensated by EI benefits and are the responsibility of the employer.

Work-Sharing Applications under the COVID-19 Temporary Special Measures

In response to the COVID-19 pandemic the Federal Government has implemented temporary special measures that:

  • Extend the WS agreements by an additional 38 weeks to 76 weeks;
  • Waive the mandatory waiting period between agreements; and, 
  • Ease the recovery plan requirements.

It is important to note that as of this update, the 30 day waiting period for initial applications has not yet been waived or shortened. Therefore, it appears applications must still be submitted at least 30 days in advance of the WS agreement taking effect. However, the special provisions related to COVID-19 do reference WS Agreements signed between March 15, 2020 and March 13, 2021, so we expect there is an intent to expedite approvals. That said, given the surge in demand, employers should not be surprised to see lengthy waiting periods before approval is granted.

The temporary special measures are effective March 15, 2020 to March 14, 2021. Under these special measures you are eligible to apply if you are experiencing a downturn in business activity related to the global outbreak of COVID-19, and have:

  • WS agreements signed between March 15, 2020 and March 13, 2021 
  • WS agreements that began, or ended between March 15, 2020 and March 14, 2021, and 
  • WS agreements that ended between June 23, 2019, and March 14, 2020 and are in their mandatory cooling-off period

Under current provisions, if you are applying for a new WS agreement you must submit the following documents:

If you currently have a 38-week agreement in place, and are applying for the 38-week extension, you must submit the following documents:

You can refer to the WS Applicant guide for the temporary special measures for more information on how to complete your application.

How does the new CERB Impact these Programs?

As mentioned in previous updates, the Federal Government very recently announced that it would be combining the previously announced Emergency Support Benefit and Emergency Care Benefit into one simplified Canada Emergency Response Benefit (“CERB”). According to the Federal Government’s announcement, the CERB will be valued at $2,000 per month for four months. It is approximately the same amount as maximum EI benefits.

The benefit is primarily designed to support Canadians who are not eligible for EI but have ceased working due to COVID-19. However, the Federal Government has indicated that all Canadians who have ceased working due to COVID-19, whether EI-eligible or not, would be able to receive CERB. The Federal Government says this is because the EI system was not designed to process the unprecedented high volume of applications received in the past week. For context, the government has said that over 900,000 applications were received last week alone, compared to last year’s 27,000 applications over the same week. The CERB will be administered through the CRA, which already has the capacity to process millions of applications and payments in a short timeframe.

Specific details about the interplay between EI and CERB have not yet been announced. However, the Federal Government has said that Canadians who are already receiving EI regular and sickness benefits will continue to receive their EI benefits and should not apply to the CERB. Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply. It appears that the Federal Government is working on plans to shift existing but unprocessed EI applications through to the CERB system. EI-eligible Canadians would still be able to access their EI benefits if still unemployed after the 16-week period covered by the CERB.

EI is usually processed through Service Canada. The introduction of the CERB and the fact that CRA will be administering it may raise issues for EI Sub Plans and EI Work-Sharing. It is currently uncertain if an approved SUB plan will also apply to permit employers to provide additional payments that top up employee’s CERB benefits. However, given the obvious benefit of allowing employers to provide top-ups to employees who are without a regular employment income, we are hopeful this will be permitted. We expect some clarity on that point shortly. However, at this point there is a risk that if an employer provides top-ups to employees without a Government approved plan permitting them to do so, the result could potentially be that the employee may not qualify for CERB benefits. However, for employers who wish to provide top-ups it may be beneficial to apply for a SUB Plan now to avoid delays.

Similarly there appears to be broad benefit to encouraging employers who might be able to provide some continuing work for employees to do so by permitting the Work-Sharing program to apply to CERB benefits. Again, we hope for more information on this soon. In the interim this program also requires Government approval and it may be beneficial for employers interested in implementing such plans to apply now to avoid delays.

As with so many things related to COVID -19, the situation both legally and practically is evolving rapidly. While every effort was made to ensure this article was correct and current when written, please be sure to check for the most up to date information on the various programs if you are considering applying. We can assist in that if you wish. Do not hesitate to contact our team if you have specific questions about your workplace.