This is the second bulletin in a weekly series that provides a recap of important COVID-19 developments and their impact on employers as they navigate these challenging times. This recap covers the week of March 30, 2020 and is current as of April 6, 2020.
During the week of March 30, 2020, the federal and provincial governments announced further details on and changes to important measures that will impact employers and employees during the COVID-19 pandemic, including the Canada Emergency Wage Subsidy and Temporary Wage Subsidy for Employers, a new shortened list of essential workplaces that are not subject to Ontario’s emergency order for non-essential workplaces to close, and further information regarding how to apply for the Canada Emergency Response Benefit. The details of these developments and their implications for employers are discussed below.
Further, although it is uncertain how long the measures addressing the spread of COVID-19 will remain in effect, government officials at various levels have begun hinting at or even stating outright that at least some of the measures currently in effect may need to continue through June 2020.
New Details on Wage Subsidies for Employers
On April 1, 2020 the government provided new details on the proposed Canada Emergency Wage Subsidy (“CEWS”), which is intended to limit the need for layoffs and to encourage employers to bring laid-off employees back to work. The government clarified that this new subsidy is in addition to the previously announced 10% Temporary Wage Subsidy (“TWS”), rather than a replacement for it. However, in practice, employers that are eligible for both subsidies can only receive a 75% wage subsidy overall, as any amounts received under the TWS will lead to a reduction of the amount that can be claimed under the CEWS.
The key details on the CEWS announced this week include:
- The CEWS would be provided for 12 weeks of wages, from March 15 to June 6;
- To be eligible, employers must have experienced a 30% reduction in gross revenue compared to 2019, calculated by comparing revenues from each month with the same month in 2019 (e.g., a 30% decline in March 2020 as compared to March 2019) using the employer’s normal accounting method;
- Employers would be required to reapply for the wage subsidy each claiming period, as follows:
Claiming period Reference period for eligibility
Period 1 March 15 – April 11 March 2020 over March 2019
Period 2 April 12 – May 9 April 2020 over April 2019
Period 3 May 10 – June 6 May 2020 over May 2019
- Employers would be required to attest that they are “doing everything that they can” to provide their employees with the remaining 25% of their wages, to receive the subsidy;
- Employers would be able to apply online through a Canada Revenue Agency online portal that will be available “soon”;
- Funds under the subsidy would be available in mid-May; and
- There would be “severe consequences” for anyone who abuses this subsidy or uses the money for fraudulent purposes.
For further information on the CEWS and how it relates to the TWS, including implications for employers that may be considering recalling employees from layoff, and those that qualify for both subsidies, please read our blog and take a look at the FAQ videos on our COVID-19 Resource Centre.
Ontario has Shortened the “Essential” Workplaces List
On April 3, 2020, the Ontario government announced that many workplaces that have been considered “essential” for the purposes of the provinces’ emergency order will now be required to close their physical locations during the COVID-19 pandemic, effective April 5, 2020.
Categories of essential businesses that were broad before have been significantly narrowed, including, for example, construction, which largely has been limited to critical infrastructure and healthcare-related work, and “industrial maintenance services” which has been narrowed to those workplaces that are “strictly necessary”. Additionally, various retailers and wholesalers that were previously included on the essential workplaces list are now restricted to “alternative methods of sale” (e.g., curb-side pickup or delivery).
For more information about the changes to the list of essential services, please see our blog.
In concert with this reduction, the government of Ontario has taken down the web form that was available for businesses to use if they wished to be added to the essential workplaces list.
The government has stated many times that the measures being implemented to combat the spread of COVID-19 are evolving as new information becomes available. As such, further changes to the essential workplaces list are possible in the coming weeks and months. Employers would be well advised to proactively develop contingency plans to help smooth the transition if they are required to close their physical locations (such as implementing work from home measures, or preparing for layoffs where necessary).
If you require advice or assistance in determining whether your workplace is “essential”, or understanding your organization’s legal and strategic risks and options as a result of the shutdown, please contact a member of our team.
CERB Application Details Released
The government has confirmed that it started accepting applications for the Canada Emergency Response Benefit (“CERB”) on April 6, 2020, and that 3.8 million applications were received as of this afternoon. Eligible workers will receive $500 a week for up to 16 weeks. The CERB will be available to workers who:
- reside in Canada;
- are at least 15 years old at the time of application;
- have stopped working because of COVID-19 (and have not voluntarily quit their job) or are eligible for EI regular or sickness benefits;
- had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
- are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. (For subsequent benefit periods, eligible applicants must expect to have no employment income.)
Workers can apply for the CERB online or by phone. Given the large number of applications expected, the CRA has set up specific days for workers to apply based on their birth month, as follows:
|Employees born in the month of||Apply for CERB on||Earliest day to apply|
|January, February or March||Mondays||April 6|
|April, May, or June||Tuesdays||April 7|
|July, August, or September||Wednesdays||April 8|
|October, November, or December||Thursdays||April 9|
|Any month||Fridays, Saturdays and Sundays|
There is no waiting period for the CERB, and applicants will start receiving payments within 10 days of applying, or within three to five business days if they set up direct deposit. Benefits will be retroactive to the applicant’s eligibility date.
The federal government has announced that it is considering how to extend eligibility for the CERB to additional employees who currently do not qualify, such as those working reduced hours (e.g., contract workers, gig workers, etc.), and those who are working but earning less than they would receive if they were collecting the CERB (e.g., home care workers).
Now that the eligibility requirements are clearer, employers can more accurately consider what employees would be entitled to in the event of a disruption to their employment as a result of COVID-19 (including a leave or a layoff). Though employers may be getting many questions from employees about their eligibility for the CERB, employers would be well advised to direct employees to the government’s website and not make any definitive statements about whether the employee will qualify.
This blog is provided as an information service and summary of workplace legal issues. This information is not intended as legal advice.