On Apr. 11, 2020, Bill C-14, the COVID-19 Emergency Response Act, No. 2 received Royal Assent. It enacts the new Canada Emergency Wage Subsidy to help employers retain workers or return them to their payroll despite the challenges posed by the COVID-19 pandemic.
Many Canadian employers are still searching for clarity to questions regarding eligibility, compliance, and the duration of the subsidy. Here, I answer ten frequently asked questions about the Canada Emergency Wage Subsidy (CEWS).
1. Are non-profit organizations and registered charities considered eligible employers for purposes of the CEWS?
2. If an eligible employer qualifies for the first period of Mar. 15-Apr. 11 (i.e. 15% reduction in eligible revenue) does the employer automatically qualify for the second period of Apr. 12-May 9 (i.e. 30% reduction in eligible revenue) regardless of the actual reduction in eligible revenue for this second period?
Yes. The intent is to permit an eligible employer to better plan for its requirements.
3. If an eligible employer does not qualify for the first period of Mar. 15-Apr. 11, can the employer subsequently qualify for the second period (Apr. 12-May 9) or the third period (May 10-Jun. 6)?
Yes. In fact, if the eligible employer qualifies for the second period, the employer will automatically qualify for the third period.
4. Does the CEWS apply to part-time employees?
Yes, subject to the condition that applies to all employees that the individual must not have been without remuneration from the employer for a period of 14 or more consecutive days in the applicable period (i.e. second period of Apr. 12- May 9).
5. If an eligible employer has not laid off staff and continues to pay staff their full wages, would this employer qualify for the CEWS?
Yes. The intent of the CEWS is to assist eligible employers with maintaining their staff on payroll or bringing them back if they are on layoff.
6. Is it acceptable for an eligible employer to recall employees from layoff to take advantage of the CEWS, if it has no work for these employees?
Yes. The intent of the CEWS is to permit eligible employers to bring employees back from layoff and put them on payroll to permit a more efficient ramp up at the appropriate time.
7. Can an eligible employer elect not to call back all its employees from layoff?
The CEWS does not require employers to recall all its employees on layoff as a condition of eligibility for the CEWS. It is important to note, however, the payments under the CEWS will not be available in respect of those employees without remuneration for 14 or more consecutive days during a qualifying period.
8. Can an eligible employer claim reimbursement as part of the CEWS for its contributions to EI and CPP?
Yes, employers can claim a 100% refund for the employer paid part of contributions made on behalf of eligible employees (CPP, EI, QPP and QPIP) who are on leave with pay. In other words, not performing any work during that time.
9. What is the duration of the CEWS?
The CEWS is available for 12 weeks from Mar. 15 to Jun. 6, 2020, with the possible extension by regulation to no later than Sept. 30, 2020.
10. When and where can an employer apply?
Beginning Apr. 27, applications will be open for the CEWS. Most employers will apply using their My Business Account. Alternatively, employers can apply using a separate online application form.
Learn more about key legal and HR considerations for Canadian employers related to COVID-19. Watch our recent webinars.
Stuart Ducoffe (B.C.L., LL.B.,CHRL) is a seasoned employment and labour lawyer and Canadian Human Resources leader as well as the co-founder of e2r®, which powers Ceridian’s HR Advisory Services. He is also a partner and co-founder of Woolgar VanWiechen Cosgriffe Ducoffe LLP and leads the firm's employment and labour law practice. Follow e2r® on Twitter and Instagram to stay up to date on Stuart and his team!View Collection