This afternoon, the Ontario government announced further measures to reduce contact between people and limit the spread of Covid-19. Of particular importance to employers is the issuance of a new 14-day closure order, and the narrowing of the list of essential workplaces. The new closure order is effective as of 11:59 pm on Saturday April 4, 2020, and all businesses that are not on the new list must shuttered by that time.
The new list is found here.
As was the case with the previous list, the closure order does not prevent a non-essential business from operating online, by telephone or by mail/delivery, or from operating if its employees can work remotely. It also does not preclude the operation or delivery of services of any publicly-funded agency or organization that delivers or supports government operations and services, including operations and services of the health care sector.
Nevertheless, as a result of the narrowing of the list, new businesses will need to make decisions about how to deal with employees that can no longer work because there is no practical way to maintain operations with the physical business being closed. Here is a summary of some of the supports available (more information on all of these supports can be found in our previous email blasts, attached).
EMPLOYER SUPPORTS – WAGE SUBSIDIES
For employers that are financially able to fully support their employees during the closure period (or part of the closure period), one possibility is to maintain employees’ pay even though the employees cannot work during the closure period. For these employers, there are two potential wage subsidies available:
- The Temporary Wage Subsidy For Employers (TWSE)
The TWSE permits employers to reduce payroll remittances to the CRA on account of federal and provincial income taxes. It can be applied to remuneration paid to employees between March 18, 2020 and June 19, 2020. The amount of the subsidy is 10% of the remuneration paid to employees from March 18, 2020 to June 19, 2020, with a maximum subsidy of $1,375 for each employee or $25,000 per employer over the 3-month period.
- The Canada Emergency Wage Subsidy (CEWS)
The CEWS is available for businesses that experience at least a 30% drop in gross revenues in relation to three eligibility periods (March 15 – April 11, April 12 – May 9, and May 10 – June 6). The subsidy is based on eligible remuneration paid to employees during these periods time and can cover:
(a) 75% of remuneration paid, up to a maximum of $847 per week;
(b) The lesser of either:
(i) remuneration paid, up to a maximum of $847 per week;
(ii) 75% of the employee’s “pre-crisis” weekly remuneration.
Complete details of the CEWS have yet to be released.
If unable to work because of the expanded closure order, employees will be eligible for a job-protected Declared Emergency Leave. In other cases, businesses may be indirectly affected by the expanded closure order despite themselves being “essential” and may need to consider temporary layoffs. For employees who are unable to work, the Canada Emergency Response Benefit and Employment Insurance are available as options for income support during the period of leave or temporary layoff:
- Canada Emergency Response Benefit (CERB)
The CERB is available to a broader range of individuals than Employment Insurance Benefits (e.g. self-employed individuals). To qualify, the individual must have:
- earned at least $5,000 in employment income, self-employment income, or maternity or parental leave benefits for 2019 or in the 12-month period preceding the day they make the application; and
- stopped working for reasons related to Covid-19 for at least 14 consecutive days within the 4-week period for which they initially apply. (The reasons can be personal sickness or quarantine, sickness of a family member who requires care, parents who must stay home without pay to care for children not in school/daycare because these have been shut down, employees who have no income due to the Covid-19 slowdown but who haven’t yet been laid off); and
- not received any income, any EI benefits, or any maternity/paternity/parental benefits within those 14 consecutive days.
The application portal for the Canada Emergency Response Benefit is scheduled to open Monday, April 6, 2020. The benefit pays for a maximum of 16 weeks and provides a benefit amount of $500 per week. CERB payments are expected to be delivered within 10 days after the application is submitted. Employees apply for the CERB through the Canada Revenue Agency (CRA) online or by phone. To manage the application process, the CRA has asked applicants to apply based on their birth month, as follows:
|Birth Months||Apply for CERB on|
|January, February or March||Mondays (best day: April 6)|
|April, May, or June||Tuesdays (best day: April 7)|
|July, August, or September||Wednesdays (best day: April 8)|
|October, November, or December||Thursdays (best day: April 9)|
|Any month||Fridays, Saturdays or Sundays|
- Employment Insurance
Employees can still submit applications for Employment Insurance Benefits. Employees taking a Declared Emergency Leave under the ESA may qualify for the one-week waiting period to be waived. Although the processing period is expected to be longer, EI may be a preferable option for some employees, particularly if the employer has registered a Supplemental Unemployment Benefit (SUB) Plan with the Federal Government, which allows an employer to supplement an employee’s EI benefits to a maximum of 95% of the employee’s normal weekly earnings. For those considering a SUB Plan, the time taken to register has significantly decreased, and we have heard of plans being submitted on a Friday and approved the following Monday.
More information from the Federal Government on SUB plans can be found here.
The Labour & Employment Team at Cunningham Swan