The following are some of the more popular questions the Canadian Payroll Association received through their Payroll InfoLine™ during the COVID-19 pandemic.
Many of our employees were laid off in April at the start of the pandemic and Records of Employment (ROEs) were issued. We have gradually recalled some employees, but others will remain on layoff until we have enough work for them. With the Canada Emergency Response Benefit (CERB) coming to an end, the latter employees have been contacting us asking about a new ROE to allow them to transition to Employment Insurance (EI) benefits. These employees have not returned to work since the original ROEs were issued and no additional monies have been paid. Do we need to issue new ROEs or amend the ones previously issued?
An ROE must be issued when there is an interruption of earnings, which is generally considered to have occurred when:
- An employee has had or is anticipated to have seven consecutive calendar days with no work and no insurable earnings from the employer; OR
- An employee’s salary falls below 60 per cent of regular weekly earnings because of illness, injury, quarantine, pregnancy, the need to care for a newborn or a child placed for the purposes of adoption, or the need to provide care or support to a family member who is critically ill.
The ROEs you issued in April, when the employees stopped working, were issued in accordance with these rules. An amended ROE is only required if:
- There was an error on the original ROE that needs to be corrected;
- Additional monies are paid to the employee; or
- Service Canada requests an employer amend the form.
If your employees have not returned to active employment and no additional monies have been paid, there is no requirement to issue new ROEs or amend the previous ROEs. If an employee applies for EI benefits, Service Canada will use the information from the previous ROE to determine eligibility for benefits. If ROEs were submitted electronically, you can advise your employees to set up a My Service Canada Account, which will allow them to log in and see their ROEs online.
My organization has a registered Supplemental Unemployment Benefit (SUB) plan. Our employees on layoff are receiving the CERB, so we have not processed a top-up to ensure the CERB is not clawed back. We would like to retroactively pay a top-up benefit at a later date, once the CERB payments end. Is this allowable or because the top-up relates to a period during which the employee was receiving the CERB, could there be a potential claw back of the CERB?
Employers cannot simply delay SUB payments to avoid reducing other benefits. As it would still be issued for the period the claimant received the CERB, it would be considered in determining eligibility for the CERB for that period.
Given the simplified design of the CERB, the provisions that exist under the EI system for employers to make additional payments to workers through SUB plans do not apply to employees who are receiving the CERB. However, eligible individuals collecting the CERB and receiving $2,000 for a four-week period may earn up to $1,000 in employment and/or self-employment income in each of their benefit periods from March 15, 2020, to October 3, 2020, while continuing to receive the CERB.
Employers who wish to increase their employees’ weekly earnings while they are unemployed have the flexibility to supplement CERB benefits up to this amount in place of a SUB plan. However, individuals who receive income from employment, including top-ups, that exceeds $1,000 in each four-week period they received the CERB would have to repay the CERB amounts they received for the same benefit period.
Where the employer is allowed to choose baseline periods for the Canada Emergency Wage Subsidy (CEWS), does the employer have to use the same baseline period for all employees in the claim period or can the employer look at each employee and pick the baseline period that is most beneficial for them?
When an employer makes a CEWS claim that includes multiple employees in the same claim period, the employer can choose which period to use for the calculation of baseline remuneration on an employee-by-employee basis.
For example, an employer has three employees (Alice, Benjamin and Clara) on a claim for Period 5. Alice has worked steadily at the company for several years, Benjamin started in January 2020 and Clara worked for most of 2019 but was on leave from January to May 2020.
When calculating the overall CEWS claim, the employer could use a different baseline period for each employee, based on what is optimal for that individual’s calculation (and which options are available for that period). Benjamin, for example, would only have had remuneration in the January 1 to March 15, 2020, reference period, so this period would be used for his calculation. Clara would only have income in the July to December 2019 period, so this period would be used. Then the employer may use either period for Alice based on whichever would be higher.
The Payroll InfoLine is accessible to Canadian Payroll Association members, and is one of the many benefits its members enjoy.