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COVID-19 – Lay Offs – For Employers -Assisting employees’ in unemployment through Supplemental Unemployment Benefit Plans

Considerations for Employers Laying Off Employees in Response to COVID-19 Pandemic

If your business makes the decision that it has no option but to decrease its workforce in response to COVID-19 or the resultant economic effects, it is important to be aware that the standard laws surrounding lay-offs and termination (including notice periods or pay in lieu of notice) still apply.

The British Columbia Employment Standards Act provides for temporary lay-off which includes:

  1. A layoff of up to 13 weeks in any period of 20 consecutive weeks
  2. (for employees who have a right of recall) a layoff that exceeds the specified period within which the employee is entitled to be recalled.

It may be available to you as an employer to assist your employees during their period of unemployment/lay off.

Contributing to Employee’s Employment Insurance Payments through Supplemental Unemployment Benefit Plans (SUB Plans)

These are for employers (or groups of participating employers) to provide assistance to their employees during a period of unemployment/layoff which is caused by temporary stoppage of work, training, injury, sickness or quarantine.

SUB Plans can be registered with Service Canada allowing the employer to top-up employee’s Employment Insurance benefits. This can be up to 95% of the employee’s weekly wages/salary (less the amount of the employee’s corresponding Employment Insurance benefits).

Importantly, the approval from Service Canada must be received prior to the implementation of the SUB Plan.

Payments made to a SUB Plan are not deducted from the employee’s Employment Insurance benefits. This further assists the employees in their weekly earnings during periods of unemployment. Similarly, EI premiums are not deducted (since payments under registered SUB Plans are not insurable earnings).

A SUB plan must include a complete description of the benefits and must meet the conditions provided by Service Canada.

Similarly, the SUB Plan must provide for the start and end date, must be in duration for at least one year and can be in effect for up to five (5) years.

For more information on SUB Plans, please visit https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/reports/supplemental-unemployment-benefit.html

The employment lawyers at Doak Shirreff Lawyers LLP are here to assist and can even do so remotely as needed during this time. Please feel free to reach out to us at [email protected] or call 250-763-4323, or through our toll-free number at 1-800-661-4959.