Wage Earner Protection Program for a third party: Overview

1. Overview

The Wage Earner Protection Program (WEPP) provides for the payment of outstanding eligible wages to individuals whose employer is bankrupt, subject to a receivership, within the meaning of subsection 243(2) of the Bankruptcy and Insolvency Act (BIA). As of November 20, 2021, the WEPP now also covers:

• certain foreign proceedings
• certain proceedings under the Companies’ Creditors Arrangement Act (CCAA), or
• proposals under the BIA under certain circumstances, which also includes a Notice of Intention to file a proposal under the BIA (Division 1 Part III)

Employees can receive a one-time payment of up to an amount equivalent to 7 times the maximum weekly insurable earnings under the Employment Insurance Act ($8,507.66 for 2024).

The WEPP is delivered by Service Canada for the Labour Program.

What is subrogated debt

After any WEPP payment, the Government of Canada is subrogated to any rights the individual may have against the employer, to the extent of the amount paid. This means that the Government of Canada replaces the WEPP recipient in the bankruptcy, receivership, or other WEPP qualifying insolvency proceedings, up to the amount of the WEPP payment made to the applicant.

As a result of the subrogation agreement in the WEPP Application Form, the WEPP recipient's entitlement to any further payment from the bankruptcy, receivership, or other WEPP qualifying insolvency proceeding is subject to the right of the Government of Canada. The Government of Canada's debt must be paid in full before any further payments can be paid to the WEPP recipient from the bankruptcy, receivership, or other WEPP qualifying insolvency proceeding; otherwise a WEPP overpayment may be created.