Work-Sharing fact sheet for employers - COVID-19 temporary special measures
On this page
- Work-Sharing agreement definition
- Duration of a Work-Sharing agreement
- Who can apply for Work-Sharing
- Not-for-profit employer eligibility
- New employee eligibility guidelines
- Expanding eligibility to staff essential to the recovery
- New temporary special measures for Work-Sharing
- Eligibility to apply for the temporary special measure
- Measures taken by the department doing to ensure there is sufficient capacity to support the Work-Sharing program
- Streamlined form and process
- One application form for multiple work units
- Application with multiple work locations
- Need for a Recovery Plan
- Weekly requirements (utilization reports)
- Wages paid to employees
- Work reduction of employees exceeding 60%
- Party applying for Work-Sharing agreement
- Employer’s responsibilities in a Work-Sharing agreement
- Apply for Work-Sharing
- Mandatory signature of all employees on Attachment A
- Employee representative in a Work-Sharing agreement
- Employee layoffs
- Establishment of the Employment Insurance benefit rate
- Employees receiving EI benefits
- Other sources of earnings
- Employee benefits under a Work-Sharing agreement
- Waiting period for Work-Sharing benefits
- Taxable Employment Insurance benefits
- Shareholders and Work-Sharing agreement
- Wages calculation under a Work-Sharing agreement
- For employers who have employees whose hours of work vary depending on emergency volume (on call)
- Employees on irregular work schedules
- Employers who already requested an extension under special measures for the steel and aluminum or forestry sector
- Timeline for submitting Work-Sharing documentation
- Business name change and eligibility
- Work-Sharing unit description
- Speed of service
- Utilization reports for employers with irregular work schedules
- Relief grant payment
- Contact us
Work-Sharing is a program supported through the Employment Insurance fund, that assists employers to face cutbacks and avoid layoffs. The reduction of employment must average between 10% to 60% of a normal work week over the life of the agreement. In order to help compensate for reduced income from the employer, the Canada Employment Insurance Commission (the Commission) assists EI eligible workers to collect Employment Insurance benefits.
Work-Sharing agreement definition
During a Work-Sharing agreement, available work is redistributed through a voluntary reduction in hours worked by all employees within one or more work units. This enables the employer to retain a full work force on a reduced work week rather than laying off part of the work force.
Duration of a Work-Sharing agreement
Work-Sharing is a temporary measure. Usually, Work-Sharing agreements can be a minimum of 6 weeks and a maximum of 26 weeks in duration. In extenuating circumstances, an extension to the agreement may be considered and approved by ESDC of up to 12 weeks.
A temporary special measure for COVID-19 has been put in place providing an extension of another 38 weeks, with a maximum of 76 weeks, to all businesses across Canada that are directly or indirectly impacted by the downturn in business due to COVID-19.
If the employer’s agreement begins or ends between March 15, 2020 and March 14, 2021, they may be eligible for a 38 or 50-week extension for a total of 76 weeks, regardless of the sector. For current agreements, the end date must fall between March 15, 2020 and March 14, 2021 at which point they would re-apply for the extension.
For active agreements that end between March 15, 2020 and March 14, 2021, they may be eligible for a 38 or 50-week extension for a total of 76 weeks.
Who can apply for Work-Sharing
Employers and employees must agree to participate in Work-Sharing and apply together.
To be eligible for a WS agreement, your business must:
- be a year-round business in Canada in operation for at least 1 year
- be a private business or a publicly held company, and
- have at least 2 employees in the WS unit
Eligibility was also extended to:
- Government Business Enterprises (GBEs), also referred to as public corporations, and
- not-for-profit employers experiencing a shortage of work due to a reduction of business activity and/or a reduction in revenue levels due to COVID-19
Your business is not eligible for WS if it is experiencing a reduction in business activity due to:
- a labour dispute
- a seasonal shortage of work
And if you are a:
- shareholder who is responsible for the direction of the company and who holds 40% or more of the voting shares
- employer who operates solely for the purpose of carrying out the administration of a government program/activity that is purely government in nature. For example:
- government agencies
To be eligible for WS, your employees must:
- be year-round, permanent, full-time or part-time employees needed to carry out the day-to-day functions of the business (your "core staff")
- be eligible to receive EI benefits, and
- agree to reduce their normal working hours by the same percentage and to share the available work
Eligibility was also extended to:
- employees considered essential to the recovery and viability of the business can now be eligible to participate in Work-Sharing. For example:
- technical employees engaged in product development
- outside sales agents
- marketing agents
Employees are not eligible if they are:
- seasonal employees and students hired for the summer or a co-op term
- employees hired on a casual or on-call basis, or through a temporary help agency
- employees responsible for the direction of the company and who hold more than 40% of the voting shares in the business
Not-for-profit employer eligibility
Not-for-profit employers experiencing a shortage of work due to a reduction of business activity and/or a reduction in revenue levels due to COVID-19 will be eligible to access the program.
New employee eligibility guidelines
Government Business Enterprises (GBEs), also referred to as public corporations, will now be eligible to access the Work-Sharing program.
Government owned establishments engaged in activities that are not purely governmental in nature, are usually classified to the same industry as privately owned establishments engaged in similar activities, and are now eligible for Work-Sharing.
This temporary expanded eligibility excludes employers that operate solely for the purposes of carrying out the administration of government programs and activities that are purely governmental in nature.
Expanding eligibility to staff essential to the recovery
In the context of COVID-19, employees now considered essential to the recovery and viability of the business can now considered be eligible to participate for Work-Sharing. Examples of employee now eligible includes:
- inside outside sales responsible for recovery
- technical employees engaged in product development
- executive marketing and sales agents responsible for recovery
- senior management responsible for recovery
- shareholders who have a role in recovery/investors
New temporary special measures for Work-Sharing
On March 11, 2020, the Government of Canada announced that it would make available over $1 billion for a whole-of-government response to the effects of COVID‑19 on Canada’s people, economy and businesses.
As such, the temporary special measures to support workers and employers affected by COVID‑19 includes the following:
- the maximum duration of Work-Sharing (WS) agreements was extended to a maximum of 76 weeks
- the mandatory cooling-off period between WS agreements is waived. Eligible employers can apply immediately for the remaining time up to the maximum established duration of 76 weeks
- reduce the previous requirements for a recovery plan by removing the Annex B and replacing it to a single line of text within the application
- reduce the requirement and expand eligibility to employers affected by accepting business who have been in year-round business for only one year rather than two, and to eliminate the burden of having to provide the sales/production figures for the last two years at the same time
- expand eligibility for staff who are essential to recovery, Government Business Enterprises (GBEs) and non-for-profit organization employers
Eligibility to apply for the temporary special measure
Eligible employers across Canada include those that are experiencing a downturn in business activity related to the global outbreak of COVID-19. Employers who received an extension under any of the other temporary special measures, and are now experiencing further reductions in business activity due to COVID-19, may also be eligible for these measures.
These measures are not limited to one specific sector or industry. They are intended to mitigate job loss and support business viability and recovery for all Canadian employers experiencing unexpected and unavoidable downturns as a result of COVID-19.
Employers are only eligible to participate in a maximum consecutive agreement period of 76 weeks under this temporary special measure.
Measures taken by the department doing to ensure there is sufficient capacity to support the Work-Sharing program
- The department currently has 9 processing sites across Canada that can process Work-Sharing applications
- Cross-training of employees from other programs to support the increased demand for the Work-Sharing Program
- The Department is exploring options to further support employers who have questions regarding Work-Sharing and is adding additional capacity to these efforts
Service Canada has also created an enquiry unit for clients affected by COVID-19 that are seeking information related to the Work-Sharing Program. Enquiries can be sent to the mailbox below for specific Work-Sharing information or to request general information about the Program.
Streamlined form and process
The streamlined Work-Sharing application form developed as part of COVID-19 now enables employers to request an initial agreement of up to 76-weeks as well as amendments, all in one form. Before COVID-19, a separate form was in place for employers who wished to request amendments to their existing agreements.
One application form for multiple work units
Employers can now submit one Work-Sharing application even there are multiples work units are included, as long as the employer, union representative or employee representative remains the same for all units and their names are added to all Attachment A forms.
Application with multiple work locations
A new process is currently being developed in order to enable employers who have employees in multiple work locations across Canada, to submit one bundle application that is processed in the region that has the biggest proportion of employees in the agreement.
This new process is an improvement from before COVID-19, where employers had to submit separate applications if they had employees working in different locations (regions), as each of the applications had to be entered separately by regional project officers.
Need for a Recovery Plan
No. The recovery plan (Annex B) requirement was removed as part of the special measures to support employers and was replaced by a single line of text within the application.
Weekly requirements (utilization reports)
Weekly requirements for employers/employees are still a requirement under the COVID-19 special measures. The weekly Utilization Report is still required via Data Gateway to ensure the appropriate WS Benefits are calculated and paid.
However, if technical difficulties arise with Data Gateway, they can be sent by email instead of by courier. Please consult the Coronavirus disease (COVID-19) – Employment and Social Development Canada web page to find out your region’s email address, and submit documentation electronically.
Wages paid to employees
The employer pays the wages to employees for the hours they worked, as per normal. The employer also completes the Utilization Report, so that Employment Insurance (EI) is aware of the work hours that employees missed. The employees are paid directly from EI for the percentage of their benefit rate that corresponds with the percentage of the work hours they missed.
For example, if the employee missed 50% of their normal weekly hours due to WS, they would receive 50% of their benefit rate from EI. Their benefit rate will not be equivalent to their normal wages, as it is generally 55% of their average weekly earnings to a maximum of $573 per week (for 2020).
Work reduction of employees exceeding 60%
The employee’s work reduction cannot exceed 60%. Under the Work-Sharing Program, the employer must agree to a reduction in the employees’ regular work schedule ranging between a minimum of 10% and a maximum of 60% on average, over the life of the agreement.
For example, in a regular 40-hour work week, the projected reduction in hours must be a minimum of 4 hours per week (10%), or a half day, and the projected maximum weekly reduction cannot exceed 3 days per week or 24 hours (60%).
Party applying for Work-Sharing agreement
Employers and workers must agree to participate in Work-Sharing and submit a joint application to ESDC. For any extension of the agreement or addition/deletion of Work-Sharing participants, the employer or the union/employee representative and ESDC all must agree. At any time during the agreement the employer, the union or employee representative or ESDC have the right to terminate the Work-Sharing agreement.
Employer’s responsibilities in a Work-Sharing agreement
The employer is responsible for scheduling hours of work. The employer will be responsible for reporting Work-Sharing hours on a bi-weekly basis. Any changes to the original agreement, including the addition or deletion of workers, should be reported to Service Canada immediately. Work-Sharing agreements do not affect workers’ entitlement to regular EI Benefits if they happen to be laid off after the agreement ends.
Apply for Work-Sharing
Employers can use the simplified Work-Sharing application forms to apply:
- EMP5100 - Applications for a Work-Sharing Agreement
- EMP5101 - Attachment A: Work-Sharing Unit Attachment
Note: Employers must submit their application to one of the following email addresses, based on the area your business is located or where the maximum of participants are located:
Western Canada and Territories
Mandatory signature of all employees on Attachment A
No but all employees in the Work-Sharing agreement must be listed on Attachment A. The Attachment A: EMP 5101 must at least have the name of a union representative (in cases of a unionized WS unit) or of the employee representative (in cases of non-unionized WS unit) who has verified the list of employees for accuracy
Employee representative in a Work-Sharing agreement
In a non-unionized workplace, the employee representative will normally be a member of the Work-Sharing unit but other examples can include:
- Payroll Administrators
- Human Resources Advisors/Administrators
The employee representative is required to verify Attachment A for accuracy and may play a role in sharing information with the Work-Sharing unit.
Some employers may have been unable to avoid layoffs prior to applying to participate in WS. Core employees who were laid off prior to the employer applying to enter into a WS agreement may be included in the WS unit. Any employees laid off between the submission of an application to enter into a WS agreement and the date the WS agreement commences will also be eligible to participate.
If the business does not recover as expected and an employee is laid off during or at the end of a Work- Sharing agreement, the employee can apply to transfer their claim to regular benefits. Normally, the benefit rate and the normal duration of the claim are not reduced by Work-Sharing participation, as WS benefits are not regular benefits. WS participation will not have exhausted any of their entitlement to regular or special benefits if only WS benefits were paid.
Note that employee benefits are based on their original Record of Employment (ROE), not on the Work-sharing hours.
Establishment of the Employment Insurance benefit rate
The Employment Insurance benefit rate for each employee is established at the start of the Work-Sharing agreement after the submission of a claim. The benefit rate is established in the same manner as the benefit rate for all other EI claims. The Work-Sharing benefit payable in any given week is based on the employee’s loss in normal average weekly earnings. It is expected that workers will make themselves available for work that is offered to them while participating in Work-Sharing.
Earnings received from sources other than Work-Sharing need to be reported by each claimant.
Employment earnings that are not from the Work-Sharing employer will be deducted from the Work-Sharing benefits payable based on the existing working while on claim provisions.
Employees receiving EI benefits
Employees who are receiving Employment Insurance regular or special benefits and are called back to work can stop receiving these benefits in order to participate in WS. If not already on the WS agreement, an amendment would have to be done to add employees to an existing agreement and then, they would need to be added to weekly Utilization Reports in order to start receiving WS EI benefits.
Other sources of earnings
The EI working while on claim provisions allow claimants to stay connected to the labour market and earn additional income while on claim. The provisions allow claimants to keep receiving a portion of their EI benefits, along with all earnings from employment or other sources.
Claimants can keep 50 cents of EI benefits for every dollar earned or received while on claim, until their earnings reach 90% of the weekly earnings used to establish their claim. Any earnings above this cap are deducted dollar-for-dollar from benefits. This method is the default rule that automatically applies to all eligible claims.
Note: Specific statutory holidays occurring within a Work-Sharing period are the responsibility of the employer and not compensated by Employment Insurance benefits.
Employee benefits under a Work-Sharing agreement
The employer must maintain all existing employee benefits for example:
- health/dental insurance;
- pension benefits;
- group disability
However, employees should be made aware that benefits (including any subsequent payout of benefits) may be reduced if calculated based on earnings or hours of work.
Waiting period for Work-Sharing benefits
There is no one-week waiting period for Work-Sharing benefits. However, benefits are processed through the EI payment system, meaning it will take a few weeks for the first cheques to arrive. Every two weeks, the employer must verify each claimant’s EI report card after it has been filled out. This EI report card is used to determine the claimant’s bi-weekly entitlement to Work-Sharing benefits.
Taxable Employment Insurance benefits
EI Benefits are taxable and are subject to the rules and regulations of the Canada Customs and Revenue Agency Act. In certain cases for high-income workers, a portion of the EI benefits under Work-Sharing may have to be repaid when the annual income tax return is filed. For more information on repayment of benefits at income tax time please visit: Employment Insurance (EI) and Repayment of Benefits at Income Tax Time.
Shareholders and Work-Sharing agreement
Shareholders can be part of the Work-Sharing agreement if they do not hold significant decision-making power and own less than 40% of the company’s shares.
Wages calculation under a Work-Sharing agreement
The amount of benefits paid for a week of Work-Sharing is calculated by comparing the hours of work missed because of the Work-Sharing agreement against the hours the claimant would have normally worked. Benefits are paid as a percentage of hours missed. For example:
- weekly benefit rate = $500.00
- the normal work week was 40 hours prior to the Work-Sharing agreement, and
- in the week under consideration, the claimant works 30 hours, and misses 10 hours of work due to the Work-Sharing agreement
In this case, the claimant has worked 30 out of a possible 40 hours. Therefore, 10 out of 40 hours were lost due to the Work-Sharing agreement, or 25%. This claimant will be entitled to 25% of their benefit rate, or $125.00, for the 10 hours missed because of the Work-Sharing agreement.
For employers who have employees whose hours of work vary depending on emergency volume (on call)
The employer must establish an average of Normal Weekly Hours (NWH) and Average Weekly Earnings (AWE) for the Work-Sharing (WS) participants. NWH and AWE are used to determine the percentage of work an employee has missed and the amount they may be payable, and NWH are included in Attachment A (EMP5101) under the column titled “Normal Weekly Hours”.
If the NWH vary from week to week, the project officer shall determine an average over the last year to come up with the NWH per participant.
Employees on irregular work schedules
Employees on an irregular work schedule may cycle through a period of rotating shifts comprising longer days or hours of work followed by more hours or days off work, rather than working a conventional work week comprised of five working days with two days off within a calendar week. For example, the normal work period may cover a total 21 calendar days, with employees working 15 days followed by 6 days off.
The way an employer divides work hours is up to them and can vary from one week to the next. Employees participating in WS can alternate weeks of employment and would be considered having an irregular work schedule; for example, an employee would work 1 week while the other would work the next.
Once the employer’s irregular work schedule is defined, the employee’s normal weekly hours may be determined based on their normal work schedule pattern over the last year.
All employees are required to work at least 30 minutes per week to remain eligible for benefits under the program. Normally, a week is counted as a week of unemployment for the purposes of paying WS benefits when an employee has worked at least 30 minutes in a calendar week (Sunday to Saturday). In the case of an irregular work schedule, due to the combination of hours/shifts/days not worked due to an employee’s participation in WS and those dates not worked due to the irregular work schedule, the likelihood exists that there will be calendar weeks in which an employee does not work a minimum of 30 minutes. When a WS agreement is approved on the basis of an irregular work schedule, such a week may be counted as a week of unemployment for the purposes of paying WS benefits. However, the manner by which the employer reports hours worked and hours not worked due to the WS agreement may be modified as an averaging or pro-rating formula.
However, employers need to make sure that throughout the life of the agreement, employees who have irregular work schedules have a reduction in working hours between 10-60% (on average).
Employers who already requested an extension under special measures for the steel and aluminum or forestry sector
Employers who already received an extension (to up to 76 weeks) under any of the other temporary special measures, and are now experiencing further reductions in business activity due to COVID-19, may be eligible another WS agreement.
For example, an employer currently accessing special measures under Steel and Aluminum or Forestry could serve the 76-week maximum agreement period that was already approved, and then apply for a new agreement under COVID-19 to a maximum of 38 weeks.
Timeline for submitting Work-Sharing documentation
Before COVID-19, employers had to send their Work-Sharing application (and supporting documentation) at least 30 days prior to their requested start date.
Employers no longer need to submit applications 30 days in advance. The streamlined measures undertaken by Service Canada will aim to reduce the average 30-day processing time to approximately 10 calendar days. The Department will prioritize incoming WS files and aim to process these applications quickly to support Canadian employers and employees.
Note that this timeline may vary based on the amount of applications received.
Business name change and eligibility
Regardless of a change to the employer’s legal name, and provided that the name change is not the result of receivership, bankruptcy or a sale of assets, employers who have been in business in Canada for over a year are eligible to the Work-Sharing program.
Work-Sharing unit description
A Work-Sharing unit is a group of core employees who have agreed to participate in the Work-Sharing program and to reduce their normal working hours. A Work-Sharing agreement may include more than one Work-Sharing unit. Some larger employers may have WS agreements that are comprised of several WS units (included in separate attachment A forms) with different job descriptions or from different departments.
The unit generally includes all employees in a single job description or all employees who perform similar work. Employees who do different work but whose jobs impact one another (for example, slowdown in business affects one job resulting in less work for another job or jobs) may form one WS unit provided that all employees can reduce their hours equally.
The Work-Sharing unit should not include employees who are needed to help generate work and/or employees who are essential to the recovery of the business. For example:
- senior management
- executive level marketing/sales agents
- outside sales representatives
- technical employees engaged in product development
These individuals should be working full-time in support of the company’s recovery plan. Other supervisors and managers are eligible to participate and may be included in the Work-Sharing unit (as long as they are not determining the direction of the company).
There must be a minimum of 2 employees in a Work-Sharing unit.
Speed of service
Given the high volume of applications currently being submitted by employers across Canada due to COVID-19, and in order to assist employers with the benefit as quickly as possible, the speed of service for processing applications is approximately 10 days (instead of 30 days before COVID-19).
Utilization reports for employers with irregular work schedules
Each employee is required to work at least 30 minutes per week to remain eligible for benefits under the program, as indicated on Utilization Reports.
Relief grant payment
A relief grant one-time lump sum payment to employees would be excluded from earning under regulation 35 if the payment is not conditional to providing some sort of service to the employer for the assistance and that the assistance is freely given by the employer, without any legal obligation.
For more information on the Work-Sharing program, employers across Canada may call toll-free.
Canada and the United States
Outside Canada and the United States
Telephone: 506-546-7569 (collect calls accepted)
Hours of operation: 7:00 am to 8:00 pm, Eastern Time, Monday to Friday.
Service Canada has also created an enquiry unit for clients affected by COVID-19 that are seeking information related to the Work-Sharing Program. Enquiries can be sent to the mailbox below for specific Work-Sharing information or to request general information about the Program.Email: EDSC.DGOP.TP.REP-RES.WS.POB.ESDC@servicecanada.gc.ca
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