Wage Earner Protection Program for an employee: Eligibility
From: Employment and Social Development Canada
2. Eligibility
You may be eligible if you meet all of the following:
- your employment has ended
- your former employer has filed for bankruptcy, is subject to a receivership, or other WEPP qualifying insolvency proceedings. Other WEPP qualifying insolvency proceedings, as of November 20th, 2021, are as follows:
- proposals under the Bankruptcy & Insolvency Act (BIA) (Division 1 Part III). Note: this also includes a Notice of Intention (NOI) to file a proposal under the BIA (Division 1 Part III)
- certain Companies’ Creditors Arrangement Act (CCAA) proceedings
- certain foreign proceedings
- for these other proceedings, the former employer must have terminated all of its employees, in Canada, other than any retained to wind down its business operations. The trustee/receiver appointed may be required to provide Court documents in order to validate these proceedings
- you are owed wages, vacation pay, termination pay or severance pay from the former employer
- amounts owed were earned during the eligibility period or, in the case of termination pay or severance pay, your employment was terminated either during the eligibility period or prior to the discharge of the trustee/receiver
You are not eligible if, during the period for which you are owed eligible wages, you:
- were an officer or a director of the former employer
- had a controlling interest in the business of the former employer
- were a manager whose responsibilities included:
- making binding financial decisions impacting the business of your former employer, and/or
- making binding decisions on the payment or non-payment of wages by your former employer
- were not dealing at arm's length with any of these persons
Types of eligible wages
The following amounts are considered eligible wages under the WEPP:
- wages (salaries, commissions, compensation for services rendered, gratuities accounted for by the former employer, production bonuses and shift premiums) that were earned during the eligibility period
- disbursements of a travelling salesperson properly incurred in and about the business of the former employer earned during the eligibility period
- vacation pay earned during the eligibility period
- amounts owed were earned during the eligibility period or, in the case of termination pay or severance pay, your employment was terminated either during the eligibility period or prior to the discharge of the trustee/receiver
Eligibility period
The wages, other than termination pay and severance pay, owed to you must have been earned during the eligibility period. The WEPP eligibility period is the 6-month period before the bankruptcy or receivership, or other qualifying insolvency proceedings.
WEPP qualifying restructuring proceedings
WEPP qualifying restructuring events are:
- Notice of Intention (NOI) to make a proposal under Division I Part III of the BIA, and/or
- a proposal under Division I of Part III of the BIA, and/or
- proceedings under the CCAA
If your former employer has attempted a business restructuring as defined in the WEPP Act, the eligibility period would be:
- the period starting 6 months before the first restructuring proceeding, and
- ending on the date of the bankruptcy, receivership, or date the court determined that all former employees in Canada had been terminated, other than any retained to wind down its business operations
Text description
Timeline showing that the eligibility period for wages starts 6 months prior to the WEPP qualifying event, which may be the date of:
- notice of intention to file a proposal under Division I of Part III of the Bankruptcy and Insolvency Act (BIA)
- actual proposal under the BIA
- latest proceeding under the Companies’ Creditors Arrangement Act
- actual bankruptcy
- first day of receivership, or
- WEPP qualifying court order
The eligibility period for wages terminates on the date of:
- actual bankruptcy
- first day of receivership, or
- WEPP qualifying court order
An arrow is showing that wages (such as salaries and vacation pay) earned between these two dates may be eligible for payment.
Another arrow is showing that the eligibility period for termination pay and severance pay, also starts 6 months prior to the WEPP qualifying event and extends until the discharge of the trustee or receiver. If the applicant’s employment ends during this period, they may be eligible to WEPP payment for termination pay and severance pay.
Continued to work for the trustee/receiver after the date of the bankruptcy, receivership, or date the court determined that all former employees in Canada had been terminated, other than any retained to wind down its business operations
Employees sometimes continue to work after the date of bankruptcy or receivership, or the date the court determined that all former employees in Canada had been terminated, other than any retained to wind down its business operations. These individuals only become eligible for WEPP once their employment ends.
Qualifying for the WEPP if you are related to your employer
You may still qualify for a WEPP payment if you are related to your employer. Your application will be assessed to determine whether or not, despite your relationship to your employer, you were treated the same as other employees.
For WEPP enquiries, call the WEPP information line at 1-866-683-6516 (TTY: 1-800-926-9105) or visit a Service Canada Centre.
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