Wage Earner Protection Program for a third party: Overview

From: Employment and Social Development Canada

1. Overview

The Wage Earner Protection Program (WEPP) provides for the payment of outstanding eligible wages to individuals whose employer is bankrupt or subject to a receivership within the meaning of subsection 243(2) of the Bankruptcy and Insolvency Act.

The payment covers eligible wages up to:

For bankruptcies or receiverships prior to February 27, 2018, an amount equal to four times the maximum weekly insurable earnings under the Employment Insurance Act ($3,976.92 for 2018), or

For bankruptcies or receiverships on or after February 27, 2018, an amount equal to seven times the maximum weekly insurable earnings under the Employment Insurance Act ($ 7,148.05 for 2019).

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 or receivership 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 or receivership estate 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 or receivership estate; otherwise a WEPP overpayment may be created.

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