After you apply
Service Canada will assess your application to make sure:
- it meets the eligibility criteria of the Work-Sharing Program
- the employers’ statements are valid
- the employer has sent all required documents and forms
Service Canada will acknowledge in writing the receipt of the application.
A Program Officer will inform you of the status of your application by email. All decisions, whether approved or rejected, will be confirmed in writing.
The Program Officer will conduct a cost analysis (comparing the cost related to the temporary layoffs and the cost of the proposed Work-Sharing agreement). This is to establish the cost difference/effectiveness of suggesting or not a Work-Sharing application. As well, the Program Officer will consider a social/community impact assessment to determine the overall impact of the business on the community.
In order to recommend the application for approval, the Program Officer must conclude that:
- Work-Sharing is the appropriate program vehicle to address the work reduction
- there is a reasonable expectation, based on a realistic plan of action by the employer. All members of the Work-Sharing unit(s) will return to normal working hours by the end of the agreement, and
- not required, but employers may be reached out to by other levels within Service Canada (Team Leader, SPDO)
If your agreement is approved
In this section
Sign the agreement within 60 calendar days
A signed agreement will end if is not carried out within 60 calendar days of the agreement’s start date.
An agreement that is not implemented would be where employees would have not experienced a reduction in work hours. Sufficient reduction to make Work-Sharing payable under this agreement within 60 days of the beginning of this agreement.
In both cases, if you still wish to participate in the Work-Sharing program, you will need to submit a new application.
List of employer obligations during the agreement
- Make information about the Work-Sharing agreement available to all employees in the Work-Sharing unit
- Ensure that the employee / union representative distributes a copy of the Employee Annex to all members of the Work-Sharing unit
- Submit a weekly Utilization Report for each employee in the Work-Sharing unit to report:
- the total hours worked, including any overtime hours
- the hours of work missed due to participation in Work-Sharing, and
- the hours of work missed due to any other reasons
- A record of employment (ROE) must be provided to each employee who will be joined in the Work-Sharing program. An ROE can be issued after the employee has completed their last shift prior to the start of the agreement
- Maintain all existing employee benefits (Employment Insurance benefits, health/dental insurance, pension benefit, vacation, group disability, etc.)
- However, benefits may be reduced (including any subsequent payout of benefits, for example, disability benefits) due to participation in a Work-Sharing agreement if employees have lower gross (insurable) earnings and/or fewer hours of work. If this is the case, you must advise the employees if their benefits are affected by the Work-Sharing agreement
- Process Work-Sharing benefits for the employees using the enrolment sheet
- Provide the employees in the Work-Sharing unit(s) with the reference code you received from the Program Officer in charge of the application. The Officer sends the reference code in a Work-Sharing Employees notice. The reference code allows the employees to apply online for Employment Insurance benefits, without any delays. The code will only be valid for the time period mark on the notice
- Employers who have employees in multiple work locations across Canada can submit 1 bundle application for benefits. However, if they have multiple employer / employee representatives in different regions, applications should be submitted apart (based on each region) since reference codes are region-specific. For example, an employer with work locations in the Atlantic and Quebec regions would submit 2 applications and get 2 reference code
- If an employer sends multiple applications to different Processing Centers, these will be treated separately
- Advise their employees if there is a delay in the initial receipt of Work-Sharing benefits
- Maintain proper records of each employee on Work-Sharing during the agreement, including wages and any other remuneration paid to those employees each week
- Make such records available, upon request, to Service Canada for inspection and audit
- Report the progress of the recovery plan
- Due to COVID-19 special measures, a recovery plan is no longer required
- Notify Service Canada before making any changes to the agreement
- Schedule at least 1 half hour of work per week for employees in order for them to qualify for Work-Sharing Employment Insurance benefits
- Not increase your staff in your workforce during the agreement, but may replace core-employees who choose to leave
- Note for company with multiple departments: The departments that are not participating in Work-Sharing may increase staff as required. That is, no employees form part of a Work-Sharing unit
Employees receiving benefits during the agreement
Receiving Work-Sharing benefits
The employee must apply for Employment Insurance using the Reference Code.
You do not have to serve a waiting period for Work-Sharing benefits. However, as these benefits are processed through the Employment Insurance payment system:
- since Employment Insurance pays employees on a bi-weekly for the first cheque to arrive. It is important that your employer advises you of this delay in the initial receipt of Work-Sharing benefits
- it may take a few weeks after your employer has submitted the first 2 Utilization Reports
The benefits payable are based on the employee’s normal average weekly earnings, as calculated at the start of the agreement. If the employees work irregular hours:
- the average weekly wage is calculated by averaging the hours worked per week over the last year preceding the application
During the Work-Sharing agreement, the employer may request an employee to work on a Work-Sharing day. The employee is required to report to work as it becomes available.
Earnings from Work-Sharing employment received in any week by an employee shall not be deducted from the Work-Sharing benefits. If a Work-Sharing participant has earnings from sources other than the Work-Sharing employment. Percentage of these earnings will be deducted from any Work-Sharing benefits payable the week in which the earnings occurred. Earnings are deducted in the following way:
- if the earnings received are less than the Earning Threshold:
- (for example, 90% of the Weekly Insurable Earnings (WIE) used to calculate the Employment Insurance claim)
- 50% of the earnings will be deducted from any Work-Sharing benefits payable
- if the earnings received are more than the Earning Threshold but less than the WIE
- 50% of the earnings up to the Earning Threshold will be deducted as well as 100% of the earnings over the Earning Threshold
- if the earnings received are equal to or greater than the WIE, no benefits will be payable
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 is aware of the work hours that employees missed.
The employees are paid directly from Employment Insurance:
- for the percentage of their benefit rate that corresponds with the percentage of work hours they missed. (For example, if the employee missed 50% of their normal weekly hours due to Work-Sharing). They would receive 50% of their benefit rate from Employment Insurance
- their benefit rate would not be equal to their normal wages. Normally 55% of their average weekly earnings to a maximum of $638 per week (for 2022)
Tax deductions for Work-Sharing benefits
Tax deductions for Employment Insurance Work-Sharing benefits are determined from the information the claimant provides. The information gave in the Income Tax section of the Employment Insurance application. The amount of tax deducted is specific to the claimant's province, personal tax situation and benefit rate.
The Employment Insurance benefits received by Work-Sharing participants are taxable. However, because of the weekly amount of benefits paid, taxes are not always withheld at source.
Participants may wish to have their income tax deductions increased. In order to avoid having to pay a large amount of income tax at year-end.
The employee can make this request by phone with Employment Insurance at the toll-free number: 1-800-206-7218, TTY: 1-800-529-3742.
At the time the participant files their income tax return, depending on their net income:
- they may be required to repay some of the Employment Insurance benefits received
- benefit repayment requires claimants with a net yearly income exceeding a specified threshold to repay a percentage of the Employment Insurance regular benefits received during the tax year
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