OTTAWA, June 30 - The Government of Canada is making amendments toimprove Employment Insurance (EI) for seasonal and part-time workers. TheHonourable Jane Stewart, Minister of Human Resources Development, todayannounced that the Employment Insurance regulation governing "small weeks"would be amended to increase the Small Week threshold to $225 from $150. Thischange will be implemented nationally on September 7, 2003, and comes as aresult of the Government of Canada's continuous efforts to improve the EIprogram. "This adjustment is a direct result of the Government of Canada'scommitment to monitor and assess the EI program so that it continues to adaptto changing labour market realities and is responsive to the needs ofCanadians," said Minister Stewart. "We are making EI more responsive toCanadians with irregular work patterns by introducing an amendment to alignwork incentives in EI." The Government of Canada is committed to helping Canadians find and keepwork. By increasing the Small Weeks threshold to $225 from $150, individualswill be encouraged to accept weeks of work with lower than average earnings.This increase allows people to accept part-time work without lowering thebenefit rate on a future claim. Human Resources Development will continue to monitor and assess the EIprogram to ensure it remains responsive to Canadians, their communities andthe economy. See attached backgrounder for details BACKGROUNDER Increase to Small Weeks Threshold The Government of Canada is increasing the Small Weeks threshold to $225from $150 to encourage more individuals to accept weeks of work with lower-than-average earnings. When calculating Employment Insurance (EI) benefits, all weeks of work inthe 26 weeks preceding the last paid employment day are taken intoconsideration. These weeks can be regular weeks (earnings above the thresholdnow at $225) or small weeks (earnings less than $225). A combination of regular weeks and small weeks can lower the benefit rateon the next claim. As a consequence, workers may be reluctant to accept smallweeks of work. Increasing the Small Weeks threshold to $225 from $150 givesmore flexibility in calculating EI benefits, without lowering the benefit rateon future claims. ------------------------------------------------------------------------- Example Terminology: Rate calculation period: The 26 weeks preceding the last day of paid employment prior to the commencement of the benefit period. Minimum divisor: The divisor is the number of 35-hour weeks of work in the rate calculation period in the regions required to qualify for EI plus 2; e.g. if the number of 35-hour weeks required to qualify is 12, the minimum divisor is 14. In a region where the minimum divisor is 14, an individual has accumulated 12 regular weeks of work at $400, 13 small weeks at $175 and one small week at $220. The average weekly earnings will be calculated as follows: All regular weeks of earnings 12 weeks x $400 = $4,800 Plus the two best small weeks $175 and $220 = $395 for a total of $5,195 The total is divided by the minimum divisor (14) and $5,195 (divided by) 14 = $371 multiplied by 55% $371 x 55% = $204 The weekly benefit is $204.00 (Using the current small weeks threshold of $150, the benefit rate would have been $154 in this example.) Needless to say, all earnings must still be reported and earnings allowed while on claim are still $50 per week or 25% of weekly earnings (whichever is higher). As well, all insurable hours will count for eligibility purposes even if they are not used to calculate the benefit rate. ------------------------------------------------------------------------- The Small Weeks initiative was first introduced as a pilot project in1997 and made into a permanent feature of EI in 2001 in response to employerand worker concerns that accepting weeks with lower earnings acted as adisincentive to accepting part-time or short-term work. The Small Weeksinitiative encourages workers to accept all available work. Since its inception, the Small Weeks initiative has contributed to theefficiency and effectiveness of the labour market by encouraging Canadians toaccept part-time and temporary employment, thereby filling short-term labourshortages faced by employers. It also helps workers in part-time or seasonalemployment to maintain their attachment to the work force. Human ResourcesDevelopment Canada's evaluation shows that claimants worked an additional twoextra small weeks on average since the Small Weeks initiative was firstintroduced. Raising the threshold recognizes that wages have increased. The new rateof $225 per week aligns with the current earnings and hours profile of theemployment that workers are encouraged to accept. The national profile of part-time work indicates that the average part-time wage is currently $12.40per hour and the average part-time workweek is 18 hours, or about two and ahalf days of work, the equivalent of $225. This adjustment to the Small Weeks threshold results directly from theGovernment of Canada's commitment to monitor and assess the EI program so thatit continues to adapt to changing labour market realities and remainsresponsive to the needs of Canadians. The Small Weeks initiative is one of themany programs that Human Resources Development Canada administers to helpworkers find and keep work.- 30 -
