Employers – if you have had to temporarily laid off any employees due to the pandemic, you may have the option of temporarily ‘topping up’ their earnings during the lay offs, above and beyond their Employment Insurance (“IE”) benefits.
You can do so by using a “Supplemental Unemployment Benefit Program” (a “SUB plan”).
You can enter an agreement with the federal Government to have a SUB plan.
Wage payments made under a SUB plan are not earnings and, therefore, these payments will not be deducted from an employee’s EI benefits.
To use this option, employers must register the SUB plan with Service Canada before it can be implemented. When a plan is submitted to Service Canada, the officer will review and ensure it complies with the necessary requirements. If needed, officers can help employers develop and revise plans to meet the requirements.
Here are the basic requirements:
- identifying which employees the SUB plan will cover by group or position (not by name);
- including a start and end date for the SUB plan;
- covering any period of unemployment because of temporary work stoppage, illness, injury, or quarantine;
- requiring employees to apply for and receive benefits;
- if an employee is not receiving benefits, they may still be eligible in certain circumstances.
- confirming that the combined amount received from the plan and the employee’s weekly EI benefits is not more than 95 percent of the employee’s normal weekly earnings;
- outlining the method used by the employer to finance the SUB payments, and confirming that payments are financed exclusively by the employer;
- requiring any changes to be made in writing and submitted to Service Canada within 30 days of the change;
- explaining that the employees have no vested rights to these payments other than during the applicable period;
- providing that payments for other guaranteed annual renumerations, deferred renumerations or severance benefits are not affected by these payments;
- your SUB plan must be approved by the government before it is implemented.
There may be other options and advantages for your SUB plan, too.
For example, employers may be able to require that employees return to work for a specified period after these supplemental employment benefits are paid.
Approval from the Service Canada SUB Program must be received before it is implemented.
More information is available here: