The Federal Government’s COVID-19 assistance proposals were passed by Parliament and received royal ascent on March 25th.
Previously announced benefit proposals, the Emergency Care Benefit and the Emergency Support Benefit were combined into the Canada Emergency Response Benefit (“CERB”).
Qualification criteria for the CERB are essentially the same as for the prior plans. A taxable benefit of $2,000 per month for up to 4 months will be paid to:
- workers who must stop working due to COVID-19 and do not have access to paid leave or other income support.
- workers who are sick, quarantined, or taking care of someone who is sick with COVID-19.
- working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures.
- workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work.
- wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
- workers who are still employed but are not receiving income because of disruptions to their work situation due to COVID-19.
This would help businesses keep their employees as they navigate these difficult times, while ensuring they preserve the ability to quickly resume operations as soon as it becomes possible.
Canadians who are already receiving EI regular and sickness benefits as of March 25, 2020 would continue to receive their benefits and should not apply for the CERB.
- If their EI benefits end before October 3, 2020, they could apply for the CERB once their EI benefits cease, if they are unable to return to work due to COVID-19.
Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply.
Canadians who are eligible for EI regular and sickness benefits would still be able to access their normal EI benefits, if still unemployed, after the 16-week period covered by the CERB.
Should employees apply for CERB or EI benefits?
Workers cannot apply for CERB if they are collecting EI, so there is an element of mutual exclusivity in deciding which benefit to pursue.
If the employer’s intention is to terminate employees, the pre-existing EI claim process is appropriate.
If the employer can continue the employees’ employment with a temporary layoff:
- employees earning less than $47K annually may be better off under the CERB. The EI maximum is $573 per week based upon 55% of insurable earnings of $54,200. The insurable earnings to net the CERB is $2,000 monthly / 4 (weekly) / 55% X 52 weeks (annual) = $47,273. EI benefits on such lower insurable earnings would be less than the $500 per week value of the CERB.
- response to CERB applications may be faster than EI claims
If an employee on CERB benefits is still unemployed after the CERB runs out, they can apply for EI.
Employers are required to file a Record of Employment Form (“ROE”) and indicate the nature of the interruption of earnings (albeit termination or temporary layoff) within five calendar days of the interruption.
An employer may be at risk for severance obligations where a layoff is found to be a termination/constructive dismissal.