Kootnekoff: Changes to the Employment Standards Act

Kootnekoff: Changes to the Employment Standards Act

Susan Kootnekoff is the founder of Inspire Law, an Okanagan based-law practice

Changes to BC Employment Standards and Federal Emergency Wage Subsidy, as of May 9.

We previously wrote about temporary changes to BC’s Employment Standards Act (ESA) which allow employees to take temporary leaves of absence due to covid-19.

A leave of absence is different from a layoff. Effective May 4, 2020, amendments to B.C.’s Employment Standards Regulation now contemplate a temporary layoff lasting up to 16 weeks. Normally in B.C., a layoff is deemed to be permanent once it lasts 13 weeks in any 20 consecutive week period.

The extension of temporary layoffs to 16 weeks is a temporary provision, which is expected to be repealed once it is no longer necessary.

Allowing leaves of up to 16 weeks aligns with the federal Canada Emergency Response Benefit (CERB), which permits benefits to be paid for up to 16 weeks to individuals laid off due to COVID-19.

A layoff must still be otherwise legally permitted. In B.C., a layoff is permitted only if the employment agreement contains a clause permitting it. Without such a clause, unless the employee otherwise agrees, he or she is entitled to notice of termination or pay in lieu of such notice in accordance with the ESA.

Federal Wage Subsidies and Emergency Income Benefit

Among the support available to individuals is the CERB. Among the support available to employers are two covid-19 related wage subsidies: the Temporary Wage Subsidy (TWS) and the Canada Emergency Wage Subsidy (CEWS).

Canada Emergency Response Benefit for Individuals

The CERB provides a taxable benefit of $500/week for up to 16 weeks to individuals who are out of work due to covid-19, had income over $5000 in 2019 or in the 12 months before the application, and will lack employment or self-employment for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, the person must expect no employment or self-employment income.

Temporary Wage Subsidy for Employers

The 10% TWS allows eligible employers to reduce the amount of payroll deductions remitted to the Canadian Revenue Agency (CRA) for 3 months.

The subsidy is up to $1,375 for each eligible employee to a total maximum of $25,000 per employer. More information on the TWS is available here.

Revised Canada Emergency Wage Subsidy for Employers

Under revisions announced to the CEWS on May 1, 2020, the CEWS reimburses wages to “eligible entities” which experience a decline in “qualifying revenue” of at least 15% in March and 30% in April and May. The decline is measured by comparing the relevant month with the same month in 2019.

New businesses may measure their decline in qualifying revenue as compared to January and February, 2020.

In qualifying cases, the government may reimburse up to 75% of eligible employees’ pre-coronavirus salary up to $58,700, or to $847 per week. The subsidy is for up to 12 weeks, from March 15 to June 6, 2020, although it may be extended.

Only employees are to be included in CEWS calculations. Contractors are not eligible.

The CEWS will not be paid if employees have not been paid by the employer for more than 14 consecutive days during a qualifying period. This may affect when an employer will recall employees who have been laid off. Also, employees recalled must be paid for a sufficient number of days in the relevant period in order to be included in a CEWS application. An employer may have an incentive to pay employees a sufficient amount before recalling them, in order to allow them to be included in the CEWS calculations. If the employee was receiving the CERB, it is possible that he or she may be required to repay the relevant CERB payments.

The decline in qualifying revenue is to be determined in accordance with the business’s normal accounting practices. Extraordinary items and benefits under the CEWS and the TWS are excluded. Revenue from those not dealing at arm’s length with the eligible entity is also excluded. Various special rules apply to registered charities and tax exempt entities, groups of eligible entities that normally have consolidated financial statements, “affiliated groups of eligible entities” and joint ventures.

More information on the CEWS is available here.

A separate loan program, the Canada Emergency Business Account, is available through financial institutions to facilitate paying wages for which reimbursement may then be sought. To qualify, an organization must demonstrate it paid between $20,000 to $1.5 million in total 2019 payroll.

Employers are expected to accurately scrutinize their eligibility to claim the CEWS. Audits may be carried out in the future. Stiff penalties apply to those who seek the CEWS and are later found not to be eligible. Organizations must exercise extreme caution before taking any steps to intentionally reduce qualifying revenues for the purpose of qualifying for the CEWS, or substantial penalties could result.

About : Susan Kootnekoff

Susan Kootnekoff is the founder of Inspire Law, an Okanagan based-law practice. She has been practicing law since 1994, with brief stints away to begin raising children. Susan has experience in many areas of law, but is most drawn to areas in which she can make a positive difference in people’s lives, including employment law. She has been a member of the Law Society of Alberta since 1994 and a member of the Law Society of British Columbia since 2015. Susan grew up in Saskatchewan. Her parents were both entrepreneurs, and her father was also a union leader who worked tirelessly to improve the lives of workers. Before moving to B.C., Susan practiced law in both Calgary and Fort McMurray, AB. Living and practicing law in Fort McMurray made a lasting impression on Susan. It was in this isolated and unique community that her interest in employment law, and Canada’s oil sands industry, took hold. In 2013, Susan moved to the Okanagan with her family, where she currently resides.

Like us on Facebook and follow us on Twitter.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A COVID-19 exposure has been confirmed at Black Mountain Elementary in Kelowna Saturday, Jan. 23, 2021. (Google Image)
Another COVID-19 exposure confirmed at Kelowna school

Interior Health confirmed an exposure at Black Mountain Elementary School Saturday

Members of BCEHS Station 343 in Lake Country receive a donation of treats and wine from the community in December. (Contributed)
‘Unexpected and heartwarming’: Okanagan community supports paramedics

Cards, discounts, treats, more given to Lake Country paramedics in sign of support

Okanagan Indian Band Chief Byron Louis has served as the band’s chief since his first of six electoral wins in 1991. (File photo)
Okanagan Indian Band seeks nominations for upcoming election

A new OKIB chief and council will be elected March 30, 2021

An individual at Rutland Senior Secondary school has tested positive for COVID-19. (Aman Parhar/Omineca Express)
Individual at Kelowna school tests positive for COVID-19

Authorities say they are self-isolating at home with support from local health teams

Flooding has become a reality for many communities in the Okanagan Valley as the region faces more extreme weather storms, blamed on the impact of climate change. (File photo)
Okanagan high target for spring flooding

Higher snowpack and mild winter precipitation levels raise concerns for Canada’s insurance industry

U.S. Senator Bernie Sanders sits in on a COVID-19 briefing with Dr. Bonnie Henry, provincial health officer, and Adrian Dix, B.C. minister of health. (Birinder Narang/Twitter)
PHOTOS: Bernie Sanders visits B.C. landmarks through the magic of photo editing

Residents jump on viral trend of photoshopping U.S. senator into images

(Hal Brindley - Dreamstime)
Enderby farmers caught between coyotes and bylaw tickets

The Smith family is stuck in a Catch-22 between protecting their livestock and incurring noise complaints

A 75-year-old aircraft has been languishing in a parking lot on the campus of the University of the Fraser Valley, but will soon be moved to the B.C. Aviation Museum. (Paul Henderson/ Chilliwack Progress)
Vintage military aircraft moving from Chilliwack to new home at B.C. Aviation Museum

The challenging move to Vancouver Island will be documented by Discovery Channel film crews

The North Okanagan Naturalists' Club completed its annual swan and eagle counts Sunday, Jan. 17, 2021. (Claude Rioux - NONC photo)
North Okanagan bird count shows decrease in swan and eagle numbers

Trumpeter swans were down 61 per cent from last year’s count; eagles down 14 per cent

Lake Country firefighters helped deliver a healthy newborn baby Thursday, Jan. 21, 2020. (Pixabay)
Lake Country firefighters help deliver baby boy

Firefighters from the Winfield hall assisted with the birth of a healthy newborn Thursday morning

A video posted to social media by Chilliwack resident Rob Iezzi shows a teenager getting kicked in the face after being approached by three suspects on Friday, Jan. 22, 2021. (YouTube/Rob i)
VIDEO: Security cameras capture ‘just one more assault’ near B.C. high school

Third high-school related assault captured by Chilliwack resident’s cameras since beginning of 2021

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Skaha Middle School
Arrest made in indecent acts near South Okanagan schools

A 32-year-old man was arrested and released on strict conditions, say police

FILE - In this Feb. 14, 2017, file photo, Oklahoma State Rep. Justin Humphrey prepares to speak at the State Capitol in Oklahoma City. A mythical, ape-like creature that has captured the imagination of adventurers for decades has now become the target of Rep. Justin Humphrey. Humphrey, a Republican House member has introduced a bill that would create a Bigfoot hunting season, He says issuing a state hunting license and tag could help boost tourism. (Steve Gooch/The Oklahoman via AP, File)
Oklahoma lawmaker proposes ‘Bigfoot’ hunting season

A Republican House member has introduced a bill that would create a Bigfoot hunting season

Most Read