Posted in:Health & Safety
The outbreak of the novel coronavirus SARS-CoV-2, which causes the illness COVID-19, has thrust business leaders into wildly uncharted territory. We simply have not seen this disruption happen in recent history. Yet, if you were to go back in time you will find that humanity has survived many pandemics in the past in different ways. We hope that mention of history will give some hope to business owners as they navigate these uncertain times.
Over the past few months we have seen many businesses have been forced to temporarily close. Almost all businesses have seen a sudden and drastic drop in their revenue, but there are still positive stories of success. They are just muted in the mix right now.
The following is meant to provide actionable help to those businesses that need a hand to lift them up and out of the storm. Many are in jeopardy of not surviving this crisis, but we want to make it clear that there is help available. Please just ask for help. Our team is business as usual, so we are ready to walk through action steps to help struggling leaders take care of their team and keep their businesses alive.
Business leaders understandably have many questions about how they can continue to support their employees during this period – or how they can keep their operations afloat.
A variety of wide-ranging government assistance programs have been announced, and employers may find all the new information overwhelming. We can help you navigate your way through it to determine the best timing for when you should apply for each program and prepare the appropriate documentation, so you don’t accidentally open yourself up to future legal claims if you get it wrong. You don’t want to fight so hard to stay alive only to be crippled by a future lawsuit. Not everyone will get through this calamity on a good note and opportunists will be there to take advantage of the mistakes you make. Please heed this warning, we are seeing a lot of missteps. Most mistakes can be fixed, don’t sweep them under the rug since that is not always the best decision.
Below is an overview of the measures available to Canadians. If you’d like more information, don’t hesitate to contact us at 1-403-470-5350 or [email protected]niva.com.
Subsidies for Employers
1) Temporary Wage Subsidy
You are eligible to receive this wage subsidy (March 18, 2020 – June 19, 2020) up to $1,375.00 for each employee. A maximum cap of $25,000 per employer still applies to this program.
No application is required. Simply, calculate 10% of gross earnings per employee. Reduce your remittance to the CRA by that amount. Keep a record of the calculations and account for it properly in your accounting records.
2) Canada Emergency Wage Subsidy
This is a different program that will run between March 15, 2020 – June 16, 2020, alongside the Temporary Wage Subsidy. There is a maximum benefit of $847.00 per week for each employee, wherein the intention is to provide 75% of their weekly earnings before the pandemic started. The actual benefit will be based on individual income levels.
This program does require an application each month through your myBusiness CRA Account. You must be able to demonstrate a Year-over-Year decrease of at least 30% in gross revenues.
If you want to pursue both, you will need to reduce your Canada Emergency Wage Subsidy by the amount of your Temporary Wage Subsidy. Essentially, you would be capped at 65% on this one if that is the case.
In certain sectors, employers are having to consider temporary layoffs. Despite the current situation, employers must adhere to existing legislation surrounding layoffs, notice, severance, and more. As with any steps you take, please be careful that you don’t expose your business to legal risks, such as constructive dismissal or wrongful dismissal. Honiva can walk you through your options and obligations if you are considering temporary or permanent layoffs. Be aware you may accidentally trigger termination obligations if a recall does not happen before the end of the temporary layoff period. For employers that have not gone down this route yet, we can show you how to extend the layoff period to enable you to have a longer timeframe to figure out how to reposition your business model.
14 Day Quarantine Leave
Earlier, the federal government also waived the doctor’s note/medical service and requirement to work at least 90 days with an employer.
Again, since it is a type of time off you must be careful in your documentation. It is also important to note that even though the above requirements have been waived, there are other requirements that were not waived which is causing some employees to fall through the cracks.
Employees would have to apply for EI Sickness Benefits through this route as it is classed under the Critical Illness leave category in the Alberta Employment Standards Act.
Employees who are facing a temporary or permanent layoff can apply for EI Regular Benefits. Please note, employees are still held responsible for following all program requirements.
Canada Emergency Response Benefit
Should applications for EI be declined, Canadians can apply for the Emergency Care Benefit and/or Emergency Support Benefit through the CRA. This is being combined into the Canada Emergency Response Benefit (CERB), which will give employees $2,000 per month for a period of 4 months. It is expected to open for applications on April 6th.
It will be available on the myCRA account for individuals and businesses, as well as its own application portal online. For employees who have applied for EI benefits since March 15th their applications will be rerouted to this new program, but a good idea to keep an eye on it.
There are also plans for employees who are declined for EI benefits to be automatically considered for the CERB, but that was not verified. It is best to call Service Canada to ensure the file is evaluated by the CRA, who are administering the CERB.
Employees can apply for this financial aid until October 3rd, 2020. Should your employees apply for this benefit, you may not be eligible as a business owner. It is a good idea to talk with your team to understand each person’s situation.
Here to Help
If you are struggling during this trying time, Honiva Consulting Ltd. is here to help. If you have questions surrounding how to manage your staff during this time, are unsure of financial aid programs and employee management options to keep your business afloat, or need help navigating swiftly-changing labour legislation, do not hesitate to contact us.
At this time we are extending our payment terms to enable business owners the flexibility they need to navigate the new unknown and receive the information they need to make critical decisions without exposing themselves to legal risks that could derail future recovery and rebuilding efforts.
We can be reached for a free confidential consultation at +1-403-470-5350 or [email protected].