Employers may need to revisit rules on insurance benefits, unpaid leaves
Recently passed amendments to employment insurance (EI) and federal labour standards laws may require some employers to revise their benefit policies. In addition, federally regulated employers will have to adapt to new rules for enforcing labour standards.
The changes are part of federal Bill C-44, the Budget Implementation Act, 2017, No. 1, which received royal assent on June 22. At the time of writing, most of the act was not yet in force.
The act implements a number of measures proposed in this year’s federal budget. In addition to the EI and Canada Labour Code amendments, it includes income tax changes that will permit
employers to deliver T4s to employees electronically without their prior consent and that will eliminate a home relocation loan taxable benefit deduction in 2018.
The federal government says the amendments to the Employment Insurance Act will provide more flexibility for people taking time off work for family-related leaves. One of the changes will allow individuals the option of receiving EI parental benefits over a longer period than they do now, but at a lower benefit rate.
EI claimants will be able to choose to receive up to 35 weeks of benefits, paid at a rate of 55 per cent of their average insurable weekly earnings, up to a maximum amount, or up to 61 weeks of benefits, paid at 33 per cent of insurable weekly earnings.
Another amendment will allow EI maternity benefits to begin up to 12 weeks before a claimant’s due date rather than the current eight weeks.
Other EI changes will create a 15-week benefit for employees who take time off work to care for a critically ill adult family member and will expand eligibility for receiving EI benefits for caring for a critically ill child to include family members beyond the child’s parents.
For employers, the changes may require adjustments to benefits and/or leave policies to harmonize them with EI. For instance, organizations that offer top-up payments to EI benefits may want to review their policies to determine if they have to adjust the level of payment or the period over which they make payments.
To align federal labour standards with the EI changes, Bill C-44 makes a number of amendments to the Canada Labour Code including:
• increasing the maximum length of unpaid parental leave from 37 weeks to 63 weeks
• extending the period when an employee may take parental leave from 52 weeks after a baby is born or a child comes into the actual care of the employee to 78 weeks
• extending the period for when a maternity leave may begin from 11 weeks before the estimated date of birth to 13 weeks
• creating a 17-week unpaid leave for employees who need to provide care or support to an adult family member who is critically ill
• allowing employees to take time off work to care for a critically ill child who is a family member (previously only the child’s parents could take the leave)
• specifying that nurse practitioners may issue medical certificates verifying the need for leaves for compassionate care, a critically ill child, and a critically ill family member.
Employees are only eligible for the new leave if they have worked for their employer for at least six consecutive months before requesting it. They will also need to present a certificate from a medical doctor or nurse practitioner confirming that the family member is critically ill and requires their care or support, and for what length of time.
Employees will be required to give their employer at least four weeks’ notice in writing of the leave unless they have a valid reason for not being able to do so. Employees will not be allowed to take the leave in periods of less than one week.
As with other unpaid leaves allowed under the code, employers will have to maintain employees’ pension, health and disability benefits while they take the leave for a critically ill family member, provided that the employees continue to pay any contributions that would normally be paid.
When the leave is over, the employer will be obligated to reinstate employees in their previous job or, with a valid reason, in a comparable position at the same location and with the same wages and benefits.
Employers will be prohibited from dismissing, suspending, laying off, demoting or disciplining employees because they take or intend to take the leave. The code will also prevent employers from taking the leave into account when making promotion or training decisions.
Federally regulated employers who match their unpaid leave policies to the minimum standards in the code will need to revise them to ensure that they comply with the law. Employers with policies that have traditionally offered more than the minimum standards should review them to determine if they need to make any changes.
Employers may also need to revise their record-keeping policies to incorporate the new standards.
While the CLC amendments only affect federally regulated workplaces, other employers should pay attention to them. Provinces and territories also often revise their labour standards laws to harmonize them with EI changes. Alberta has already indicated that it is considering increasing its parental leave rules to align them with the EI changes. Other jurisdictions are also likely to do so.
Bill C-44 also revises the CLC’s compliance and enforcement tools, including new administrative monetary penalties.
For instance, when issuing payment orders to employers to recover unpaid wages, the labour ministry will be able to charge a fee of $200 or 15 per cent of the amount due, whichever is greater. The ministry will refund it if the payment order is later rescinded after a review or an appeal.
The purpose of the fee is to encourage employers to pay outstanding wages as soon as possible after an employee files a complaint and before the ministry issues a payment order, said Charles-Philippe Rochon, acting manager of the Labour Standards and Wage Earner Protection Program at Employment and Social Development Canada (ESDC).
“We are aware that there have been circumstances where certain employers, perhaps more unscrupulous, would actually try to delay the process and, therefore, wait for a payment order to be issued and then ask for their full review, appeal, etcetera, which can take quite a bit of time,” he said when appearing before a House of Commons committee studying Bill C-44 in the spring.
“The objective here is to create an incentive so that, if employers actually do owe wages, they pay them up as soon as possible.”
Another change will give the ministry the authority to publish information about employers found guilty of an offence or a violation of occupational health and safety or labour standards requirements.
“The type of information that could be published would also be spelled out in regulation after consultations with stakeholders, but could include, for instance, the employer’s name, the nature of the violation or offence, and the associated penalties,” Eric Advokaat, senior director of Occupational Health and Safety in the Labour Program at ESDC, told the committee. “Information would be published only once all review and appeal processes have been exhausted.”
Other amendments include extending the period for recovering unpaid wages from 12 months to 24 months and giving the labour minister the power to order an employer to conduct an internal audit, including reviewing its payroll records, to determine if it is complying with labour standards rules.
Employers would have to report to the ministry within a specified period and indicate what measures they took to address any areas where they were not in compliance.
To give employers time to adjust to the enforcement amendments, Rochon said he expects ESDC to phase-in the changes over a 36-month period.
“This would provide time for consultations with stakeholders to develop the required regulatory amendments,” he said. “It would also give time to design and develop the new compliance and enforcement regime, and educate employers, employees, and others.”
