What payroll needs to know about Quebec’s new parental leave

Beginning next year, Quebec residents will have their own parental leave program separate from the federal EI program

Beginning in January, the province of Quebec will offer a new Quebec Parental Insurance Plan (QPIP) for provincial residents. The new plan will provide eligible workers in Quebec with maternity, paternity, parental and adoption benefits.

Quebec residents, like Canadians in other parts of the country, are currently covered by similar benefits under the employment insurance (EI) program that Human Resources and Skills Development Canada administers. However, the new QPIP will offer paternity benefits, which the EI program does not, and it will provide more options for benefit payments.

Once the plan is in force, eligible workers in Quebec will continue to have access to other types of federal EI benefits, for instance regular, sickness, and compassionate care benefits.

All employers, employees and self-employed workers in Quebec will be required to pay premiums to help cover costs of the program. Starting on Jan. 1, 2006, employers will deduct QPIP premiums from employees’ salary or wages and remit the amount, along with the employer’s premium, to Revenu Québec when they send in their remittances for provincial income tax deductions and Quebec Pension Plan contributions.

Employers will have to deduct QPIP premiums from the salary and wages paid to employees who report for work at the employer’s establishment located in Québec, and from those whose salary and wages are paid through the employer’s establishments in Québec if the employees are not required to report for work at the employer’s establishment.

Self-employed workers will be required to pay their contribution to Revenu Québec when they file their 2006 personal income tax return.

QPIP premium rates announced

The premium rate for employees will be 0.416 per $100 of insurable earnings and the premium rate for employers will be 0.583%. For self-employed workers, the premium rate will be 0.737%.

The government published the final regulations for the QPIP rates in the Quebec Gazette, Part 2 (November 2, 2005).

Federal employment insurance premium rates

Since Québec residents will still be covered under the federal EI program for other types of benefits, employers and employees in the province will still have to pay EI premiums, although their premium rate will be lower than in other parts of Canada. For 2006, the employee EI rate for Quebec residents is proposed to be 1.65%, while the rate for employees in the other provinces is expected to be 1.95%, up to an annual maximum of $39,000 of insurable earnings.

The employer premium rate will remain at 1.4 times the employee premium rate unless the employer has an approved reduced EI rate. For EI premiums, Quebec employers will continue to send the deductions to the Canada Revenue Agency (CRA), along with their federal income tax deductions.

The CRA will provide EI deduction tables for Quebec, and will revise the Table on Diskette (TOD) to include the Quebec EI deductions for Jan. 1.

Record of Employment (ROE)

Although Revenu Québec will collect QPIP premiums, the Ministère de l’Emploi et de la Solidarité sociale will be responsible for administering the new plan. It has established the Conseil de gestion de l’assurance parentale to manage it.

One of the ministry’s responsibilities will be to determine who is entitled to benefits. To do this, it will use information employers report on the existing federal Record of Employment (ROE). This will allow employers in Quebec to continue using the same form to report an interruption of earnings under the QPIP as they do now for EI purposes.

QPIP benefit entitlement

The benefits provided under the QPIP differ from those offered under EI in terms of the benefit rates and the number of weeks of benefits. In addition, the QPIP will not require a waiting period before the benefits are payable.

Eligible individuals in Quebec will have the option of either collecting a higher amount of benefit for a shorter period or collecting a lower amount of benefit for a longer period:

•Maternity benefits my run either 15 weeks (with benefits paid at 75% of average gross weekly income) or 18 weeks (with benefits at 70%).

•Parental benefits may run either 25 weeks (with benefits paid at 75%) or 32 weeks (with benefits paid at 70% for the first seven weeks and at 55% for the remaining 25 weeks), which can be shared, taken concurrently or just by one, as agreed between the parents.

•Adoption benefits may run either 28 weeks (with benefits paid at 75%) or 37 weeks (with benefits paid at 70% for the first 12 weeks and at 55% for the remaining 25 weeks), which can be taken concurrently or just by one, as agreed between the parents.

•Paternity benefits may run either three weeks (with benefits paid at 75%) or five weeks (with benefit paid at 70%) benefit period.

Under the federal program, benefits are paid at a rate of 55% of average insured earnings, to a maximum of $413 per week in 2005. Maternity benefits are provided for up to 15 weeks, while parental benefits are provided for a maximum of 35 weeks.

To be eligible for QPIP benefits, individuals must meet the following criteria:
•the child must be born or adopted on or after Jan. 1, 2006;
•the employee must be a salaried worker or self-employed Quebec resident at the beginning of the benefit period (self-employed workers must also have been resident in the province on Dec. 31 of the previous year);
•the employee must have an interruption of earnings on the birth or adoption of a child; and
•the employee may work part-time or full-time, but must pay premiums into the plan and have insurable earnings of at least $2,000 (the same amount applies for self-employed income).

CRA revising T4 to incorporate QPIP

Employers will have to report QPIP premiums and insurable earnings when filing their year end forms with both the CRA and Revenu Québec.

The CRA has revised the T4 (Statement of Remuneration Paid) to incorporate the plan. It has added new boxes (55) and (56) for reporting Provincial Parental Insurance Plan (PPIP) premiums and PPIP insurable earnings, respectively. A new PPIP exempt code box has been inserted beside the current CPP/QPP and EI exempt boxes in box (28) to report exemptions.

The CRA has titled the boxes Provincial Parental Insurance Plan or PPIP instead of Quebec Parental Insurance Plan in case other provinces enact similar plan in the future.

Although the CRA has included the new boxes on the 2005 T4, it says employers filing 2005 returns should not complete the boxes. They only apply to employers filing 2006 returns in 2006. This could happen where an employer is declaring bankruptcy and is ceasing operations. The boxes will apply to other employers once they file 2006 returns for February 2007.

There will be no changes to the T4 Summary for QPIP reporting.

New boxes for 2006 RL-1 for Quebec reporting

Revenu Québec has not revised the 2005 RL-1 (Revenus d’emploi et revenues divers) to include any QPIP reporting requirements. It is planning to add two new boxes to the 2006 version of the RL-1, as well as move two items reported on the form. Employers would have to file the 2006 RL-1 in February 2007.

Revenu Québec is planning to use existing box (H) for reporting QPIP premiums, while insurable earnings would be reported in existing box (I). Benefits and allowances related to meals and accommodations, which are currently reported in box (H), would move to new box (V). Automobile benefit reporting would move from box (I) to new box (W).
Revenu Québec also plans to revise the “Summary of Source Deductions and Employer Contributions” (RLZ-1.S-V) for 2006 reporting to incorporate the QPIP.

For more information on contributions to the Quebec Parental Insurance Plan, visit the Revenu Québec website.

For more information on the QPIP, visit the Quebec Parental Insurance Plan website or call the Ministère de l’Emploi et de la Solidarité sociale at 1-888-610-7727.

For more information on the federal Employment Insurance program, visit the Department of Human Resources and Skills Development Canada website or call 1-800-206-7218.

Latest stories