Regulations amending the employment insurance regulations
As previously announced, the 2016 Budget announced changes to the Employment Insurance Act (EI Act) to reduce the employment insurance (EI) waiting period from two weeks to one week that would be effective on January 1, 2017.
The change to the EI waiting period impacts employers who offer benefit plans where they interact with the EI program, such as:
- EI Premium Reduction Program (PRP); and
- EI Supplementary unemployment benefit plans (SUB)
The draft regulation amends the waiting period for both the PRP and SUB plans to align with the new reduced waiting period and provide a transitional period to allow employers to adjust their plans while minimizing the impact on employees.
The Transitional Period
- 4 year transitional period that ends on January 3, 2021; and
- Applies only to PRP and SUB plans in place prior to January 1st 2017.
The Transitional period does not apply to plans that do not qualify under a PRP or SUB plan.
A transitional period allows affected employers to continue to qualify for participation in the PRP and continue to receive a premium reduction;
Employers that choose to update their plans would be required to resubmit their adjusted plan to remain in the PRP. In the absence of resubmitting adjusted plans, employers would cease to qualify for a premium reduction effective January 3rd 2021.
During the transitional period the provisions would increase the maximum amount of combined employer and EI payments that claimants may receive in the week following the one-week waiting period without reducing their EI benefits.
- For illness/accident plans
Meaning the payment in the week following the waiting period may exceed 95% of the employees normal weekly earnings); and
- For Maternity Leave, leave for care of a child and compassionate care leave
Meaning the payment in the week following the waiting period EI benefits would not be reduced if the combined payments would exceed the allowable limits.
All new PRP and SUB plans effective on or after January 1st 2017 would need to comply with the new 7 day waiting period.
Government of Canada is expected to communicate with affected employers, particularly those participating in the PRP.
More information will follow.