Changes to Employment Insurance

The employment insurance (EI) waiting period: what it means for EI claimants

The Employment Insurance (EI) waiting period is the unpaid period just prior to the date on which a claimant may begin to receive EI benefits.  It has been set at two weeks since 1971. Shortening the waiting period is intended to ease the financial strain for EI claimants and will put an estimated additional $650 million in the pockets of Canadians annually.  As outlined below, there is no impact to claimants who exhaust their maximum entitlement to benefits.

Budget 2016 announced the EI waiting period would be reduced from two weeks to one week, effective January 1, 2017. The waiting period acts as a deductible similar to other kinds of insurance. As a result of legislative changes that came into effect on January 1, 2017, the waiting period is one week for claims starting on that date or later. For claims starting prior to January 1, 2017, the waiting period stays at two weeks. The reduction of the waiting period applies to regular, sickness, maternity, parental, compassionate care, and parents of critically ill children..

This change does not affect the maximum number of weeks of benefits a claimant may receive. Furthermore, the measure does not change the timelines to process claims or receive the first payment.

The waiting period change may have indirect implications for employees and employers who have top-up arrangements that supplement EI. Depending on the specific language in employers’ top up plans, including the language contained in collective agreements, some employees may receive one week fewer of top-up payments, have a week of unpaid leave or even receive more in one of the weeks than either EI or a top up plan allows. This is a particular concern for maternity and parental benefits as many employees take 50 weeks of available EI benefits with some employers supporting an additional two-week period within the overall 52-weeks.

The waiting period change may also have indirect implications for employers who offer short-term disability plans and are granted an EI premium reduction. In some cases, EI eligible claimants may be entitled to one-week of EI benefits before benefits for claimants covered under an employer plan become payable.  To align with the EI one-week waiting period, the elimination period standard for qualifying short-term disability plans must be reduced to a maximum of seven consecutive days (from 14 days). The Government of Canada has taken steps to mitigate the potential impact on employers by providing until January 3, 2021, for them to adjust their short-term disability plans, should they wish to continue to qualify for the premium reduction.  This extension period applies only to plans that were established prior to January 1, 2017.

 

 

 

Example 1 – EI Regular benefits

Marianna, a single mother with two young children, recently lost her job in London, Ontario, at a local manufacturing facility. Fortunately, she qualifies for up to 38 weeks of Employment Insurance (EI) benefits, which will help with her living expenses while she looks for a new job.

After 12 weeks of searching, she found a new job.

With a reduced waiting period, Marianna will receive EI benefits for 11 of those 12 weeks instead of only 10 of those 12 weeks. As a result, she will receive more income support to keep up with important payments including food, rent and care for her children.

Example 2 – EI Maternity and Parental benefits

Neil and Sarah are expecting their first child in Kelowna, British Columbia. Both of them qualify for EI benefits and are applying for EI maternity and parental benefits. Sarah may access up to 15 weeks of maternity benefits, and they are eligible to share up to 35 weeks of parental benefits.

Sarah is planning to take all 15 weeks of maternity benefits and 30 weeks of parental benefits. Neil is planning to take 5 weeks of parental benefits after Sarah returns to work.

Sarah and Neil will receive the same number of weeks of benefits as they would have prior to the change to the waiting period. There are no changes to the Canada Labour Code.

Example 3 – EI Sickness benefits

Sandeep has slipped and broken his ankle while shoveling his driveway in Gatineau, Quebec. He has a medical certificate indicating that he cannot work while he is recovering. Sandeep is eligible for EI sickness benefits and is off work for six weeks.

With a reduced waiting period, Sandeep will receive EI benefits for five of those six weeks instead of only four of those six weeks, which will help him keep up with his expenses.


 

The employment insurance (EI) waiting period: what it means for employers

Budget 2016 announced the EI waiting period would be reduced from two weeks to one week, effective January 1, 2017. As a result of this change, consequential amendments to the Employment Insurance Regulations as they relate to employer supplementary benefit plans and the EI Premium Reduction Program (PRP) are also being made. Note, there are no changes to the timeframes in which employers are required to issue records of employment.

The waiting period change may have indirect implications for employees and employers who have top-up arrangements that supplement EI. Depending on the specific language in employers’ top up plans, including the language contained in collective agreements, some employees may receive one week fewer of top-up payments, have a week of unpaid leave or even receive more in one of the weeks than either EI or a top up plan allows. This is a particular concern for maternity and parental benefits as many employees take 50 weeks of available EI benefits with some employers supporting an additional two-week period within the overall 52-weeks. Employers are advised to review their plans and collective agreements to assess the cost impact as well as practical implications and thus whether they need to adjust the language to align it to the reduced waiting period.

The waiting period change may also have indirect implications for employers who offer short-term disability plans and are granted an EI premium reduction. In some cases, EI eligible claimants may be entitled to one-week of EI benefits before benefits for claimants covered under an employer plan become payable.  To align with the EI one-week waiting period, the elimination period standard for qualifying short-term disability plans must be reduced to a maximum of seven consecutive days (from 14 days). The Government of Canada has taken steps to mitigate the potential impact on employers by providing until January 3, 2021, for them to adjust their short-term disability plans, should they wish to continue to qualify for the premium reduction.  This extension period applies only to plans that were established prior to January 1, 2017.

If you are an employer participating in the EI Premium Reduction Program and/or providing supplemental payments to your employees, the changes may have an impact on you.

To find out if you may be impacted, please contact your Employee Benefits Consultant at The Leslie Group Limited.

Source:  Information above adopted from Service Canada

https://www.canada.ca/en/services/benefits/ei/waiting-period.html

 

Leave a Reply