COVID-19 is causing a wave of uncertainty for employers in Canada. They are unsure how to handle people going into quarantine, and how to pay and maintain their employees in the long term. This post will address Government of Canada payroll subsitities, filing an ROE and a brief resource on the Work-Sharing program.
A ROE needs to be issued anytime there is an interruption in earnings of 7 days. This means that the employee has no insurable earnings or an employees salary falls below 60% of their regular earnings. This now includes when an employee needs to be in quarantine.
When filing an ROE for COVID-19 there are a couple different codes that can be used, depending on the reason for filing. Note, do not put notes on your ROE when filing. This will slow down the processing of it.
- Shortage of Work – Code A – If you need to lay off your employees, use this code.
- Absent due to illness – Code D – This includes quarantine or ordered self-isolation
- Leave of absence – Code N – An employee is unable to work, this can include if they need to take time off due to daycares closing
- Work Sharing – Code H
Quarantined Employees are eligible for EI Sick benefits from Service Canada, and these claims will be top priority for Service Canada right now.
- The one week waiting period will be waived for people in Quarantine
- No medical certificates will be required
- If you can’t complete the application, it will be backdated once you are able to.
Services can be accessed either online or by calling 1-800- O Canada
Work sharing is a program administered by Service Canada that works with employers to help avoid layoffs. In this program, employees are provided income support by Service Canada to temporarily reduce their work week. In order for this program to work, employees, employers, and Service Canada need to reach an agreement.
If you think this might be an option for your workplace, you can access more information here.
Temporary Wage Subsidy
The Government of Canada has introduced a temporary wage subsidy to help Canadian employers during the COVID-19 pandemic.
You are eligible if :
- You are a non-profit organization, registered charity, or corporation eligible for the the small business deduction
- Have an existing business number
- Currently pay remuneration to an employee
This subsidy is for all remunerations paid between March 18, 2020 and June 20, 2020.
It is 10% of the calculated payroll amount, for example if your total monthly payroll was $20,000, it would be $2,000 in eligible subsidy. The calculation must be done manually.
In the 3 month period, employers are allowed a maximum of $1,375 per employee and $25,000 per employer. If you have only a couple employees, you will not reach the $25,000 maximum. For example, if you have 6 employees, you would have a maximum subsidy of $8,250 ($1,375 x 6).
It is important to note that this subsidy can only be used against income tax deducted from employees. You may not reduce the CPP or EI remitted to the government. Therefore you may have excess subsidy available to use in future periods.
Do not reduce the amount of taxes taken from your employees, keep doing their payroll as normal. This is an employer subsidy and will be applied when you pay your payroll remittances.