COVID-19 Financial Relief – Part 10: Expanded Work-Sharing Program
AF Accounting helps Canadians understand and apply for the COVID-19 relief programs offered by the Government of Canada and its partner organizations. Parts 1-9 covered the: CERB, CEBA, extended tax deadlines, taxation of the CERB, CECRA, BCAP, LEEFF, CEWS, and the NBRF. This post talks about the expanded work-sharing program.
What is the work-sharing program?
The work-sharing program, or WS, is an important tool for Canadian employers because it helps avoid layoffs during times of temporary decreased or interrupted business activity. However, this decrease must be beyond the control of the employer and not related largely to poor management during a normal economic cycle. COVID-19 is a prime example of an unexpected temporary interruption.
Under the WS program, employment insurance (EI) is provided to qualifying employees that are willing to work reduced hours. This way, more employees can work part-time instead of being laid off. A reduced salary is paid by the company, and the employee also receives support from EI.
Why is the work-sharing-program important?
While layoffs may seem like an obvious solution when times of work are slow, layoffs can result in good employees leaving to seek other opportunities. It takes a lot of investment to hire, train, and onboard new employees – and even fully qualified new employees can only work at approximately 25 per cent of their full efficiency during their first four weeks on the job. The time and money spent to constantly hire and train new talent can devastate a business, let alone the loss of skills and knowledge built up by being a long-term employee. The work-sharing program benefits all Canadians as it provides for a more stable business structure, which is important for both the company and its employees and their families.
What is the work-sharing program extension?
The work-sharing program typically runs for 38 weeks. During this time when COVID-19 continues to take a toll on businesses across Canada, the work-sharing program has been extended to run for 76 weeks (for employers directly affected by the pandemic).
This is a long-running extension that takes place from March 15, 2020-March 14, 2021, and it is open to all sectors and industries.
During the extension, the mandatory cooling off period is waived. This cooling-off period is defined as the time the employer is prohibited from using the WS program with the same employees for certain length of time.
Typically, eligibility for the WS program is for companies in business for at least two years, but during the expansion, those with one year of operations can apply.
How AF Accounting Helps
AF Accounting helps individuals and businesses sort through the variety of COVID-19 programs available, while also helping with taxes, accounting, bookkeeping and more. With extended filing deadlines and some benefits being taxable, we know you have questions and concerns right now. AF Accounting helps you with information, advice, and professional accounting services. Contact us today to learn more.