Applicant Guide
D. Other Considerations
i. Work-Sharing Benefits
Participants do not have to serve a two-week waiting period for Work-Sharing benefits. However, as these benefits are processed through the Employment Insurance payment system, it may take a few weeks after the employer has submitted the first Utilization Report (see section G, subsection ii for further information) for the first cheque to arrive. It is important that you advise your employees of this delay in the initial receipt of Work-Sharing benefits.
The benefits payable are based on the employee’s normal average weekly earnings, as calculated at the start of the agreement. If the employees work irregular hours, the average weekly wage is calculated by averaging the hours worked per week over the two years preceeding the application.
During the Work-Sharing agreement, the employer may request an employee to work on a Work-Sharing day. The employee is required to report to work as work becomes available.
Earnings received in any week by a Work-Sharing participant, from sources other than Work-Sharing employment, that are in excess of an amount equal to 40% of the participant's weekly benefit rate, or $75 (whichever is greater), shall be deducted from the Work-Sharing benefits payable in that week.
ii. Taxation
Please ensure that all employees are made aware of the following tax implications of receiving Employment Insurance benefits:
Tax Deductions
Tax deductions for Employment Insurance Work-Sharing benefits are determined from the information the claimant provides in the Income Tax section of the Employment Insurance application; the amount of tax deducted is specific to the claimant's province, personal tax situation and benefit rate.
The Employment Insurance benefits received by Work-Sharing participants are taxable, however because of the weekly amount of benefits paid, taxes are not always withheld at source. Participants may wish to have their income tax deductions increased in order to avoid having to pay a large amount of income tax at year-end.
This request can be made by phone, mail or in person.
Employment Insurance and Repayment of Benefits at Income Tax Time
At the time the participant files their income tax return, depending on their net income, they may be required to repay some of the Employment Insurance benefits received. Benefit repayment requires claimants with a net yearly income exceeding a specified threshold to repay a percentage of the Employment Insurance regular benefits received during the tax year.
Example:
If the 2012 net income from all sources exceeds $57,375 the claimant may be required to repay 30% of the lesser of:
- net income in excess of $57,375 ; or
- the total regular benefits paid in the taxation year.
Exemptions apply in certain circumstances. For more information on repayment of benefits at income tax time please visit: Employment Insurance (EI) and Repayment of Benefits at Income Tax Time - Year 2012.
iii. Employee Benefits
The employer must maintain all existing employee benefits for the duration of the Work-Sharing agreement. Also, any statutory holidays occurring within a Work-Sharing period are not compensated by Employment Insurance benefits and are the responsibility of the employer.
iv. Workforce
Businesses are not allowed to increase their workforce during a Work-Sharing agreement, but may replace core-employees who choose to leave. Note: For businesses with multiple departments, the departments that are not participating in Work-Sharing (i.e. no employees form part of a Work-Sharing unit) may increase staff as required.
v. Subsequent Application for a Work-Sharing Agreement
Employers must serve a mandatory waiting period before they are eligible to begin a new Work-Sharing agreement involving the same employees who participated in a previous Work-Sharing agreement. The waiting period is equal to the number of weeks of the previous agreement, up to a maximum of 38 weeks. Note: If the previous agreement was signed for 26 weeks but terminated early at week 20, the waiting period would equal 20 weeks.
Employers may submit an application for a new Work-Sharing agreement involving a different group of core employees at any time (i.e. no mandatory waiting period). Employers must demonstrate that the work shortage is caused by new unforeseen and uncontrollable circumstances.
vi. Training Activities
Employer initiated training activities, whether on-the-job training or off-site courses, may take place during the period of the Work-Sharing agreement. The salary costs of employees taking part in training activities during normal scheduled working hours/days cannot be compensated by Service Canada. Training could take place during the non-working days/hours for which the employees are in receipt of Work-Sharing Employment Insurance benefits; however, attendance would be optional.
vii. Agreement Monitoring
All Work-Sharing agreements are monitored at least once by Service Canada.
The purpose of monitoring is to determine the extent to which the objectives of the Work-Sharing program are being achieved and to ensure the Work-Sharing agreement is implemented as agreed to by all parties. Monitoring increases the likelihood that the agreement will succeed by providing on-going opportunities to support the employer and plan for any needed adjustments.
The Service Canada Program Officer will contact the employer and employee representatives directly. Employers may be asked to provide payroll records. Some Work-Sharing agreements may be subject to an on-site monitor involving a visit by Service Canada officials to the employer’s premises.
During the Work-Sharing agreement, the employer must regularly report the total hours worked, the hours missed due to participation in Work-Sharing and hours missed due to any other reasons for each member of the Work-Sharing unit via a weekly Utilization Report. The Utilization Report submitted by the employer is necessary for the payment of Work-Sharing benefits and is the primary method of monitoring a Work-Sharing agreement. Please refer to section G, subsection ii of this guide for further information on the weekly Utilization Report.