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Poor employer participation in the Canada Emergency Wage Subsidy (CEWS) has led Unifor to call for an overhaul of the program, designed to keep workers on company payrolls during the COVID-19 crisis.
“The slow uptake by employers is consistent with Unifor’s experiences, which has seen employers large and small drag their feet in coming to a decision on whether or not to apply for the CEWS,” stated the union in its submission to the Department of Finance Canada.
The CEWS would cover 75 per cent of eligible employees’ earnings up to a maximum of $847 a week, even if they are currently not working due to pandemic conditions. The goal of the wage subsidy was to enable companies to re-hire workers previously laid off as a result of COVID-19, help prevent further job losses, and make it easier to reactive employees as restrictions ease.
Applications opened in late April but due to lack of employer registration, only a tenth of the $76 billion CEWS budget had been spent by late May with the projected costs subsequently being revised downwards to $45 billion.
“CEWS was meant to keep workers connected to their employers during this crisis while providing a higher wage benefit than EI or the CERB,” said Unifor National President Jerry Dias. “However, the vast majority of layoffs had already occurred before the subsidy launched so it’s been an uphill battle to convince employers to rehire already laid-off employees.”
One of the largest stumbling blocks when encouraging employers to apply for the CEWS has been the unsubsidized costs of maintaining workers on paid leave, including paying health insurance premiums and other non-taxable benefits to workers, which are not currently designated as eligible remuneration under the terms of the CEWS program.
Additionally, the subsidy is paid as a reimbursement of wages, a disincentive for employers to rehire laid off employees given the initial outlay of wage costs required.
Unifor’s submission also warned about eligibility barriers to accessing the program, the pitfall of allowing employers to average weekly hours, and the need to inform CEWS recipients of the obligation to continue statutory payroll deductions, including union and other dues.
Given the inherent financial disincentives and limitations of the CEWS program, as currently structured, Unifor has recommended that the government make the following amendments to the program:
- Include health premiums, pension contributions and other non-taxable benefits in the definition of eligible remuneration.
- Extend eligibility to the broader public sector, including post-secondary institutions and municipal transit authorities.
- Reduce the required revenue decline threshold to 15 per cent across all claim periods.
- Provide clearer guidance to CEWS applicants on the need to make statutory deductions, including union dues.
- Co-ordinate with provincial governments to alleviate or refund statutory employer health taxes and workers’ compensation premiums for employees on paid leave.
- Prevent employers from averaging pay on a biweekly basis and enforce weekly reporting of remuneration.
- Allow employers to use projected revenue shortfalls and apply for the CEWS claim period in advance.
- Develop a mechanism to provide supplementary payroll support to employers in sectors which have yet to reopen or which continue have a large proportion of workers on layoff.
- Ensure that all laid off employees are able to access their supplementary unemployment benefit (SUB) plans, whether or not they are receiving the CERB benefit.
