Employment Insurance: A Canadian Employer’s Guide

Employment Insurance (EI) provides benefits to employees who are looking for work after they lose their jobs through no fault of their own—for example, being laid off. It also provides benefits to workers who need to take time off work due to specific life events including illness, pregnancy, caring for a newborn, or a critically ill or injured person.

As an employer, you play an important role by meeting your responsibilities regarding the EI program. Here is everything employers need to know about employment insurance.

When does an employee qualify to receive EI?

Workers receive EI benefits if they have paid premiums in the past year and meet qualifying and entitlement conditions.

How many hours do employees need for employment insurance?

Based on the unemployment rate in your area, employees need between 420 and 700 hours of insurable employment during the qualifying period to qualify for regular benefits.

Is employment insurance federally or provincially regulated?

The Employment Insurance program is regulated by the Government of Canada and is overseen by Employment and Social Development Canada. The payments that employees receive are taxable income and are, where applicable, deducted from federal and provincial or territorial taxes.

Records of employment (ROE)

The most important thing you need to know as an employer about Employment Insurance is issuing a record of employment (ROE). As an employer, you must issue records of employment for employees who have received insurable earnings and who experience an interruption of earnings when they stop working.

Deducting and remitting EI premiums

As an employer, you need to subtract EI premiums from each dollar of your employees’ insurable earnings, up to a yearly maximum. You must also contribute 1.4 times the amount of EI premiums that you take away from your employees’ pay.

Am I entitled to a reduction in my EI premium? h2

If you provide your employees with a short-term disability plan that meets certain requirements, you may be entitled to pay an EI premium rate through the EI Premium Reduction Program that is lower than the standard employer rate.

Like the EI waiting period, short-term disability plans registered with the Premium Reduction Program may have an elimination period before the payment of benefits.

Can I provide supplemental EI benefits?

Employers can provide supplemental payments to increase employees’ revenue while they’re receiving EI benefits. Supplemental payments aren’t deducted from employees’ EI benefits when certain requirements are met.

The two types of supplemental payments employers can provide are:

• supplemental payments provided through the Supplemental Unemployment Benefit (SUB) Program to employees receiving EI benefits during a period of the temporary stoppage of work, training, or illness
• supplemental payments provided to employees receiving maternity, parental, compassionate care, or family caregiver benefits

What are EI sickness benefits?

EI sickness benefits are designed to provide employees with financial assistance if they can’t work for medical reasons.

How much can an employee receive from sickness benefits?

Employees can receive 55% of their earnings up to a maximum of $650 a week.

How many weeks of sickness benefits are federal employees entitled to in Canada?

Employees with claims that began before December 18, 2022 are entitled to up to 15 weeks, while those who submitted claims on or after December 18, 2022 are entitled to up to 26 weeks.

What does an employee need to qualify for sickness benefits?

To be eligible for sickness benefits, employees must get a medical certificate showing that they’re unable to work for medical reasons and for approximately how long. Medical reasons include illness, injury, quarantine or any medical condition that prevents them from working.

Is paid sick leave mandated by law in Canada?

Paid sick leave (medical leave with pay) is a paid job-protected leave under Part III of the Canada Labour Code that provides federally regulated private sector employees with up to 10 days of leave per year. That said, paid sick leave is not mandated in all jurisdictions and employers should check with their local province for specific guidance.

Do you need help keeping your business compliant with federal legislation?

Get expert advice on Employment Insurance and other federal legislation with Peninsula. Our HR experts can assist you with company policies, and with any other HR, health & safety or employment matters that arise. To learn more about how our services can benefit your business, call an expert today at 1 (833) 247-3652.