In 2012, the federal government passed Bill C-38, the Jobs,
Growth and Long-term Prosperity Act, which among other things
amends the Canada Labour Code (the Code) to implement
insurance requirements for long-term disability (LTD) plans in the
federally-regulated private sector, as previously discussed
Federally-regulated employers (that is, those in industries such
as telecommunications and banking) will be required to obtain
insurance for any LTD plans they offer to employees, thus providing
employees on disability with some protection should the employer
become bankrupt. The new provisions will come into force on July 1, 2014.
The LTD insurance provisions will apply on a prospective basis
only, which means that employers will not have to insure LTD
benefits for any employees who are in receipt of LTD benefits on
July 1, 2014, nor insure such benefits for any employee where the
employee has made an application for LTD benefits before that
Regulations related to the new provisions, yet to be released,
will provide certain exemptions to the insurance requirements for
LTD plans sponsored by federally-regulated employers.
In order to ensure compliance with the new LTD insurance
requirements as well as other provisions of Part III of the Code,
the penalty provisions of the legislation are also being amended.
For instance, the maximum fine for most Part III violations will
increase from $5,000 to $250,000, while the maximum fines for
failing to comply with an order to pay arrears of wages under Part
III will increase from $100 to $1,000 per day.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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