Since our last update on April 21, 2020, a number of significant changes have been announced to the Canada Emergency Wage Subsidy ("CEWS"). As our regular readers are likely already aware, the CEWS is intended to allow employers facing financial challenges to keep employees on payroll and recall those employees who have already been laid off as a result of the COVID-19 pandemic – even if unable to actively perform work for the employer. The CEWS was initially made available for a period of 12 weeks, ending June 30, 2020, with the potential for further CEWS claim periods to be added by regulation until September 20, 2020.
On May 15, 2020, it was announced that the CEWS would be initially extended to August 29, 2020. The Federal government has now proposed a further extension of the CEWS through December 19, 2020 and made certain changes to the program, in part easing eligibility criteria for employers.
Effective July 5, 2020, the CEWS would consist of two parts:
- A base subsidy available to all eligible employers that are experiencing a decline in revenues, with the subsidy amount varying depending on the scale of revenue decline; and
- A top-up subsidy of up to an additional 25 per cent for those employers that have been most adversely affected by the COVID-19 crisis.
For the next two qualifying periods (July 5 – August 1, 2020; August 2 – 29, 2020), a safe harbour provision will ensure that an eligible employer would be entitled to a CEWS rate not lower than the rate that they would be entitled to if their entitlement were calculated under the CEWS rules that were in place for Periods 1 to 4.
For full details on the updated CEWS, see the government's backgrounder here.
The team at CCPartners will continue to update our readers and listeners on the CEWS, and all other pertinent developments regarding benefits and legislative changes related to COVID-19 through our Employers' Edge Blog and Lawyers for Employers Podcast series.
Originally published July 21, 2020.
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