Client Alert - New Parental and Maternity Benefits come into effect December 3rd

Reut Amit (12/06/17 )

The new Employment Insurance (“EI”) parental, maternity and caregiving benefits, proposed in the Federal Budget 2017, will come into force on December 3, 2017. [1]
The change will come into effect earlier than expected and brings with it significant implications for employers and workplace policies.

Parental and Maternity Benefits
Parents, including adoptive parents, will be able to choose at the time they apply for EI benefits, whether they would like:

  • the standard benefit of 35 weeks of EI parental benefits over a period of 12 months at 55% of their average weekly earnings, to a maximum of $543/week; or
  • the extended benefit option of 61 weeks of EI parental benefits over a period of up to 18 months at 33% of their average weekly earnings, to a maximum of $326/week.

Additionally, women will be able to begin to claim their EI maternity benefits earlier than under the previous regime, at up to 12 weeks before their due date.
While the new benefit regime will come into force on December 3rd, most BC employers have a little longer than that to revise and prepare their workplace policies. The reason being that EI benefits exist under federal legislation, while the employment standards legislation that ensures employers cannot terminate employees for taking such leave exists under provincial legislation. This means that until provinces update their employment standards legislation to ensure employees won't get fired for taking the leave they are permitted to take under the federal legislation, most employees[2] will not be able to take advantage of the new EI entitlements. Entitlements for job protected leaves for these employees continue under the applicable provincial employment or labour standards legislation. To date, the BC legislature has not made these changes.

Employers Should Take Note

Many employers have open-ended top-up policies in place whether in individual employment contracts or workplace policies, which provide that they will top-up an employee's EI benefit payment for the entirety of the parental leave. The problem is that the extended benefit option merely extends the same benefit payments over a longer period, resulting in lower weekly payments. If an employer has an open-ended top-up policy, they would be on the hook for a larger top-up payment than they bargained for. A full-top up would mean that at 12 months leave, employees would receive a maximum of 55% of their income in EI benefits and the employer top-up would be 45% for 12 months. Under the new legislation, if the employee takes the full 18 months, the employer would be on the hook for a top-up of 67% for 18 months. Employers who have top-up policies in place should review their policies immediately and have them revised accordingly.

These changes bring with them many other implications for the workplace, including how to structure the workplace in order to accommodate an extended leave and how to avoid discriminatory practices when the employee returns from parental leave.
 


[1] anyone applying for benefits prior to December 3rd will be subject to the previous EI regime and will not have the extended benefit option.

[2] those not working in federally-regulated industries governed by the Canada Labour Code.

 If you have any concerns about your policies, employment agreements and other workplace issues, please contact our Workplace Law Group Co- Chairs

Melanie Samuels at msamuels@singleton.com
Veronica Rossos  at vrossos@singleton.com
or Associate
Reut Amit at ramit@singleton.com



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