Common challenges

COVID-19 Question Series: Answers to Your Questions About EI, ROE, and Layoffs

March 31, 2020

We received many questions during our recent webinar on COVID-19. In case you missed it, you’ll find a link to the recording at the bottom of this article. In a difficult time like this, we wanted to make sure the answers to these challenging questions were available, so we’ve created a multi-part question series on our blog to help ensure employers and HR professionals have access to the information they need. We will continue to post these COVID-19 Question Series articles, so keep your eye on our blog and subscribe for updates.

In this article, we address questions we’ve received about Employment Insurance (EI), Record of Employment (ROE) documentation, and layoffs.

Can you please explain the process to follow for temporary layoffs as a result of COVID-19?

  1. Develop a communication strategy to ensure that employees are aware of business changes and that you will remain in contact with them during this time.
  2. Review employment contracts and jurisdictional requirements laid out in employment standards legislation, keeping in mind that we are currently operating in an unplanned emergency situation, and that normal practices may not be applicable. Seek a legal opinion if you are unsure of the implications of moving forward with a temporary layoff.
  3. If applicable, review your collective agreement and connect with your union representatives.
  4. Determine whether you will continue to provide health and dental benefits during the temporary layoff. If possible, try to continue to provide these benefits.
  5. Contact your benefits provider to see whether life, long-term disability, and other types of insurance will be affected during a temporary layoff.
  6. It is not necessary to pay out vacation accounts during a temporary layoff. As a best practice suggestion, you may want to let employees know what is available within their account so that they can use vacation before the temporary layoff takes effect.
  7. Prepare a Record of Employment for each employee you lay off.
    • Use Code A: Shortage of Work; and
    • Select “Unknown” for the return-to-work date.
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I need to significantly reduce my hourly staff’s hours or lay them off. They need to secure EI. What documentation do I need to provide them? Record of Employment? Vacation pay? Severance? If I significantly reduce their normal hours, will they have a claim for constructive dismissal?

You need to provide anyone you lay off with a Record of Employment. You do not have to provide vacation pay; however, businesses should offer this option to employees who would like to take paid time off before being temporarily laid off.

Severance would only be applicable if the temporary layoff becomes permanent. Permanent layoffs must align with termination entitlements under each jurisdiction.

You should consider whether the actions you take (like reduced hours or temporary layoffs) could be perceived as constructive dismissal by your staff. If an employee makes a claim of constructive dismissal, the business may have a case for frustration of contract based on the unprecedented nature of the pandemic, which, if successful, would limit the financial impact to minimum statutory entitlements within your jurisdiction. When considering reducing hours or offering temporary layoffs, we encourage you to talk with your staff and provide options. Some staff may want a layoff and some may want reduced hours. Working with your staff and providing options can help to reduce the concerns of constructive dismissal.

 

What code can I use on a Record of Employment for independent contractors if they need to self-isolate?

If the independent contractor is self-employed and issuing invoices to the business, the business would not need to issue a Record of Employment because the contractor is not an employee of the business.

An ROE is only issued to individuals on your payroll. If, however, the independent contractor is in fact an employee and paid through your payroll, you would need to issue an ROE when they experience an interruption of earnings even if they are not planning to file a claim for EI benefits.

An interruption of earnings occurs in the following situations:

  • When the employee has a break in earnings of seven consecutive days; or
  • When an employee’s salary falls below 60% of regular weekly earnings.

There are a few exceptions to the seven-day rule: real estate agents, employees who have non-standard work schedules, and commissioned salespeople.

For more information on the ROE form, please click the following link:

https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/reports/roe-guide/understand.html

For self-isolation, you could use the following codes:

  • Code D – Illness or injury; or
  • Code K – Other.

Regardless of the code you use, within the comments section include “Employee is self-isolating due to COVID-19.”

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As the COVID-19 pandemic progresses, keep checking back here.

We will continually update our blog as frequently as possible during this time to provide you with the resources and answers you need. You can also read the previous article in our COVID-19 Question Series: COVID-19 Question Series: A Q&A Update of What We Know So Far

 

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