Funding: Work-Sharing - Apply

Additional information

Work-Sharing Benefits

Participants do not have to serve a two-week waiting period for Work-Sharing benefits. However, as these benefits are processed through the Employment Insurance payment system, it may take a few weeks after the employer has submitted the first Utilization Report for the first cheque to arrive. It is important that you advise your employees of this delay in the initial receipt of Work-Sharing benefits.

The benefits payable are based on the employees normal average weekly earnings, as calculated at the start of the agreement. If the employees work irregular hours, the average weekly wage is calculated by averaging the hours worked per week over the two years preceding the application.

During the Work-Sharing agreement, the employer may request an employee to work on a Work-Sharing day. The employee is required to report to work as work becomes available.

Earnings received in any week by an employee shall not be deducted from the Work-Sharing benefits. If a Work-Sharing participant has earnings from sources other than the Work-Sharing employment, a percentage of these earnings will be deducted from any Work-Sharing benefits payable the week in which the earnings occurred. Earnings are deducted in the following way:

• If the earnings received are less than the Earning Threshold (i.e. 90% of the Weekly Insurable Earnings [WIE] used to calculate the Employment Insurance claim), 50% of the earnings will be deducted from any Work-Sharing benefits payable
• If the earnings received are more than the Earning Threshold but less than the WIE, 50% of the earnings up to the Earning Threshold will be deducted as well as 100% of the earnings over the Earning Threshold
• If the earnings received are equal to or greater than the WIE, no benefits will be payable

Taxation

Tax deductions for Employment Insurance Work-Sharing benefits are determined from the information the claimant provides in the Income Tax section of the Employment Insurance application; the amount of tax deducted is specific to the claimant's province, personal tax situation and benefit rate.

The Employment Insurance benefits received by Work-Sharing participants are taxable, however because of the weekly amount of benefits paid, taxes are not always withheld at source. Participants may wish to have their income tax deductions increased in order to avoid having to pay a large amount of income tax at year-end. This request can be made by phone at the toll-free number: 1-800-206-7218, TTY: 1-800-529-3742. For faster service, always give us your Social Insurance Number (SIN).

At the time the participant files their income tax return, depending on their net income, they may be required to repay some of the Employment Insurance benefits received. Benefit repayment requires claimants with a net yearly income exceeding a specified threshold to repay a percentage of the Employment Insurance regular benefits received during the tax year.

Example:

If the 2013 net income from all sources exceeds $59,250 the claimant may be required to repay 30% of the lesser of:

• net income in excess of $59,250; or
• the total regular benefits paid in the taxation year

Exemptions apply in certain circumstances. For more information on repayment of benefits at income tax time please visit: Employment Insurance and Repayment of Benefits at Income Tax Time - Year 2013.

Records of Employment

A Record of Employment (ROE) must be provided to each employee who will be participating in the Work-Sharing program. A Record of Employment cannot be issued until the employees have completed their shifts up to the start date of the agreement. Records of Employment can be submitted electronically via the Record of Employment on the Web (ROE Web). If you have not already done so, you will need to register for ROE Web.

To simplify the issuance of Records of Employment, you may wish to consider starting your Work-Sharing agreement at the end of a pay period. All Work-Sharing agreements start on Sundays.

Questions frequently raised:

• Item 11 - This box should reflect the last day of work PRIOR to the start date of the Work-Sharing agreement. For example, if your Work-Sharing agreement starts on Sunday, and your employees work from Monday to Friday, the employees last day of work would be the Friday before the week the Work-Sharing agreement begins
• Item 16 - The reason for issuing the record should indicate H Work-Sharing

If you have any questions regarding the completion of the ROE, visit our page Records of Employment: Information for Employers or contact a ROE advisor 1-800-367-5693 TTY: 1-855-881-9874

Enrolment sheet

To process Work-Sharing benefits for each employee, employers must complete and submit to Service Canada an enrolment sheet which lists all participating employees and their Social Insurance Numbers.

The enrolment sheet may be submitted by courier or through the Data Gateway.

The Data Gateway is a Web-based file transfer tool that was designed to give employers the capacity to send information about their employees electronically to Service Canada through a secure and reliable channel. The Data Gateway User Guide contains important information to assist you in submitting your weekly Utilization Reports.

Benefits of using the Data Gateway:

• you will be able to submit your Utilization Reports electronically through the Data Gateway Web site;
• it is fast, convenient and user-friendly; and
• encryption technology ensures that the information you send is kept safe and secure.

Your organization will be assigned a user ID and password that will be required to login to the Data Gateway Web site. This user ID and password will be provided to you, by letter, at the beginning of your agreement.

Additionally, the letter will provide you with a toll free number for support and will provide direction on how to get an instruction manual and all of the necessary web links.

To protect your employees personal information, please do not send any documentation bearing Social Insurance Numbers by email or by fax.

Utilization reports

To track the percentage of time that Work-Sharing is utilized and to enable Service Canada to determine the benefits payable to your employees, employers who enter into a Work-Sharing agreement are expected to complete a Utilization Report every week.

A Utilization Report must be submitted each week during the period of the agreement including any weeks of no utilization (i.e. hours missed equal zero).

To obtain an electronic copy of the Utilization report, please click on the version that is the best fit for your organization, based on the number of employees participating in the Work-Sharing agreement.

• Maximum 25 employees
• Maximum 50 employees
• Maximum 100 employees
• Maximum 150 employees
• Maximum 250 employees
• Maximum 350 employees
• Maximum 500 employees

For more than 500 employees please contact your Program Officer and they will obtain the appropriate Utilization Report for you.

A visual sample of the Utilization Report is provided for your convenience, however, to enable Service Canada to process your claim, please complete the appropriate Excel version of the form above.

The Utilization Report must be completed weekly beginning the first week of your Work-Sharing agreement as it is required by Service Canada in order to pay your employees.

If you have made a mistake or error on a Utilization Report already submitted to Service Canada, please complete and submit the Amended Utilization Report, updating only the changes required.

Please refer to the table below for instructions on how to complete the Utilization Report. Any questions about completing the Utilization Report should be directed to the Employer Contact Centre (1-800-367-5693).

Only complete the following columns: "days not available", "days missed due to sick", "paid sick leave amount" and "all other paid amounts", if hours worked are 0 (zero).

The Utilization Report can be submitted electronically via the Data Gateway.

Sending your Utilization Reports via the Data Gateway is strongly encouraged as it allows us to receive your Utilization Report within an hour of submission thereby ensuring quicker processing of your employees' benefits.

An employer not using the Data Gateway can mail a paper copy of the Utilization Report to the Insurance Payment Operational Centre (IPOC) in their region to one of the following addresses:

Agreement monitoring

All Work-Sharing agreements are monitored at least once by Service Canada.

The purpose of monitoring is to determine the extent to which the objectives of the Work-Sharing program are being achieved and to ensure the Work-Sharing agreement is implemented as agreed to by all parties. Monitoring increases the likelihood that the agreement will succeed by providing on-going opportunities to support the employer and plan for any needed adjustments.

The Service Canada Program Officer will contact the employer and employee representatives directly. Employers may be asked to provide payroll records. Some Work-Sharing agreements may be subject to an on-site monitor involving a visit by Service Canada officials to the employers premises.

During the Work-Sharing agreement, the employer must regularly report the total hours worked, the hours missed due to participation in Work-Sharing and hours missed due to any other reasons for each member of the Work-Sharing unit via a weekly Utilization Report. The Utilization Report submitted by the employer is necessary for the payment of Work-Sharing benefits and is the primary method of monitoring a Work-Sharing agreement.

Employer obligations

During the agreement, employers must:

• Make information about the Work-Sharing agreement available to all employees and ensure that the Employee Representative distributes a copy of the Employee Annex to all members of the Work-Sharing unit
• Report the total hours worked, the hours of work missed due to participation in Work-Sharing and the hours of work missed due to any other reasons for each employee via a weekly Utilization Report
• Maintain all existing benefits. However, benefits may be reduced (including any subsequent payout of benefits, e.g. disability benefits) due to participation in a WS agreement if calculated based on earnings or hours of work
• Advise employees that benefits such as pensions, vacation pay and, in some circumstances, subsequent claims for Employment Insurance benefits, may be affected by participation in Work-Sharing, usually due to employees having lower gross (insurable) earnings and/or fewer hours of work
• Maintain proper records of each employee on Work-Sharing during the agreement including wages and any other remuneration paid to those employees each week
• Make such records available, upon request, to Service Canada for inspection and audit
• Report the progress of the recovery plan
• Notify the Service Canada prior to any requested changes to the agreement
• maintain a schedule of work and track any hours of overtime worked by Work-Sharing employees
• Advise Service Canada of changes to work schedules on a continuing basis. Specific dates and number of employees involved must be included and should be given prior to the change; and
• Schedule at least one half hour of work per week for employees in order for them to qualify for Work-Sharing Employment Insurance benefits

Amendments or changes to a Work-Sharing Agreement

The following changes require prior approval from Service Canada:

• agreement extensions
• layoffs
• additions, deletions and substitutions to the Work-Sharing unit(s)
• shutdowns

Employers wishing to make changes to their Work-Sharing agreement must do so using the prescribed Amendment to a Work-Sharing Agreement form (EMP 5103) with the necessary information. Please allow at least 30 days for processing. It is essential that both the employer and employee representative sign all such requests for amendments. These changes cannot be implemented until you receive approval by Service Canada. Once approved, please ensure the change is reflected on your weekly Utilization Report under the "Comments" section.

Service Canada must be notified in writing within three days if any Work-Sharing unit members leave the company for one of the following reasons: quit, dismissed, leave of absence, illness, maternity. A letter should be sent to the Work-Sharing Program Officer indicating the name and Social Insurance Number of the affected employee(s), the employee(s) last day of work and the reason for departure. The letter must have the signature of the employer representative as well as the employee representative. Please ensure this information is reflected in your weekly Utilization Report under the Comments section.

Subsequent application for a Work-Sharing Agreement

Employers must serve a mandatory waiting period before they are eligible to begin a new Work-Sharing agreement involving the same employees who participated in a previous Work-Sharing agreement. The waiting period is equal to the number of weeks of the previous agreement, up to a maximum of 38 weeks. Note: If the previous agreement was signed for 26 weeks but terminated early at week 20, the waiting period would equal 20 weeks.

Employers may submit an application for a new Work-Sharing agreement involving a different group of core employees at any time (i.e. no mandatory waiting period). Employers must demonstrate that the work shortage is caused by new unforeseen and uncontrollable circumstances.

Employee annex: Instructions and information for employees

This section contains helpful information employees need in order to participate in a Work-Sharing agreement.

Please read all the information provided and discuss it with your employer. please keep this document as you may need it throughout the term of the agreement.

Work-Sharing is a three-party agreement between employers, employees and Service Canada.

Applying for a Work-Sharing Agreement

To apply for Work-Sharing an employer must provide:

• a completed application form (including attachments and signatures of both employer representative(s) and employee representative(s).
• a recovery plan; and
• a list of employees included in theWork-Sharing unit.

All information with respect to applications will be kept confidential.

A formal application for Work-Sharing must be received by Service Canada at least 30 days in advance of the requested start date of the agreement.

The work shortage and duration of Agreements

• Employers must show that the work shortage is temporary and beyond their control. (The program is not intended to support companies during an expected seasonal slowdown.)
• The decrease in business activity must be significant enough to warrant support of the program.
• The average reduction in working time must be between 10% and 60% of the employees normal working hours.
• Work-Sharing agreements cannot be put in place in instances where the reduction of work is related to a labour dispute.
• Work-Sharing agreements must have a minimum duration of 6 weeks. The maximum initial duration is 26 weeks with a possible extension of up to 12 weeks.

Employer responsibilities

• The employer must report the total hours worked, the hours of work missed due to participation in Work-Sharing and the hours of work missed due to any other reasons for each employee via a weekly Utilization Report;
• The employer must identify the individuals to be included in the Work-Sharing Unit(s). The Work-Sharing Unit must consist of two or more people. The program is intended to cover "core staff" only (i.e. year round permanent full-time/part-time employees);
• Outside sales representatives, senior managers, executive level marketing and sales agents and others who are needed to generate work should not be included in the Work-Sharing unit;
• Employers are not allowed to add or remove employees from the Work-Sharing unit without prior consent from Service Canada; and
• The employer must maintain all existing employee benefits (e.g. health/dental insurance pension benefits, vacation, group disability, etc.) for the duration of the Work-Sharing agreement. However, benefits (including any subsequent payout of benefits, e.g. disability benefits) may be reduced due to participation in a WS agreement if calculated based on earnings or hours of work.

Employee conditions

• Employees must be eligible for Employment Insurance benefits to participate in the Work-Sharing program;
• Work-Sharing benefits are paid based on employees' loss of normal hours of work Work-Sharing benefits are also based on the regular weekly Employment Insurance benefit rate, as calculated at the start of the Work-Sharing agreement;
• For the duration of the Work-Sharing agreement, the employer may request that an employee work on a Work-Sharing day. The employee is required to report to work.
• Earnings received in any week by an employee shall not be deducted from the Work-Sharing benefits payable. Earnings received from sources other than the Work-Sharing employer will be deducted from the employees weekly Work-Sharing benefits in the following way:
  • If the earnings received are less than the Earning Threshold (i.e. 90% of the Weekly Insurable Earnings [WIE] used to calculate the Employment Insurance claim), 50% of the earnings will be deducted from any Work-Sharing benefits payable.
  • If the earnings received are more than the Earning Threshold but less than the WIE, 50% of the earnings up to the Earning Threshold will be deducted as well as 100% of the earnings over the Earning Threshold
  • If the earnings received are equal to or greater than the WIE, no benefits will be payable.
• Statutory holidays occurring within a Work-Sharing period are not compensated by Employment Insurance benefits and are the responsibility of the employer;
• Employees will have the option of completing claimant reports or of completing an "Exemption from Completing Employment Insurance Report Cards" and simply advising Service Canada if special conditions apply (e.g. working for another employer or outside Canada);
• Employees will be expected to apply via Appli-Web and must use the reference code provided to them on the Important Notice for Work-Sharing Employees form; and
• Employees will have their claim established in the province where their employer is located. Employees whose claim is set up outside the province in which they reside must use the employers postal code when accessing My Employment Insurance On-line. In the event employees contact the Employment Insurance call centre they must identify in which province they work.

Two-week waiting period

• Employees do not have to serve a two-week waiting period for Work-Sharing benefits.
• Benefits are processed through the Employment Insurance payment system, meaning it may take up to 28 days after the employee Records of Employment are received for the first cheques to arrive.(Benefits can only be paid if the employer submits the weekly Utilization Reports.)

Taxation

Tax deductions for Employment Insurance Work-Sharing benefits are determined from the information the claimant provides in the Income Tax section of the Employment Insurance application; the amount of tax deducted is specific to the claimant's province, personal tax situation and benefit rate.

The Employment Insurance benefits received by Work-Sharing participants are taxable, however because of the weekly amount of benefits paid, taxes are not always withheld at source. Participants may wish to have their income tax deductions increased in order to avoid having to pay a large amount of income tax at year-end. This request can be made by phone at the toll-free number: 1-800-206-7218, TTY: 1-800-529-3742. For faster service, always give us your Social Insurance Number (SIN).

At the time the participant files their income tax return, depending on their net income, they may be required to repay some of the Employment Insurance benefits received. Benefit repayment requires claimants with a net yearly income exceeding a specified threshold to repay a percentage of the Employment Insurance regular benefits received during the tax year.

Example:

If the 2013 net income from all sources exceeds $59,250 the claimant may be required to repay 30% of the lesser of:

• net income in excess of $59,250; or
• the total regular benefits paid in the taxation year.

Exemptions apply in certain circumstances. For more information on repayment of benefits at income tax time please visit: Employment Insurance and repayment of benefits at income tax time - Year 2013.

Employee layoffs

• If the business does not recover as expected and an employee is laid off during or at the end of a Work-Sharing agreement, the employee can apply to transfer their claim to regular benefits. That claim duration would be extended by the number of weeks of Work-Sharing.
• Normally, the benefit rate and the normal duration of the claim is not reduced by Work-Sharing.

Bi-weekly report cards

Employees can opt out of completing bi-weekly report cards by agreeing to allow their employer to report their hours worked on their behalf (i.e. exemption reporting). When an employee applies via Appli-Web, they will be presented with an Exemption from Completing Employment Insurance Report Cards question and if they choose to take part in exemption reporting they will advise Service Canada if special conditions apply. If an employee is not applying via Appli-Web, the employer will provide this form when the agreement is set-up. This form must be completed and returned immediately to their employer who will forward all forms together to Service Canada.

Employees who choose not to participate in exemption reporting will be required to complete bi-weekly reports cards. The payment of their Work-Sharing benefits will be based on these bi-weekly report cards and not on the Utilization Report completed by the employer.

Employees who decide to complete report cards:

There are situations where it would be to your advantage to complete report cards in order to avoid the payment of benefits for which you are not entitled (i.e. overpayments). These situations are listed below:

• moneys received from another employer
• work for another employer
• self-employment; and
• outside of Canada

For instructions on how to complete your report cards, please refer to the tables below:

Both sides of the card must be completed and the front of each card must be signed and dated.