Covid-19 Update April 15, 2020 from MPLG Management Solutions Inc.

On behalf of MPLG Management Solutions Inc. - We include information as at Wednesday April 15, 2020

We continue to review the government announcements as they are issued and working to keep you updated as quickly as possible. Please forward this information to any colleagues, friends or family.

As Ontario is under a Provincial “State of Emergency” - Ontario Businesses remaining open and which are not deemed an essential service are exposing their employees and their business to significant fines.

What is new?

1.  Government of Ontario – State of Emergency – extended and in effect until May 11, 2020. Plan this date to be extended beyond May 11, 2020.
2. Schools/Daycares to remain closed for April 2020 and until at least May 11, 2020. Plan this date to be extended beyond May 11, 2020.
3. Most municipalities have cancelled all public permits and public facilities remain closed / off limits through to end of June 2020.
4. The Government of Canada parliament has passed the Canada Emergency Wage Subsidy program and issued program criteria.

Please continue to PLAN for continuing changes and into mid to late summer 2020.

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GOVERNMENT PROGRAMS

 Below is information gathered from government briefing and / or documents.

 For EMPLOYERS – amended April 12, 2020

 Canada Emergency Wage Subsidy (CEWS) – Federal – Government of Canada

• The federal government has announced a wage subsidy of up to 75% of wages.  THIS PROGRAM IS NOW APPROVED. CEWS details are briefly outlined below and the full details may be viewed at: https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html
•  Payments will not occur for up to 6 weeks (expect Mid-May 2020).
• Employers will apply for the CEWS using the “My Business Account” on the Canada Revenue Agency (CRA) portal and must apply before October 1, 2020.

  To qualify for the CEWS, an employer must:

• be an eligible entity,
• have a revenue reduction of at least 15% in March 2020 and 30% in April and May 2020,
• have had a CRA payroll program account on March 15, 2020, and
• apply for the CEWS before October 1, 2020.

Eligible entity

An eligible entity includes any of the following types of entity:

• a corporation (other than a tax-exempt entity or “public institution”, such as a school or hospital) (note that this includes domestic as well as foreign (and foreign-controlled) corporations);
• an individual (note that this includes trusts);
• a registered charity (other than a public institution);
• a non-profit organization or other specified tax-exempt entity (other than a public institution); or
• a partnership each of whose members is an eligible entity as described above.

Revenue reduction

     There are three claiming periods for the CEWS:? 

1. March 15 to April 11, 2020;
2. April 12 to May 9, 2020; and
3. May 10 to June 6, 2020.

An employer must apply for each claiming period separately.

To qualify, an employer must have a revenue reduction of at least 15% in March 2020 and 30% in April and May 2020. There are two methods for comparing revenue:

• General method - comparing March/April/May 2020 revenues with March/April/May 2019 revenues; or
• Alternative method - instead of comparing March/April/May 2020 revenues with March/April/May 2019 revenues, comparing March/April/May 2020 revenues with an average of January and February 2020 (or the period in January and February 2020 in which the employer was carrying on business) revenues.

An employer may elect to use the alternative method, provided it does so for all claiming periods. An employer must use the alternative method if it did not carry on business in March 2019.

There is a special rule that deems an employer who meets the revenue reduction test for a claiming period to also meet it for the immediately following claiming period (e.g. an employer who meets the test for March 15 to April 11, 2020 is deemed to automatically meet it for April 12 to May 9, 2020, etc.). 

The following table shows each claiming period, minimum revenue reduction, and eligibility reference period:

An employer’s revenue is calculated as its gross revenue earned in Canada from arm’s length sources in the ordinary course of its activities as determined under its normal accounting practices, subject to certain special elections and rules, including the following:

• employers may elect to determine their revenue based on the cash method instead of the accrual method (provided they do so for all claiming periods);
• registered charities and non-profit organizations (and certain other tax-exempt entities) may elect to exclude government funding from their revenue (provided they do so throughout the program);
• affiliated groups may elect to determine their revenue on a consolidated basis to be used by each member; and
• there are special rules for determining revenue from non-arm’s length transactions.

Base subsidy amount

The base subsidy amount for an arm’s length eligible employee is the greater of the following two amounts:

• 75% of the amount of eligible remuneration paid, up to $847 per week; and
• the amount of eligible remuneration paid, up to $847 per week or 75% of the employee’s “baseline remuneration” (average weekly remuneration from January 1 to March 15, 2020, excluding any seven-day period where the employee received no remuneration), whichever is less.

Employer top-up

The government webpage states that employers “are expected to make their best effort to top-up employees' salaries to bring them to pre-crisis levels”, there is no requirement for employers to top-up employees’ salaries to pre-crisis levels.

Employees on lay-off receiving Employment Insurance or the Canada Emergency Response Benefit

The legislation does not allow an employer to receive the CEWS for any employee who has not been paid by the employer for 14 or more consecutive days in the qualifying period. Accordingly, if the employee has been laid off without pay from the employer for 14 or more consecutive days in the qualifying period, the employer will not be eligible to receive the CEWS for that employee.

In addition to the 75% wages subsidy the CEWS has been expanded to now include a new 100% refund for certain employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan. This refund covers 100% of employer-paid contributions for eligible employees for each week throughout which those employees are on leave with pay and for which the employer is eligible to claim for the CEWS for those employees. In general, an employee is considered to be on leave with pay throughout a week if that employee is remunerated by the employer for that week but does not perform any work for the employer in that week. This refund is not be available for eligible employees that are on leave with pay for only a portion of a week.

• This refund is not subject to the weekly maximum benefit per employee of $847 that an eligible employer may claim in respect of the CEWS. There is no overall limit on the refund amount that an eligible employer may claim.
•  For greater certainty, employers are required to continue to collect and remit employer and employee contributions to each program as usual. Eligible employers apply for a refund, as described above, at the same time that they apply for the CEWS.

MPLG Notes:

• The CEWS subsidy does not include subsidy for certain employer burdens (e.g. Ontario Health tax, WSIB, and employer benefits costs);
• All wage dollar amounts above the declared maximum CEWS amounts will be fully borne by the employer.
• The federal government may disclose to the public the name of any person or partnership who applies for the CEWS.

MPLG Comment:

• As employers – if you have no work – we do not recommend you create work and keep payroll active. Employers will still incur wage costs and burdens for the wage portion not eligible for subsidy;
• We remain firm in our direction – that being to lay employees off – preserve corporate cash – and set up your business for a successful start up of operations once the emergency measures are eased or ended;
• The CEWS is a program that will benefit employers deemed essential and still operating and provided they can demonstrate a 30% or 15% decline in revenues over the same month the year prior;
• If unable to demonstrate the required percentage decline in revenues an employer will not be eligible for subsidy;
• An Employee paid either regular wages or being paid as part of the CEWS will not qualify for the Canada Emergency Relief Benefit (CERB); and
• Any employee who quits or voluntarily leaves their employment will be ineligible for the CERB. (CERB details below)

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 For WORKERS

 NOW AVAILABLE 

Canada Emergency Relief Benefit (CERB) – Federal – Government of Canada

The CERB is active and payments are being issued within 3 to 5 days after application.

• Almost every application is immediately improved, and audits will occur during 2020, and should the CRA deem a payment was provided in error or to an ineligible person, the CRA will claw back the amount in the 2020 tax filing period in 2021.
• CERB details may be found at: https://www.canada.ca/en/services/benefits/ei/cerb-application.html
• The CERB will apply to any four-week period falling within the period beginning March 15, 2020 and ending October 3, 2020 that an individual meets the eligibility criteria described below.
• Applications are done through the Service Canada website
• A worker may need to reapply every four weeks until reaching the 16-week limit, assuming they continue to be not working due to COVID-19.

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1.   MPLG COMMENTS

Employees who are laid-off – are you keeping contact and checking in with your employees?

Do your employees have questions, need guidance or need help?

Taking care of your employees and effectively managing employee relations can be stressful.

 We can Help!

If you have questions regarding the government plans we will try to answer those questions. If you have any questions or need any assistance with your employee relations matters, please call.

As stated in all of our updates:

PREPARE, DEVELOP AND UPDATE YOUR BUSINESS CONTINUITY and CONTINGENCY PLAN!

CONSERVE CASH and SET YOUR BUSINESS UP TO SUCCEED and OVERCOME THIS PANDEMIC.

It is important all businesses have a plan to conserve cash and ensure your business continuity plan is reviewed and updated weekly or as often as needed.

               STAY HOME!          STAY SAFE!      ISOLATE!

Please stay up to date and obtain reliable and accurate information from the Public Health Agency of Canada, Infection Protection and Control Canada and the US Centers of Disease Control.

https://www.canada.ca/en/public-health/services/diseases/coronavirus-disease-covid-19.html 

https://ipac-canada.org/coronavirus-resources.php

https://www.cdc.gov/coronavirus/2019-nCoV/index.html

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 2.   Employer Obligations

Employment laws

Employer obligations continue. All legislation related to workplaces remain in full force and effect. (i.e. Employment Standards, Occupational Health and Safety, Workplace Compensation). 

Employees still working, the respective jurisdictional employment standards (in Ontario – the Employment Standards Act, 2000), related to weekly hours of work, overtime, rest periods remain, protected leaves (eg. sick time/personal emergency leave/bereavement leave) must be complied with.

In Ontario, employees laid off, the provincial government has not issued relief against the “deemed termination” provision in the Employment Standards Act, 2000 (ESA). This means should an employee be laid off in excess of 13 weeks the employment relationship is deemed to be terminated and termination pay and or severance pay (if applicable) would be payable by the employer. As many employers have been forced to close and lay-off employees we have asked the Minister of Labour to amend the ESA during the Emergency Declaration  to suspend the deemed termination clause requirements until the Emergency Declaration  has been revoked. We will advise as to the Minister’s reply.

 Employers facing insolvency

Employers who have run out of cash and are unable to pay employee wages, or ESA required payments may be forced to close.

Owners and Directors need to be aware of their on-going liabilities upon closing including Directors’ liability for unpaid wages. When Employers may not be able to fulfil their most recent payroll – i.e. they can’t pay employees for hours actually worked. Under the ESA and the Ontario Business Corporations Act, directors of the organization are jointly liable for up to six months of employees’ wages.

 3.    WSIB Claims and Claims management

Employees off work on a current and approved workplace injury claim, and where employers are prevented from providing accommodation and / or modified work, we suggest you contact the WSIB / WCB claims manager and seek relief from on-going cost allocations.

 Employers should not lay-off or take any adverse action, (e.g. terminating the employee).

 If you need assistance with WSIB / WCB claims management, please give us a call. 

 4.   Work Refusals

Employers whose operations are continuing may encounter a work refusal from an employee or group of employees.

Employers are required to follow the “work refusal” steps as per the Occupational Health and Safety Act / Code.

The right to refuse work

The Ontario Occupational Health and Safety Act (OHSA) gives a worker the right to refuse work that he or she believes is unsafe to himself/ herself or another worker. A worker who believes that he or she is endangered by workplace violence may also refuse work.

The Act sets out a specific procedure that must be followed in any work refusal. It is important that workers, employers, supervisors, members of joint health and safety committees (JHSCs) and health and safety representatives understand the procedure for a lawful work refusal.

When can a worker refuse to work?

A worker can refuse to work if he or she has reason to believe that:

• any machine, equipment or tool that the worker is using or is told to use is likely to endanger himself or herself or another worker [clause 43(3)(a)]
• the physical condition of the workplace or workstation is likely to endanger himself or herself [clause 43(3)(b)]
• workplace violence is likely to endanger himself or herself [clause 43(3)(b.1)]
• any machine, equipment or tool that the worker is using, or the physical condition of the workplace, contravenes the Act or regulations and is likely to endanger himself or herself or another worker [clause 43(3)(c)].

Procedure for a work refusal

First stage

1. Worker considers work unsafe.
2. Worker reports refusal to his/her supervisor or employer. Worker may also wish to advise the worker safety representative and/or management representative. Worker stays in safe place.
3. Employer or supervisor investigates in the presence of the worker and the worker safety representative.
4. Either:
5. Issue resolved. Worker goes back to work.
6. Issue not resolved. Proceed to the second stage

Second stage

1. With reasonable grounds to believe work is still unsafe, worker continues to refuse and remains in safe place. Worker or employer or someone representing worker or employer calls MOL.
2. MOL Inspector investigates in company of worker, safety representative and supervisor or management representative.*
3. Inspector gives decision to worker, management representative/supervisor and safety representative in writing.
4. Changes are made if required or ordered. Worker returns to work.

*         Pending the MOL investigation:

• The refusing worker may be offered other work
• Refused work may be offered to another worker, but management must inform the new worker that the offered work is the subject of work refusal. This must be done in the presence of:
• a member of the joint health and safety committee who represents workers; or
• a health and safety representative, or
• a worker who because of his or her knowledge, experience and training is selected by the trade union that represents the worker or, if there is not trade union, by the workers to represent them.

If you need assistance with workplace health and safety or addressing a workplace refusal, please give us a call. 

 5.   Links to Resources 

Take care of your own personal well-being and the well-being of your families, co-workers and colleagues.

There are many resources available to help us navigate and help us with our mental and physical well-being, If your benefit plan includes an Employee Assistance program, ensure employees are aware of the program and how to contact them.

For employers who do not have an Employee Assistance program some resources are listed below: 

CAMH: https://www.camh.ca/covid19

Daily Tips for parents: https://childmind.org/

Handwashing video that explains to kids what soap does to germs: https://www.independent.co.uk/life-style/health-and-families/coronavirus-wash-hands-video-pepper-soap-water-virus-children-tom-fletcher-a9403946.html

Positive Psychology Kit: https://positivepsychology.com/the-crisis-kit/

310 COPE: https://www.yssn.ca/310-COPE

Kids Help Line: https://kidshelpphone.ca/call

Mind your Mind Online Support: https://mindyourmind.ca/

Canadian Psychological Association: https://cpa.ca/corona-virus/

Inspiring Stories: https://www.everythingzoomer.com/health/2020/03/20/inspiring-stories-covid-19-anxiety/

On-line Meditation Sites: https://blog.calm.com/take-a-deep-breath

On-line Meditation Sites: https://www.headspace.com/covid-19

Easy Exercises to do at home: https://www.youtube.com/watch?v=AE_FeKpc_lk

Khan Academy – for learning: https://www.khanacademy.org/

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 Business Continuity and Support -

1. Have you secured your corporate data?
2. Are you prepared and able to support employees working remotely (from home) for employee relations or IT matters?
3. Do you have a 1-month, 2-month, 3-month and on-going plan?
4. Do you have a plan to recall employees once the state of emergency ends?

When the state of emergency ends and operations being to start again, expect a slow recovery process. Many employers and employees will have been financially hurt. Ensure your business has a plan.

If you have any questions or if we can be of assistance please do not hesitate to call 416-347-6875 or e-mail [email protected]

Stay Well! Stay Safe! And be Kind!

Mark Gernon, CHRL CHRP 

MPLG Management Solutions Inc.  416-347-6875      [email protected]