Canada's Economic Action Plan Helps More Canadians Continue Working Through Work-Sharing
OTTAWA - Canada's Economic Action Plan is strengthening benefits for Canadian workers by extending and easing access to Work-Sharing agreements so more Canadians can continue working while companies experience a temporary slowdown.
"Our Government knows that by keeping Canadians working we can minimize the impact of this difficult economic time," said the Honourable Diane Finley, Minister of Human Resources and Skills Development Canada. "The changes to Work-Sharing agreements are providing companies with an opportunity to have easier access to these agreements and extend them to 52 weeks while they recover from temporary slowdowns."
Work-Sharing, an element of the Employment Insurance (EI) program, can be instrumental in assisting businesses experiencing a temporary slowdown caused by factors beyond their control. It is designed to avoid layoffs by offering EI income benefits to qualifying workers willing to work a reduced work-week while their employer recovers.
In March 2009, there were almost 650 more Work-Sharing agreements started compared to the same period last year. That is nearly a 1,000 percent increase and represents almost 21,000 more employees participating in new agreements than in March 2008. Currently, there are more than 2,200 active Work-Sharing agreements protecting over 80,000 jobs across Canada.
Employers in key sectors of the economy such as forestry and manufacturing have already been using Work-Sharing.
Recognizing the current level of uncertainty faced by many businesses during volatile global markets, the Government is extending, over the next two years, Work-Sharing agreements to a maximum of 52 weeks, and increasing access to Work-Sharing through greater flexibility in the qualifying criteria and streamlining processes for employers.
This measure is estimated to cost $200 million over two years and will minimize the financial impact of the economic downturn by helping companies avoid layoffs while their industry recovers.
In addition, the Government has implemented improvements to enhance services to EI claimants by processing claims faster, cutting red tape for employers and improving the quality of information received. These include funding of more than $60 million for processing, including hiring additional staff, and the implementation of the extra five weeks of benefits, as announced in Canada's Economic Action Plan. The Government will monitor the effectiveness of these measures and adjust them as needed.
EI Work-Sharing is designed to help companies facing a temporary downturn in business avoid layoffs by offering EI, Part I income support to workers willing to work a reduced work-week while the company recovers. Under Work-Sharing, employers can retain employees and avoid expensive re-hiring and re-training costs. Employees are able to continue working and keep their skills up-to-date.
The objective of the temporary policy change announced in Canada's Economic Action Plan is to increase access to Work-Sharing during this difficult economic time. Also, extending the duration criteria of Work-Sharing agreements to a total maximum duration of 52 weeks will allow a longer period for companies to recover.
Under the former Canada Employment Insurance Commission policy, the need to reduce the normal level of business activity had to be beyond the control of the employer and the employer had to provide a Recovery Plan that described the activities to be undertaken to return to normal production at the end of the Work-Sharing agreement, which was normally a maximum of 26 weeks but could be extended by up to an additional 12 weeks to a maximum 38 weeks under exceptional circumstances.
Workers laid off at the end of their participation in Work-Sharing may receive their full entitlement to regular EI benefits based on their rate of pay prior to participating in Work-Sharing.