Response to the Coronavirus (COVID-19) - CERB, Temporary Wage Subsidy, & WCB Premiums
We hope this update finds you well. As we are all getting multiple emails about COVID-19, we are attempting to keep you informed with what we feel is the most relevant information to our industry, without adding too much to your inbox. Outlined below are the latest updates on the Canada Emergency Response Benefit, the Temporary Wage Subsidy for Employers, and WCB.
Canada Emergency Response Benefit (CERB) – On March 25th, 2020 the previously announced Emergency Care Benefit and Emergency Support Benefit were combined to create the Canada Emergency Response Benefit (CERB). The CERB will provide a $2,000 payment every four (4) weeks, for a period of up to sixteen (16) weeks, and it will be available from March 15th, 2020 to October 3rd, 2020.
The CERB is available to workers who:
- Must stop working due to COVID-19 and do not have access to a paid leave or other income support;
- Are quarantined, sick or taking care of someone who is sick with COIVID-19;
- Are working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures;
- Are still employed but are not being paid because there is currently not enough work and their employer has asked them not to come to work; or
- Are wage-earners and self-employed individuals, including contract workers who would not otherwise be eligible for Employment Insurance (EI).
Workers are eligible provided the following:
- They have ceased working for COVID-19 related reasons for at least 14 consecutive days;
- They have not been in receipt of income from employment or self-employment, Employment Insurance (EI) benefits, or allowances, money or other benefits paid to workers under a provincial plan due to pregnancy or parental leave within that period; and
- They did not quit their employment voluntarily.
Workers who are not currently in receipt of EI benefits, whether they are EI-eligible or not, can apply for and receive the CERB. However, Canadians who are already receiving EI benefits will continue to receive their benefits and should not apply for the CERB. If their EI benefits end before October 3, 2020, then employees can apply for the CERB once their EI benefits ease if they are still not able to return to work due to COVID-19. Canadians not currently in receipt of EI benefits who apply for the CERB and who are otherwise eligible for EI regular and EI sickness benefits would still be able to access their normal EI benefits, if still unemployed, after the 16-week period covered by the CERB.
Application details for the CERB will be available through the CRA and Service Canada website beginning the first week of April. According to the Federal Government, workers can expect to receive their payments within 10 days of submitting their application.
Temporary Wage Subsidy for Employers – On March 18th, 2020, the federal government introduced a three (3) month measure, the Temporary Wage Subsidy for Employers. This allows eligible employers to reduce their amount of payroll deductions (Source Deductions) required to remitted to the Canada Revenue Agency (CRA). This subsidy is taxable income to the employer.
Eligible employers include Canadian-controlled private corporations, non-profit organizations and registered charities provided the following:
- Have a business number and payroll program account (RP) with the CRA on March 18th, 2020;
- Pay salary, wages, bonuses, and/or other remuneration to at least one employee;Taxable capital employed in Canada is less than $15 million.
Calculation of the Temporary Wage Subsidy is 10% of the remuneration paid between March 18th, 2020 and June 20th, 2020 to a maximum of $1,375 per employee. The maximum for each employer is $25,000.
To receive the subsidy, employers can reduce their current remittance of federal, provincial, or territorial income tax that would otherwise be remitted to the CRA by the amount of subsidy calculated, beginning in the first remittance period that includes remuneration paid between March 18th, 2020 and June 20, 2020. If income taxes deducted are insufficient to offset the value of the subsidy in a period, future remittances can be reduced, including remittances that may fall outside of the application period for the wage subsidy (after June 20, 2020). Eligible employers who choose not to reduce payroll remittances during the year can calculate the temporary wage subsidy on remuneration paid between March 18, 2020 and June 20, 2020, and request that the subsidy be paid to them at the end of the year or transferred to the next year’s remittance. Employers should continue to deduct income tax, Canada Pension Plan contributions and Employment Insurance premiums from salary, wages, bonus or other remuneration paid to employees. The subsidy is only deducted when income tax amounts are to be remitted to the CRA by employers. Important: There is no reduction to the remittance of Canada Pension Plan contributions or Employment Insurance premiums.
WCB Premium Relief Measures – All private sector employers will have their 2020 WCB premiums deferred to 2021. Invoicing for 2020 premiums has been stopped for the remainder of 2020, and any employers who have already made payments towards their 2020 premiums will be refunded. No interest charges will be applied to unpaid 2020 premiums. When the invoicing for 2020 premiums in 2021 occurs, small and medium sized private sector employers will have 50% of their 2020 premiums waived. For more information on the premium relief for employers, please go to this link:
https://www.wcb.ab.ca/assets/pdfs/employers/EFS_Premium_relief.pdf.
We are trying our best to navigate this situation with the coronavirus, COVID-19, pandemic as smartly and efficiently as possible, and we appreciate your patience with us during this time. The King Business Solutions Centre is operating within our standard office hours, but we have decided to limit our interaction with the public by locking our interior door. You are still welcome to drop-off and pick-up from our front vestibule and call us if you need any assistance. We also have a client portal, email, and fax capabilities. Give us a call at 780-986-4132, we are here to help!