The federal government has made temporary changes to the Employment Insurance (EI) program to allow employees who have been terminated, and who have received termination payments in addition to EI, to keep more of their EI.
Under an Interim Order, the federal government has made a change to the Employment Insurance Regulations (SOR/96-332). This change applies to employees terminated between September 27, 2020 and September 25, 2021. Notice payments that an employee receives during this time will not impact their eligibility for EI benefits.
In normal circumstances, an employee cannot “double dip” by keeping the EI they received for a time period for which they also end up receiving notice pay from their former employer. Because sometimes negotiations regarding notice payments take several months, this can often mean that an employee has to repay the EI once they get their notice payment from their employer. Employees will typically receive an overpayment letter from EI.
Employer EI repayment obligations
Employers will often include something in their standard release documents, which an employee will typically have to sign in order to receive part of their notice payment, regarding the employee not having received EI benefits. This language exists because technically employers who have reason to believe that their former employee has received EI benefits should deduct the overpayment amount from the notice payment to the employee and “remit it to the Receiver General as repayment of an overpayment of benefits.” This comes from section 46 of the Employment Insurance Act (S.C. 1996, c. 23)
While it is up to the employee to apply for EI, employers should understand why employee counsel may raise objections to the standard release language related to EI noted above, in light of this interim order.