Employers are often asked by their employees for advice on Employment Insurance. Specifically, employees often ask if they will be able to qualify for EI benefits. Employers should know what to say in response to such questions. The following is meant to provide guidance on that response.
First, employers must be very careful before commenting on employee chances of getting EI. Although, the EI system provides benefits for millions of Canadians who are without work, recent statistics show that roughly one-third of employee claims for EI benefits are turned down by the EI Commission. The rules around qualifying for EI are very complex. As a result, employers may simply not be in a position to know whether a particular employee’s claim for EI benefits will be successful.
For most employees, the minimum number of insured hours required to qualify ranges between 420 and 700 hours. The actual number depends on three-month average unemployment rates provided by Statistics Canada. Specifically, an average of the monthly unemployment rates for the prior November, December and January sets the number of insured hours required to qualify during February. The unemployment rate that applies to employee EI claims is based on the region where employees live, at the time a claim is established. Since these rates obviously change over time, the minimum insured hours can’t be known in advance. Similarly, an employee could move away from the province where they lived to another province that had a much different unemployment rate. To help with this, the EI Commission does have a website where employees can enter a postal code and see the corresponding insured hours required to establish a claim: http://srv129.services.gc.ca/eiregions/eng/postalcode_search.aspx.
This describes the basic requirements for what are described as regular benefits, meaning the benefits paid to employees who are laid off from their jobs. There are different requirements for what are called special benefits—maternity, parental, sick or compassionate care benefits. For these, the basic rule is that employees need at least 600 insured hours to qualify. But there is a difference between the hours that an employee may need to qualify for sick benefits than for maternity, parental and compassionate care benefits.
For example, an employee who makes a claim for regular benefits based on 500 insured hours, may also qualify on that same claim for an additional 15 weeks of sick benefits. But by contrast, this employee, with only 500 insured hours, would not be eligible for maternity, parental or compassionate care benefits. Similarly, if the employee had had to stop working because of illness or injury, the 600-hour threshold would still apply. It just doesn’t apply to employees who qualify for regular benefits and then make a claim for special benefits, before the regular benefits have run out.
Before describing the variations on these rules, specifically for regular benefits, it’s important to understand the time periods related to an EI claim. When an employee makes a claim for EI benefits, a successful claim results in what is termed the benefit period. The 52 weeks prior to this benefit period is the qualifying period, the period in which employees have to work the hours needed to qualify for benefits. The 52 weeks prior to that in turn is the labour force attachment period. The hours worked in the labour force attachment period influence the hours needed in the qualifying period (see below). For example, if an employee establishes a claim for benefits, starting the week of Sunday, January 22, 2012, the qualifying period runs from Sunday, January 23, 2011, to Saturday, January 21, 2012. Similarly, the labour force attachment period in this situation would run from Sunday, January 24, 2010, to Saturday, January 22, 2011.
There are two different situations under which the insured hours an employee requires for regular benefits can be as much as 1,400 hours. The first is for employees described as new entrants, or re-entrants, to the labour force. A new entrant, or a re-entrant, is a person with less than 490 insured hours in the labour force attachment period. New entrants normally require 910 insured hours to establish a claim for regular benefits. The second situation applies to employees who have been penalized by the EI Commission within the five years prior to applying for regular benefits. The most common reason for which the commission imposes a penalty is failing to report earnings while on EI. Depending on the amount of any penalty imposed, and the number of penalties accumulated, employees, including re-entrants, may be required to have as much as 1,400 insured hours in their qualifying periods. Neither of these situations affects claims for special benefits.
Normally, as described above, the qualifying period runs backward for 52 weeks. However, the qualifying period can be shorter for employees who were terminated for cause or who quit a job, without just cause. In either of these situations, the count of insured hours is reset to zero. For example, if an employee was terminated for cause on January 23, 2012, no insured hours prior to that date can be used to establish a new EI claim. The same applies to employees coming off an EI claim. Any qualifying period for a new claim only runs as far back as the start of a previous claim. For example, an employee established a claim for EI benefits on March 1, 2011. On November 1, 2011, the employee got a new job. If the employee wants to establish a new claim for EI after this, the qualifying period for such a new claim can’t run back past the March 1, 2011 start of the old claim.
The point being that, given the variations in the insured hours needed to establish a claim, employers may simply not have the information needed to offer reliable EI advice to employees. As such, the only advice employers should offer is always to apply for benefits when issued an record of employment. Employees should always file a claim for EI, even if they think they won’t need it. The reason for this is that failing to file a claim on time may reduce the number of weeks for which an employee may be paid EI benefits, and reduce the weekly benefit rate, or may result in the employee completely failing to meet the insured hours required.
The commission will generally give an employee 30 days in which to file a claim. During this 30-day period, the commission will gladly backdate any claim to the week an employee became unemployed or was in need of special benefits. However, after these 30 grace days, the commission will object to establishing an EI claim before the week that employees actually file for benefits. After this grace period, each week of delay in filing a claim may shift the qualifying period forward one week. In effect, a week of presumed work at the start of the qualifying period is dropped off, and a week is added at the end, presumably a week with no insurable hours. As a result, each week of delay may reduce the insured hours a person has to qualify for benefits. So the most important message that employers can impart to departing employees is to apply for benefits as soon as possible.
Employees commonly believe they have to have an ROE in hand, before they can apply for benefits. This has never been true and this belief is all the more dangerous now that employers who file ROEs electronically with Service Canada, no longer have to distribute paper copies of the ROE to employees. To avoid employees sitting at home, waiting for an ROE from the employer that will never come, and thereby losing out on EI benefits they would otherwise be entitled to, it’s important for employers to remind departing employees to file prompt EI claims.
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