Make Sure Employees Take The Proper Steps To Access Their Plan

A SUB plan should not be used by a business that intends to permanently close but, rather, for employees who find themselves temporarily out of work. The employer should reasonably predict a date that they can expect to return to normal work and provide that date to EI as proof that the work suspension is temporary. There is, of course, some flexibility to this date as it is understood that times are uncertain and no definitive answer can be given at this time.

Employers should assist their employees with apply for a SUB plan. They should also note that employees must apply for and have received EI benefits before the SUB plan will come into effect. If the employee has not received benefits, they may still be allowed to access the SUB plan payments if they are within a one-week waiting period of receiving benefits, have less than the required amount of insurable hours of employment to qualify for EI, or if they have maxed out their EI entitlements.

In creating your SUB Plan, it should indicate:

• A start and end date. The SUB Plan must be in place for a minimum of one year and no more than five years.  If the plan is included as part of a collective agreement, then it will be valid until the expiry of that collective agreement.
• Identify which group of employees will be covered by the SUB Plan (I.E. every employee, full-time employees, etc.). This may include other requirements, such as minimum length of employment for eligibility.
• Which benefits will be supplemented by the SUB Plan (regular benefits, and/or sickness benefits).
• Whether the employer will check and verify that an employee has applied for and has received EI benefits before the SUB payments are paid
• The total amount of the SUB payment
• Whether employees will be paid for the one-week waiting period.
• How long EI benefits will be topped up under the SUB Plan.
• That a written notice of any changes will be submitted to Service Canada within 30 days of the effective date. This included changes to the name of the administrator or contact person.
• How the SUB Plan will be financed, as there are three possible ways to finance a SUB Plan, listed below. Please not that the employer must maintain a record of all SUB payments.
  • by payments from the company’s general revenue
  • by making deposits into a trust fund established to provide the SUB Plan payments
  • by paying 100% of the insurance premiums that are required to finance the SUB payments.
• Any and all guaranteed annual remuneration, deferred remuneration or severance pay owed to an employee will not be reduced or increased by payments made under the SUB Plan.
• If the employer wishes, the SUB Plan may provide for an offset of EI benefits that might have to be repaid as part of the employee’s personal income tax return. The gross weekly EI benefits from employment with the company, the SUB Plan payment previously paid, plus the offset amount must not exceed 95% of the employee’s usual weekly earnings.
• Upon termination of the SUB Plan, all remaining assets will revert to the employer, be used for SUB payments and/or be used for administrative costs of the SUB Plan.
• An employee does not have a right to any SUB payments outside of the period of employment specified in the SUB Plan.
• Any other conditions an employer may wish to impose (I.E. minimum length of employment before eligible, requirement to return to work for a specified time following receipt of benefits, etc.)

Before enlisting n the SUB Payment Plan, please read over the requirements for registration here.