How Will This Affect Employers?
The Federal government is expected to introduce extended parental leave as early as 2018. Budget 2017 proposes changes to the Employment Insurance (“EI”) scheme that will allow parents to “stretch” EI parental benefits over an extended period of up to 18 months at a lower benefit rate of 33% of average weekly earnings. EI parental benefits will continue to be available at the existing benefit rate of 55% over a period of up to 12 months.
While the total benefit amount available through EI will not change, the lower extended parental benefit rate may have an impact on employers who offer supplemental or top-up payments during parental leave. We recommend that employers start to review their policies and collective agreements to determine whether changes will be required and how they may allocate top-up payments over 18 months if required to do so. Changes to these plans will require enough lead time to give notice to employees and/or negotiate the terms of any collective agreement with unions.
Budget 2017 also proposes to allow mothers to claim EI maternity benefits up to 12 weeks before their due date, an increase from the current standard of eight weeks.
It is important to note that none of the proposed measures will take effect immediately, but must await the introduction and passage of legislation. To implement these measures, Budget 2017 proposes to amend the Employment Insurance Act.
Further, while the proposed changes to the Employment Insurance Act will extend benefit entitlement and allow mothers to begin their EI maternity benefit earlier, the changes will not necessarily alter the legislated length of pregnancy/parental leave for all employees.
The budget indicates that the federal government will make the necessary amendments to the Canada Labour Code to ensure that employees in the federally-regulated sector have job protection while they are receiving caregiving, parental or maternity leave benefits. For provincially regulated employees, the job protection and leave entitlements will remain the same (i.e. usually based on a standard 12 month leave) unless the provincial legislatures also change the applicable provincial employment standards legislation. There is precedent for the provinces to follow the Federal Government’s lead when EI changes are made, but it remains to be seen what each province will do in these circumstances.
We will continue to watch for these legislative changes as each jurisdiction takes or does not take steps towards these amendments. If you require assistance regarding the impact of these proposed legislative changes on your workplace or any workplace policies or benefit plans, please contact us.
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