What employers need to know about COVID-19 and finances
Posted on March 20, 2020 | Terri Coles | 0 Comments
Please note: the COVID-19 situation is changing rapidly in Atlantic Canada. The information in this article may be outdated by the time you’re reading it.
A lot has changed in the Canadian and global economy in the past week as it became clear that COVID-19 has spread to North America. From the smallest mom-and-pop operations to the global corporations, financial forecasts are out the window.
Right now, the only reasonable assumption to make for any business is that nothing can be assumed.
In light of the significant economic impact of the measures being taken to slow or stop the spread of coronavirus, the Canadian government has made several significant announcements over the past few days. But due to both the frequency of those announcements and the fluidity of the current situation, it’s hard to get a handle on how businesses should plan to operate in the coming weeks and months.
Read on to learn more about what has been announced by the federal government, provincial governments, and related agencies over the past week, and how those announcements affect you and your employees.
Is there anything I can do to put off my mortgage or loan payments?
The six major banks have announced commitments to help personal and small business customers during this time. Assistance will be decided on a case-by-case basis but the measures include up to a six-month deferral on mortgage payments and the potential for relief on other credit products.
Tread carefully, though. CBC is reporting that some customers face confusion, delays and denials.
When do I have to file or pay my taxes?
The Canada Revenue Agency is allowing business owners to defer their income tax payments until after August 31, 2020, with no interest or penalties. As well, the CRA will not contact small- or medium-sized businesses for post-assessment GST/HST or income tax audits for the next four weeks.
And remember, the CRA has extended the individual tax deadline to June 1, 2020. Payments to the CRA can be deferred until after August 31, 2020, with no interest or penalties. This may also be important information for your business planning, and to pass on to employees.
If you or your business have a savings account for the money you expect to pay into the government for HST and taxes, the New School of Finance advises treating that money as you would taking on debt. These are funds you can access to make ends meet, but it will have to be repaid later.
If I lay off my employees, will they qualify for EI?
That depends. To qualify for regular EI benefits, an employee has to have been working in insurable employment, lost their job through no fault of their own, have been without work for at least seven consecutive days in the last 52 weeks, and worked the required number of insurable hours.
You can advise your employees to check, and help them do so if they have barriers regarding their digital skills, knowledge of our official languages, and/or access to a phone or online services. Your employees will need a record of employment from you, their employer, in order to apply for EI.
My employee has to self-quarantine. Can they claim anything through EI?
Canadians who are quarantined due to COVID-19 diagnosis or exposure, or because they have returned from international travel, can apply for Employment Insurance sickness benefits. Those benefits can provide up to 15 weeks of income replacement.
The one-week waiting period for these benefits has been temporarily waived for new claimants who are quarantined, and people claiming the benefits due to quarantine do not have to provide a medical certificate. People can also apply for the benefit later and have it backdated if they are unable to apply while quarantined.
Employment and Social Development Canada advises people to apply for the benefit before contacting them, to prevent delays. Applicants who applied for the EI sickness benefit for coronavirus-related reasons before the waiver for the one-week waiting period was announced can phone 1-833-381-2725 or 1-800-529-3742 (teletypewriter).
READ MORE: Tips for working from home, from a pro freelancer
Do I qualify for EI, as a sole proprietor or self-employed person?
Again, that depends. Self-employed people can qualify for EI special benefits if they register with the Canadian Employment Insurance Commission to participate in the EI program. However, you have to wait 12 months from the date of your confirmed registration to apply for the benefits.
If you would not normally qualify for EI, you may qualify for the newly announced Emergency Care Benefit and Emergency Support Benefit. This plan will provide up to $900 every two weeks for up to 15 weeks, for eligible workers — including those who are self-employed. It’s meant to help people who can’t go to work, don’t have sick leave, or are caring for someone who is sick or a child who is out of school.
Applications will open in April and details will be posted as they are available by Employment and Social Development Canada. You need a regular EI application to apply for this when it opens in April, New School of Finance advises — you can open that now. The same is true for your employees who may qualify for these benefits. As with regular EI, they will need a record of employment.
Can I get help to pay my employees’ wages?
As part of its fiscal announcements, the federal government said they will provide eligible small businesses a 10 percent wage subsidy for the next 90 days, up to a maximum of $1,375 per employee and $25,000 per employer. The subsidies apply for wages paid from March 18 to June 20. Any employee, including family members, is eligible, as are non-profits and charities.
To be eligible, companies have to have had a payroll account with the CRA as of March 18 and have had less than $15 million in taxable capital employed in Canada last year. The government has also said that additional funds and credit will be made available to businesses of all sizes.
Can I implement a work-sharing program to avoid layoffs?
Work sharing is meant to help employers and employees avoid layoffs during periods when there is a temporary reduction in normal business activity. Through the program, EI-eligible employees can get income support while working a temporarily reduced workweek.
The federal government has introduced temporary special measures to extend the maximum duration of these agreements from 38 to 76 weeks for businesses affected by COVID-19. The employer and employees must agree to participate in the program and apply to it together.
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