As previously noted, the Canadian Government has established a wage subsidy plan that will allow Canadian employers whose business has been affected by COVID-19, to apply for a subsidy of 75% of employee wages for up to 12 weeks, retroactive from March 15, 2020 to June 6, 2020. It will provide up to $847 a week per employee.
The wage subsidy is intended to enable eligible businesses to re-hire workers previously laid off as a result of COVID-19, to help prevent further job losses and to resume normal operations following the crisis.
This week, Prime Minister Trudeau announced that a new calculator has been launched to help eligible businesses determine the amount they will be able to claim through the program.
The calculator will allow employers to input the number their of employees as well their gross payroll in order to determine the specific line amounts they should use when they make their application.
Employers will be able to apply as of this coming Monday, April 27th. It is expected that a large majority of applications will be processed by May 5th and direct payments will be made to employers soon after.
Eligible employers include:
- individuals (including trusts)
- taxable corporations
- persons that are exempt from corporate tax (Part I of the Income Tax Act), other than public institutions:
- non-profit organizations
- agricultural organizations
- boards of trade
- chambers of commerce
- non-profit corporations for scientific research and experimental development
- labour organizations or societies
- benevolent or fraternal benefit societies or orders
- registered charities
- partnerships consisting of eligible employers
Additionally, employers must have experienced an eligible reduction in revenue and have had a CRA payroll account on March 15, 2020.
Eligible employees are individuals employed in Canada by the employer during the claim period, except if there was a period of 14 or more consecutive days in that period where they did not receive any pay from the employer.
Additionally, employees who have been laid off or furloughed can become eligible retroactively, as long as they have been rehired and their retroactive pay and status meet the eligibility criteria for the claim period. Employers must rehire and pay such employees before including them in the calculation for the subsidy.
Penalties and Fines for Misusing the Wage Subsidy Program
Tough penalties have been built into the legislation enacting the wage subsidy program. Among them, employers and business owners who are found to have misused the funds could face up to five years in prison and heavy fines, which may include having to pay 225% of what they received.
Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.
At Baker & Company, we provide responsive, strategic, and pragmatic business and legal solutions to our clients. Our corporate and commercial law team has dealt with all kinds of issues in courts across Ontario and has significant experience at both the trial and appellate levels. To hear more about how we can help, call us at 416-777-0100 or contact us online.