A guide for employers offering short-term
disability plans to their employees
The Employment Insurance
Premium Reduction Program
EMPLOYMENT INSURANCE
This document can be made available in alternative formats such as
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Produced by Service Canada
March 2011
Online: www.servicecanada.gc.ca
© Her Majesty the Queen in Right of Canada, 2011
IN-041-03-11
SG5-54/2011
978-1-100-51413-0
The Employment Insurance Premium Reduction Program
Contents
Is this guide for you? .......................................................................................................1
What’s new? .....................................................................................................................1
Chapter 1: General information about the Employment Insurance
premium reduction ..........................................................................................................2
Why does Service Canada offer the Employment Insurance premium reduction? ....2
What types of short-term disability plans can be considered as qualifying plans? .....3
What are the requirements that my plan must meet? .................................................3
How much can I save with the EI premium reduction? ...............................................3
What are the reduced employer EI premium rates? ...................................................4
Legislative references .................................................................................................4
Chapter 2: Applying for an EI premium reduction ........................................................5
How do I apply for an EI premium reduction?.............................................................5
What information do I need to send along with my application? ................................5
Where do I send my application? ...............................................................................7
When can I apply for an EI premium reduction?.........................................................7
What is the effective date of the EI premium reduction? ............................................8
What if some of my documents are not available when I apply? ................................8
What if my plan does not meet all the requirements when I apply? ...........................8
Chapter 3: Receiving the decision on entitlement for an EI premium reduction .......9
What happens if I qualify for an EI premium reduction? .............................................9
What happens if I do not qualify for an EI premium reduction? ..................................9
Chapter 4: How to appeal a decision .............................................................................10
What happens if I disagree with the decision? ...........................................................10
Chapter 5: Your responsibilities once a premium reduction is granted .....................11
How will the EI premium reduction affect my payroll? ................................................11
How do I calculate my employees’ portion of the savings? ........................................11
When do I return 5/12 of the savings to my employees?............................................12
Do I have to reapply or requalify for an EI premium reduction every year? ...............12
i
Chapter 6: Changes that may affect your premium reduction ....................................13
What happens if I change my approved short-term disability plan? ...........................13
What happens if I fail to notify you about changes to my plan? .................................13
What should I do if I cancel my short-term disability plan? .........................................14
What if I want to cover a new group of employees under the approved plan? ...........14
What happens if I make a change to my company structure? ....................................14
Chapter 7: How to contact us .........................................................................................15
Annex 1: Requirements for short-term disability plans ...............................................17
A. Requirements that apply to all short-term disability plans ......................................17
B. Requirements specic to weekly indemnity plans ..................................................21
C. Requirements specic to cumulative paid sick leave plans ...................................22
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The Employment Insurance Premium Reduction Program
1
The Employment Insurance Premium Reduction Program
Is this guide for you?
This guide is for you if you are an employer who provides your employees with a
short-term disability plan (also known as a wage-loss replacement plan). If your short-term
disability plan meets certain requirements, you may be entitled to pay your Employment
Insurance (EI) premiums at a rate that is lower than the standard employer rate (which is
1.4 times the employees’ EI premiums).
What’s new?
We made the following changes to the EI Premium Reduction Program to improve the way we deliver
services and to reduce your paperwork.
• Eliminatingrenewalapplications
As of January 2010, if you are granted an EI premium reduction, you will no longer need to
complete renewal applications each year. This means that entitlement to the premium reduction will
automatically continue until you change or cancel your approved short-term disability plan.
• NoticeofreducedEIpremiumrateforemployers
As of December 2009, if you are granted an EI premium reduction, you will receive a new yearly
notice that will indicate your reduced EI premium rate associated with your approved short-term
disability plan.
• Revisedapplicationform
We have streamlined Form NAS-5022, Application for Employment Insurance Premium Reduction,
to make it easier to complete. From now on, you will use this form for two purposes: to apply for
an EI premium reduction, or to apply for a continuation of an EI premium reduction after you make
changes to your approved short-term disability plan.
• Noticationofchangesmadetoapprovedplan
If you are a participating employer and you change your approved short-term disability plan, you
must notify us no later than 30 days after you make the modications. You must also apply for a
continuation of the EI premium reduction by completing Form NAS-5022 and sending it, along with
any documents concerning the changes.
The Employment Insurance Premium Reduction Program
2
The Employment Insurance Premium Reduction Program
Chapter 1
General information about the Employment Insurance
premium reduction
Why does Service Canada offer the Employment Insurance
premium reduction?
In addition to regular Employment Insurance (EI) benets, the Government of Canada’s
EI program provides special benets to employees who are not working because of:
• illness, injury, or quarantine;
• pregnancy or the need to care for a newborn or newly adopted child; or
• the need to provide care or support to a gravely ill family member.
When you offer similar income-protection coverage to your employees through a short-term
disability plan, they may not have to collect EI benets, or they may collect them for a shorter
time. In this way, your short-term disability plan can reduce the demands made on the EI
system. For this reason, Service Canada offers the EI Premium Reduction Program to return
the savings to both you and your employees.
EI premiums are paid by employers and employees at a ratio of 7/12 and 5/12 respectively
of the total EI premium payable. The EI Premium Reduction Program offers savings to both
the employer and the employees using these same ratios. For administrative reasons, we
only reduce the employer’s EI premium rate; this reduction includes both portions of the
savings. For this reason, it is the employer’s responsibility to ensure that all their employees
to whom the reduction applies receive their portion of the savings (5/12 of the savings).
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The Employment Insurance Premium Reduction Program The Employment Insurance Premium Reduction Program
What types of short-term disability plans can be considered
as qualifying plans?
There are two types of short-term disability plans that could be considered as qualifying
plans for an EI premium reduction:
• Weekly indemnity plans
These short-term disability plans pay weekly disability benets to employees when
they are ill or injured. The disability coverage can be set up through a self-insured
plan (by either the employer or a group of employees) or it can be set up through
a third-party plan (underwritten by an insurance carrier or a plan administrator).
The employer, the employees, or both the employer and the employees can pay
the cost of the plan.
• Cumulative paid sick leave plans
With these self-insured short-term disability plans, employees accumulate sick leave
credits that they can use when they are ill or injured. Some plans may also allow
employees to use paid sick leave credits while they remain at home because of
pregnancy, to care for a newborn or newly adopted child, or to care for a gravely
ill family member.
What are the requirements that my plan must meet?
Your short-term disability plan must meet the requirements that are listed in Annex 1 of this
guide (see pages 17 to 24).
How much can I save with the EI premium reduction?
If you are granted an EI premium reduction, you will calculate your EI premiums using a
rate that is lower than the standard employer rate of 1.4 times the employees’ EI premiums.
The amount saved is the difference between what would have been paid at the standard rate
and what is now payable at the reduced rate.
4
The Employment Insurance Premium Reduction Program
For example, in 2011, the total yearly savings per employee could be as much as $177.02.
This calculation is based on an employee who earned $44,200, which is the yearly maximum
insurable earnings for 2011.
An employee whose salary is $44,200 during 2011 will pay EI premiums of $786.76 (calculated
at 1.78%). For the purpose of this calculation, we have used areducedemployerEIpremium
rateof 1.175.
A = Regular employer EI premium = $786.76 x 1.4 = $1,101.46
B = Reduced employer EI premium = $786.76 x 1.175 = $924.44
C = Amount of total EI premium reduction = A – B = $177.02
The portion of the savings returned to the employee in this example would be $73.76
(5/12 of the $177.02). As the employer, your portion of the savings would be $103.26
(7/12 of $177.02).
The amount you and your employees can save depends on the type of short-term disability
plan you offer to your employees and the employees’ insurable earnings.
What are the reduced employer EI premium rates?
There are four different reduced EI premium rates that are set each year. Depending on the
type of short-term disability plan you offer, we will assign you one of these four rates.
Your reduced EI premium rate will be expressed as a multiple of the employee premiums
payable—that is, a premium rate that is less than 1.4 times the employee premiums payable
(for example, 1.181).
For the reduced employer EI premium rates currently in effect, visit our Web site at
www.servicecanada.gc.ca/prp/rates.
Legislative references
The legislative references relating to the Premium Reduction Program are as follow:
• section 69 of the Employment Insurance Act
• section 60 to 76 of the Employment Insurance Regulations
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The Employment Insurance Premium Reduction Program The Employment Insurance Premium Reduction Program
Chapter 2
Applying for an EI premium reduction
How do I apply for an EI premium reduction?
There are two ways to apply for an EI premium reduction:
• you can complete Form NAS-5022, Application for Employment Insurance
Premium Reduction; or
• you can prepare a request in writing using your company letterhead.
For your convenience, we have included a copy of Form NAS-5022 in the centre
of this guide.
What information do I need to send along with my application?
With your application, you must include the following information:
a) evidence of your commitment to provide a short-term disability plan; and
b) your undertaking that you will return the employees’ portion of the savings.
a) Evidence of your commitment to provide a short-term disability plan
With your application for an EI premium reduction, you must provide evidence that you
have made a formal commitment to your employees to provide them with a short-term
disability plan.
This formal commitment can be any document that provides details about your short-term
disability plan, including:
• a union or association agreement;
• an industry-wide trust contract;
• a private carrier’s insurance policy;
• an administrative measure contained in your employees’ handbook;
• minutes of a Board of Directors’ meeting indicating that your employees are provided
with a short-term disability plan;
• a statement contained in a personnel policy bulletin; or
• any commitment in writing to your employees.
6
The Employment Insurance Premium Reduction Program
The formal commitment must include a complete description of the benets you are
providing under the short-term disability plan.
b) Your undertaking to return the employees’ portion of the savings
With your application for an EI premium reduction, you must provide evidence that the
employees to whom the premium reduction applies will benet from the premium reduction
in an amount equal to at least 5/12 of the savings.
Acceptable methods for returning the savings include the following:
• a cash rebate;
• new employee benets that you provide to your employees as a result of the premium
reduction, such as a dental plan or group life insurance; or
• increased employee benets or upgrading of existing benets, such as more holidays
or more time off work.
Note
You can only use benets already contained in a collective agreement if you and the
union have a written agreement on this matter.
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The Employment Insurance Premium Reduction Program The Employment Insurance Premium Reduction Program
You can provide us with details about your method for returning 5/12 of the savings
by completing the appropriate section of Form NAS-5022, Application for Employment
Insurance Premium Reduction.
If you have different methods for returning 5/12 of the savings for separate groups of
employees, you must provide the details about the method you use for each group.
If you and your employees have signed a mutual agreement on how you will return the
employee’s portion of the savings, please include it with your application. Below is an
example of the format you may use for such an agreement.
Employer–EmployeeMutualAgreement
(company letterhead)
Date
This is an arrangement between (nameofemployer) and (groupofemployees).
If (nameofemployer) is granted an EI premium reduction, the employees’ portion of the savings
will be returned as follows:
Signature of employer Signature of employee representative
Where do I send my application?
Send your application by mail, along with the required documentation, to the address
provided on page 15.
When can I apply for an EI premium reduction?
You can apply for an EI premium reduction at any time.
8
The Employment Insurance Premium Reduction Program
What is the effective date of the EI premium reduction?
If your plan meets all the requirements on the date of your initial application, we will
determine the effective date of the EI premium reduction as follows:
• If you send the application on or before the 15th of the month, the effective
date of the premium reduction is the rst day of the following month.
Example: If you send us your initial application on June 10, the effective date
of the EI premium reduction is July 1.
• If you send the application on or after the 16th of the month, the effective
date of the premium reduction is the rst day of the second following month.
Example: If you send your initial application on February 23, the effective date
of the EI premium reduction is April 1.
What if some of my documents are not available when I apply?
Even if you do not have all the required documents available at the time you complete
your application, you should submit your application to our ofce as soon as possible.
Because the effective date of your EI premium reduction is based on the date you
send in your application, waiting for all your documents could affect your savings. After
we receive your application, we will contact you so that you can provide any missing
information or documentation.
What if my plan does not meet all the requirements when I apply?
If your short-term disability plan does not meet all the requirements on the date you
submit your initial application, we will let you know what modications you have to
make so that it does.
If you choose to amend your plan so that it meets all the requirements, you will have
to send us a copy of the amendments.
9
The Employment Insurance Premium Reduction Program The Employment Insurance Premium Reduction Program
Chapter 3
Receiving the decision on entitlement for an EI premium reduction
What happens if I qualify for an EI premium reduction?
If you qualify for an EI premium reduction, we will contact you to verify if you need an
additional payroll account number. Since the Canada Revenue Agency (CRA) does not
allow employers to remit at different rates under the same payroll account, you will need
more than one payroll account number if the following occurs:
• you have employees who are not covered by an approved plan (for example, students,
casual employees)—in this case, you will need to make remittances for these
employees at the standard rate of 1.4 times the employees’ EI premium;
• you have more than one type of approved plan for which you could be granted a
reduced rate; or
• the type of approved plan you offer is a paid sick leave plan and it defers the use
of paid sick leave credits for more than three months but not more than 12 months of
employment, beginning on the day the employee started working for you or the day the
employee joined the plan (in this case, you will need to make remittances for temporary
employees or employees on probation at the standard rate of 1.4 times the employees’
EI premium until they become entitled to use their paid sick leave credits).
If we determine you need an additional payroll account number, you will have to contact
the CRA ofce serving your area to request a separate account number. Once you provide
us with the additional number, we will send you a notice of entitlement to the EI premium
reduction. We will also let you know the applicable reduced EI premium rate(s).
Your EI premium reduction will be specied in cents per $100 of insurable earnings.
For example, the premium reduction could be 39 cents ($0.39) for every $100 of
insured earnings.
Your reduced EI premium rate will be expressed as a multiple of the employee premiums
payable—that is, a premium rate which is less than 1.4 times the employee premiums
payable (for example, 1.181).
What happens if I do not qualify for an EI premium reduction?
If you do not qualify for an EI premium reduction, we will send you a notice of
non-entitlement.
10
The Employment Insurance Premium Reduction Program
Chapter 4
How to appeal a decision
What happens if I disagree with the decision?
You have the right to appeal any decision we make regarding your entitlement to an
EI premium reduction within one year of the date we issue the decision notice to you.
You must submit your notice of appeal in writing (on company letterhead), and it
must include the following information:
• your name and address;
• your payroll account number (15 characters);
• the reasons for your appeal;
• the name and address of your authorized representative and permission
to deal with him or her (if applicable);
• additional supporting documentation (if applicable); and
• your signature.
Send your notice of appeal to the address indicated on page 15 of this guide.
11
The Employment Insurance Premium Reduction Program The Employment Insurance Premium Reduction Program
Chapter 5
Your responsibilities once an EI premium reduction is granted
How will the EI premium reduction affect my payroll?
We will send you a notice that indicates your reduced EI premium rate and the year to which
it applies. Since your reduced EI premium rate is applicable from January 1 to December 31,
you will have to recalculate the EI premiums you have already paid for the year and make
any necessary adjustments to your remittances.
Employees for whom the reduced rate applies are those who belong to a group or class of
employees covered by your approved plan, including employees who are serving the plan’s
eligibility period (a period of not more than three months).
For more information on remittances (for example, retroactive adjustments, remittances for
employees who are not covered by an approved plan), please contact the Canada Revenue
Agency ofce serving your area.
How do I calculate my employees’ portion of the savings?
Use the following formula to calculate your employees’ portion of the savings
(5/12 of the total savings):
A = Regular employer premium = Total employee premiums multiplied by the
standard rate (1.4)
B = Reduced employer premium = Total employee premiums multiplied by the reduced
rate (for example, 1.181)
C = Amount of the total savings = Regular employer premiums minus reduced employer
premium (A – B)
D = Employees’ portion of the savings = Amount of savings from EI premium reduction to
be returned to employees (C x 5/12)
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The Employment Insurance Premium Reduction Program
Example
An employee whose salary is $40,000 during 2011 will pay a total EI premium of $712 (calculated
at 1.78%). For the purpose of this calculation, we have used areducedemployerEIpremiumrate
of 1.181.
A = Regular employer premium = $712.00 x 1.4 = $996.80
B = Reduced employer premium = $712.00 x 1.181 = $840.87
C = Amount of total EI premium reduction = A – B = $155.93
D = Employee’s portion of reduction = C x 5/12 = $155.93 x 5/12 = $64.97
When do I return 5/12 of the savings to my employees?
You must return the employees’ portion of the savings in the year in which you received
the EI premium reduction, or within the rst four months of the following year.
If you have any questions about whether the employee benets you offer are taxable,
insurable, or pensionable, please contact the Canada Revenue Agency ofce serving
your area.
Do I have to reapply or requalify for an EI premium reduction every year?
No. Once you are granted an EI premium reduction, your entitlement will continue until
you change or cancel your approved plan. For more information on changing or cancelling
your approved plan, please see Chapter 6 on page 13.
In the last quarter of each year, we will send you a Notice of Reduced EI Premium Rate
for Employers that advises you of the reduced EI premium rate for the coming year.
13
The Employment Insurance Premium Reduction Program The Employment Insurance Premium Reduction Program
Chapter 6
Changes that may affect your premium reduction
What happens if I change my approved short-term disability plan?
If you make changes to your existing approved plan, we will need to determine if you are
entitled to continue receiving the EI premium reduction. Therefore, if you modify your
existing approved plan, you must:
• notify us within 30 days of the change;
• apply for a continuation of the EI premium reduction by sending us a completed
Form NAS-5022, Application for Employment Insurance Premium Reduction, or a letter
(on company letterhead), along with all documentation relevant to the changes you
have made to your plan; and
• provide us with evidence that the employees to whom the premium reduction applies
will benet from the premium reduction in an amount equal to at least 5/12 of the
savings (by either providing the details on Form NAS-5022 or in a letter on company
letterhead).
Send this information by mail to the address indicated on page 15 of this guide.
After we receive your application, we will review it and make a decision on whether
you can continue receiving an EI premium reduction. We will then inform you in writing
of our decision.
What happens if I fail to notify you about changes to my plan?
A change to your approved plan could affect your premium reduction. For this reason,
it is important that you notify us within 30 days of your making the changes to avoid any
retroactive adjustments to your reduced rate.
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The Employment Insurance Premium Reduction Program
What should I do if I cancel my short-term disability plan?
If you cancel your approved short-term disability plan, you must notify us within 30 days.
Entitlement to your EI premium reduction ends on the date you cancel your plan. We will
inform you of any adjustments required.
What if I want to cover a new group of employees under the approved plan?
If you cover a new group of employees under your approved plan, you must provide us with
proof of their coverage, along with information on how these employees will receive their
portion of the savings.
What happens if I make a change to my company structure?
If there is a major reorganization in the company, such as an amalgamation or new
ownership, you must contact us immediately.
Note
If you change your payroll account number, address, telephone or fax number,
or the name of the contact person(s) with whom we usually communicate, please
inform us immediately.
15
The Employment Insurance Premium Reduction Program The Employment Insurance Premium Reduction Program
Chapter 7
How to contact us
For more information on the Employment Insurance Premium Reduction Program:
Click www.servicecanada.gc.ca/prp
Call 1-800-561-7923
(Fax: 506-548-7473)
Visit a Service Canada Centre
You can also write to us at:
Service Canada
EI Premium Reduction Program
P.O. Box 11000
Bathurst, New Brunswick
E2A 4T5
17
The Employment Insurance Premium Reduction Program
Annex 1
Requirements for short-term disability plans
In order to be considered for an EI premium reduction, your short-term disability plan must
meet certain requirements.
The following pages describe the requirements that apply to all short-term disability plans, as
well as specic requirements that are unique to weekly indemnity plans and to cumulative
paid sick leave plans.
A. Requirements that apply to all short-term disability plans
1. Employees must be eligible to claim benets under the plan within three months
A new employee who belongs to a group of employees covered by the plan must be
eligible to claim benets on the rst day of the month following the completion of three
months of continuous employment.
Example: A new employee hired May 10, 2011, is entitled to claim benets starting
September 1, 2011.
Some plans are based on an “hour bank principle,” where employees bank hours while
working for a number of employers. In this case, a union hiring hall usually administers the
employees’ pay and benets. These employees must become eligible to claim benets on
the rst day of the month following the day the employee accumulated 400 hours of active
employment.
2. The waiting period for payment of benets cannot be more than
14 consecutive days
Benets under the short-term disability plan must be paid no later than the 15th day
following the start of the employee’s disability.
3. Benets paid must be at least equal to the amount of benets an employee
would receive from the EI program
The weekly amount of benets payable to employees under the plan must be at least
equal to or exceed the amount of EI benets that the EI program would pay.
18
The Employment Insurance Premium Reduction Program
For example, the basic EI benet rate is 55% of a claimant’s average insurable earnings,
up to a yearly maximum insurable amount of $44,200 in 2011. This means that claimants
can receive a maximum payment of $468 in EI benets per week. Therefore, for 2011,
the short-term disability plan must provide at least 55% of an employee’s normal weekly
insurable earnings, to a maximum of at least $468.
Please note the following:
• When calculating insurable earnings, employers must include any additional income
the employee earned for work done on a regular basis, such as overtime, bonuses,
and shift differentials.
• The yearly maximum insurable earnings amount is reviewed each year. If an
adjustment is made, it affects the maximum payment of EI benets a person can
receive. Therefore, if your plan provides a xed maximum weekly amount of benets
that is equivalent to that offered by the EI program, your amount must be adjusted
on or before January 15 of the year following the adjustment. This adjustment will
ensure that the amount is still equal to or exceeds the amount of EI benets an
employee would receive from the EI program.
19
The Employment Insurance Premium Reduction Program The Employment Insurance Premium Reduction Program
Example
On January 1, 2010, your short-term disability plan specied that the maximum amount of benets
payable per week was $457, which was the same maximum payable under the EI program.
On November 12, 2010, the EI program announced an increase of the maximuminsurable
earningsamounteffective January 1, 2011 (from $43,200 to $44,200). As a result, the maximum
weekly amount of EI benets payable to claimants increased from $457 to $468.
To continue with your EI premium reduction, you will have to increase your amount of benets
payable to $468 per week on or before January 15, 2011. If you do not modify the amount, your
plan will no longer meet the requirements to qualify for an EI premium reduction.
To avoid having to modify your plan every time the EI maximum insurable earnings amount
is adjusted, you may choose to include a clause in your plan that will automatically upgrade
the maximum benet level to match any such increases in the EI yearly maximum insurable
earnings amount.
4. The plan must be the rst payer
The plan cannot allow an employee to claim EI benets as part of its payment structure
(that is, benets under the plan cannot be integrated or coordinated with benets that are
paid under the Employment Insurance Act).
5. The plan must provide 24-hour coverage
The employees must be covered whether they are at work or not, even if they are injured
while working at a second job. The plan must protect employees in both “occupational”
and “non-occupational” environments, except in situations described in Item 6 below.
6. The plan can have certain limitations to the payment of benets
Some limitations to the payment of benets are allowed that will not prevent the employer
from qualifying for an EI premium reduction.
20
The Employment Insurance Premium Reduction Program
It is acceptable that benets are not paid to an employee:
• who is not under the care of a licensed physician;
• whose illness or injury is covered by workers’ compensation, the Canada Pension Plan,
or the Quebec Pension Plan;
• whose illness or injury is intentionally self-inicted;
• whose illness or injury results from service in the armed forces;
• whose illness or injury results from war or participation in a riot or a disturbance of the
public order;
• whose illness or injury occurs while on leave of absence or paid vacation;
• who is receiving maternity, parental, or compassionate care benets under the
Employment Insurance Act;
• who is ill or injured as a result of committing a criminal offence;
• who is engaged in employment for wage or prot while receiving disability benets;
• who is ill or injured during a strike or lockout at the place of employment (if the right to
benets is reinstated on the employee’s return to active employment);
• who is serving a prison sentence;
• who is not entitled to EI income benets payable because he or she is outside Canada;
• whose illness results from the use of drugs or alcohol and who is not receiving
continuing treatment for the use of these substances;
• who receives accident benets under a provincial automobile insurance plan that does
not take EI income benets payable into account when paying their benets;
• who receives a retirement pension from the same employer;
• who has plastic surgery solely for cosmetic purposes, except where attributable to
illness or injury; or
• who, in the case of a recurring disability, is receiving benets according to a
reinstatement provision of a group long-term disability plan (as long as the
reinstatement period does not exceed six months).
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The Employment Insurance Premium Reduction Program The Employment Insurance Premium Reduction Program
B. Requirements specic to weekly indemnity plans
In addition to the requirements explained in Part A above, weekly indemnity plans must also
meet the following requirements:
1. Benet duration
Weekly indemnity plans must pay benets until the earliest of the following:
• the payment of at least 15 weeks of benets;
• the end of the period of incapacity due to illness or injury;
• the date the employee retires; or
• the date of separation from employment for any reason other than illness or injury,
if the notice of separation was given prior to the beginning of the illness or injury.
Special weekly indemnity plans (for provincial/territorial or para-public employers) must
pay benets until the earliest of the following:
• the payment of at least 52 weeks of benets;
• the end of the period of incapacity due to illness or injury;
• the date the employee retires; or
• the date of separation from employment for any reason other than illness or injury,
if the notice of separation was given prior to the beginning of the illness or injury.
2. Reinstatement of benets following the end of a disability
Weekly indemnity plans must provide reinstatement of full benets to an employee within
a specied period of time for new and recurring disabilities—that is, at least 15 weeks of
benets must be again available to an employee who returns to work following the end
of an illness or injury.
The requirements for reinstatement are as follows:
• If the subsequent disability is new, full benets must be reinstated no later than one
month after the employee returns to work.
• If the subsequent disability is a recurrence of an earlier one, full benets must be
reinstated no later than three months after the employee returns to work.
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The Employment Insurance Premium Reduction Program
For a plan based on an hour-bank principle, the requirements are as follows:
• If the subsequent disability is new, full benets must be reinstated when the employee
accumulates no more than 150 hours of active employment.
• If the subsequent disability is a recurrence of an earlier one, full benets must
be reinstated when the employee accumulates no more than 400 hours of active
employment.
Special weekly indemnity plans (for provincial/territorial or para-public employers) must
provide for the reinstatement of a full 52 weeks of benets to an employee no later than one
month after the employee returns to work for both new and recurring disabilities.
C. Requirements specic to cumulative paid sick leave plans
In addition to the requirements explained in Part A, cumulative paid sick leave plans must
also meet the following requirements:
1. Accumulation of sick leave credits
Paid sick leave plans must provide one or more days of paid sick leave per month of
continuous employment and allow for a minimum accumulation of 75 days. The plan may
also allow for the use of sick leave credits while remaining at home because of pregnancy,
to care for a newborn or newly adopted child, or to care for a gravely ill family member.
Sick leave credits that are in excess of this minimum 75-day requirement may be used
for other reasons (for example, taking a family member to a medical appointment). This is
acceptable as long as at least one day per month (12 days per year) is maintained to be
used only in cases of an employee’s illness or injury and, if the plan allows it, while the
person remains at home because of pregnancy, to care for a newborn or newly adopted
child, or to care for a gravely ill family member.
Enhanced paid sick leave plans must provide one and two-thirds days or more of paid
sick leave per month of continuous employment and allow for a minimum accumulation of
125 days. The plan may also allow for the use of sick leave credits while remaining at home
because of pregnancy, to care for a newborn or newly adopted child, or to care for a gravely
ill family member.
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The Employment Insurance Premium Reduction Program The Employment Insurance Premium Reduction Program
Sick leave credits that are in excess of this minimum 125-day requirement may be used
for other reasons (for example, taking a family member to a medical appointment). This is
acceptable as long as at least 20 days per year are maintained to be used only in cases
of an employee’s own illness or injury and, if the plan allows it, while remaining at home
because of pregnancy, to care for a newborn or newly-adopted child, or to care for a gravely
ill family member.
Both paid sick leave and enhanced paid sick leave plans may allow days to be prorated
based on the number of hours an employee has worked in a particular month.
When employers rst apply for an EI premium reduction, their sick leave plan must have
allowed for a possible accumulation of 72 days of paid sick leave credits (for a paid sick
leave plan) or 120 days of paid sick leave credits (for an enhanced paid sick leave plan)
in the six years preceding the date of application or since the plan was put in place,
whichever is the shorter period. When the amount has not been achieved on the date
of the application for the premium reduction, employers will be required to provide
additional credits.
Example:
A paid sick leave plan provides an accumulation of one day per month (12 days per year). On the
date of the initial application, the plan has been in effect for ve years. This means an employee
who has been covered by the plan from the beginning could have accumulated 60 days of paid sick
leave. In this case, the employer would be required to credit all employees with 12 more days of paid
sick leave credits to achieve the 72 days necessary to meet the requirements.
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The Employment Insurance Premium Reduction Program
2. Benet duration
The plan must pay benets until the earliest of:
• the payment of 75 days of sick leave for a paid sick leave plan or 125 days of sick
leave for an enhance paid sick leave plan;
• the end of the period of incapacity due to illness or injury;
• the exhaustion of all accumulated paid sick leave;
• the date the employee retires; or
• the date of separation from employment for any reason other than illness or injury,
if the notice of separation was given prior to the beginning of the illness or injury.
3. Deferral of sick leave
For temporary employees or new employees who are still subject to a probationary period,
the employer may defer the use of paid sick leave credits for a period of no longer than
12 months, beginning on the day the employee started employment or joined the plan.