Apr 14

Wage subsidy – Question & Answer

** This is not legal advice. Please consult with counsel**

Question from BWA Member:
I can’t figure out if this subsidy allows employees to work or if it’s just money to stay home. Any way you can help?  It seems like they can’t work but why the revenue percentage test then?  If we are not working our revenue is zero!

Our workload/demand is very reduced but I’d like to have employees work part-time on staggered days to keep paying some of the bills. Right now they are all sitting at home collecting cerb.  This story is all over the news but I can’t find an answer to the most basic question about it. 

Thanks for any help you can give!

Answer by Sundeep Gokhale*
SHERRARD KUZZ LLP | Employment & Labour Lawyers

I have gone through the legislation and want to provide some real examples as to how the Wage subsidy can be applied. See below.

The legislation provides the wage subsidy is the total of all amounts, each of which is for an eligible employee in respect of a week in the qualifying period, equal to the greater of

(a) the least of

(i) 75% of eligible remuneration paid to the eligible employee in respect of that week,

(ii) $847, and

(iii) if the eligible employee does not deal at arm’s length with the qualifying entity in the qualifying period, nil, and

(b) the least of

(i) the amount of eligible remuneration paid to the eligible employee in respect of that week,

(ii) 75% of baseline remuneration in respect of the eligible employee determined for that week, and

(iii) $847;

 

  1. If an employee was earning 1k a week pre-crisis, and is continuing to get 1k per week, what refund will the employer get?

(a) least of $750 and $847 is $750

(b) least of $1000 and $750 and $847 is $750

(a) and (b) are the same so employer would get $750 back.

 

  1. If an employee was earning 2k per week and is still getting 2k per week, the company gets a refund of 847 per week?

(a) is least of $1500 and $847 is $847

(b) least of $2000 and $1500 and $847 is $847

(a) and (b) are the same so the employer would get $847 back.

 

  1. If an employee was earning 2k per week, but now gets 1k through company cutbacks, does the company get 750 a week back or 847 back? 

(a) least of $750 and $847 is $750

(b) least of $847 and $1500 and $847 is $847

B is greater than A – the employer would get $847 back

 

  1. If an employee was getting 800 per week pre-crisis and is continuing to get 800 per week now, what does the company get back?

(a) least of $600  and $847 is $600

(b) least of $800 and $600 and $847 is $600

(a) and (b) are the same so the employer gets $600 back

 

  1. If an employee was earning 1k per week and is now getting 850 per week because of a cutback, does the employer get 750 back, 850 back or 75 percent of 850?

(a) least of $637.50 and $847 is $637.50

(b) least of $850 and $750 and $847 is $750

Greater of (a) and (b) is $750 so the employer gets $750 back.

 

  1. If an employee was earning1k per week and is now getting 500 per week because of a cutback, what will the employer get back?

(a) 375.00 (75% of 500)

(b) 500

Greater of (a) and (b) is $500 so the employer gets $500 back.

 

** This is not legal advice. Please consult with counsel.

Sundeep Gokhale*
SHERRARD KUZZ LLP | Employment & Labour Lawyers
250 Yonge Street, Suite 3300, Toronto, Ontario, Canada  M5B 2L7

Direct 416.603.6246  |  Main 416.603.0700  |  Cell 416.347.9459  |  24 Hour 416.420.0738  |  Fax 416.603.6035
sgokhale@sherrardkuzz.com  |  www.sherrardkuzz.com