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Employers May be Eligible for Federal EI Reduction Program

The Employment Insurance (EI) Premium Reduction Program is available to employers who offer a short-term disability or cumulative sick leave plan to their employees and whose plans meet certain requirements. The program has been made possible by short-term disability plans, which reduce demands made on the EI program. Savings from reduced premiums are shared between the employer and employee. A minimum amount of 5/12 of the savings must be returned to the employee (employers can choose to return more if they wish), either in the form of a cash rebate (taxable and insurable) or new or increased employee benefits. Participation in this program is permitted under the sectoral Collective Agreements.

Eligibility

To be considered for a premium reduction, your plan must:

  • Be a weekly indemnity plan or cumulative paid sick leave plan.
  • Provide at least 15 weeks of benefits for short-term disability.
  • Match or exceed the level of benefits provided under EI.
  • Pay benefits to employees within eight days of illness or injury (the elimination period cannot exceed seven consecutive days).
  • Be accessible to employees within three months of hiring; and
  • Cover employees on a 24-hour-a-day basis.

 

How to Apply

The evaluation process takes several months and to avoid delays, employers are reminded to ensure submissions are complete and include the application form and the following supporting documents:

  • A copy of the relevant sections of the Collective Agreement that refers to sick leave and Long-Term Disability (i.e. sections 19.1 and 27.8).
  • Copy of your sick leave credit plan detailing how sick leave credits are accrued, carried over and used.

 

Next Steps

The application process will take four to six months. Once you have been approved you will be given a rate; if it is in the middle of the year, the rate will be prorated. The 2018 EI reduced rate for category one is 1.273% of employee EI premiums.

Employers with employees who are not covered under their sick leave plan are required to set up a new business/payroll account with Canada Revenue Agency (CRA) in order to remit at the normal rate of 1.4% of employee EI premiums.

For More Information

Employers with questions on the application process can contact CSSEA at This email address is being protected from spambots. You need JavaScript enabled to view it. . Other helpful online resources can be found at:

Communications Contact

Doris Sun
Director of Communications
604.601.3110
604.319.5010
This email address is being protected from spambots. You need JavaScript enabled to view it.