Work Sharing

What is work sharing?

Work Sharing is a federal program administered by Service Canada and funded by Employment Insurance (EI).

Normally, Work Sharing is established through an Agreement for a limited period of between 6 weeks and 76 weeks, the maximum for COVID-19 applications. The Agreement must be signed by Service Canada, the employer and the union or worker representatives.

During the COVID-19 crisis, changes are:

  • extend the Work-Sharing agreements by an additional 38 weeks
  • wave the mandatory waiting period between agreements
  • ease the recovery plan requirements
  • inclusion of some broader public sector employers like universities, municipal transit companies, and crowns/publicly owned entities.

The purpose of Work Sharing is to help employers and workers avoid temporary lay-offs when there’s an unusual downturn in production or service as has occurred in many workplaces due to COVID-19.

During a Work Sharing Agreement:

  • the available work is redistributed through a reduction in hours for all employees
  • work hours are reduced by between 10% and 60% (for example, 1 shift off weekly)
  • the reduction in hours must be the same as the percentage of layoffs that would happen otherwise (for example, if 20% of the workers would otherwise be laid off, Work Sharing assumes a 20% reduction in hours)
  • all workers in the work unit must take the same reduction in hours
  • the % reduction can vary from week to week but the average must be the agreed %
  • more than 1 work unit can be covered by an Agreement. Workers doing similar work in one department may have a different arrangement than another department or unit. However, remember that variations may lead to divisions and resentment.
  • workers who qualify for EI receive EI Work Sharing Benefits during their time off.

How Much are EI Work Sharing Benefits?

Work Sharing benefits are paid for each shift off on Work Sharing. Those who are eligible for EI (or become eligible during Work Sharing) fill out a special short form application. The usual 1 week EI waiting period is deferred so benefits are payable from the first shift on Work Sharing. The benefit is 55% of normal earnings, capped at the EI maximum.

Does Work Sharing Effect Other E.I. Entitlements?

A worker will usually be eligible for their normal EI benefit period on the same claim if the worker is laid off or takes maternity, parental or sick leave after Work Sharing. During Work Sharing workers are also collecting extra hours for any future EI claim.

How Long does a Work Sharing Agreement Last?

Work Sharing normally runs for a minimum of 6 weeks and a maximum of 38 weeks.

COVID-19 Agreements may be extended to a maximum 76 weeks. Some flexibility in qualifying criteria and recovery plans is also being applied for COVID-19 Agreements.

What About Paid Holidays?

Paid holidays are not compensated by EI Work Sharing because the company must continue to pay them. If a paid holiday falls during a Work Sharing week, it doesn’t count towards the % reduction so it must be made up (e.g. another shift off that week).

What if Problems Come Up during Work Sharing?

It’s a good idea to set up a Work Sharing Committee so management and the union or worker representatives can meet regularly to oversee implementation and discuss difficulties or new developments. If necessary, the parties can propose amendments to Service Canada or even withdraw from Work Sharing with reasonable notice.

Is There More Information about Work Sharing?

Why Consider E.I. Work Sharing ?

A decision about Work Sharing isn’t easy. Whatever the decision, make it the best possible collective decision for the workforce. Consider these advantages:

  1. Everyone continues to work and get paid - including young workers with families.
  2. There’s a shorter work week with no loss of benefits.
  3. There’s a cost savings on lunch, travel and child care for the days off work.
  4. There’s some compensation in pay. Take-home pay (with EI) isn’t too different.
  5. EI entitlements are protected and more hours are building for any future claim.
  6. Work Sharing isn’t permanent; it’s a temporary 3 party agreement.

Example: $20 an hour job and 40 hour work week

  • Normal 5 day Week: $20 x 40 hours = normal pay $800

  • Work Sharing Week of 4 days: $20 x 32 hours = $640 + $88 from EI ($160 lost day x 55% EI rate, up to daily EI maximum)
    = $728 for 4 day Work Sharing week *

  • an example only; amounts vary by individual and for a 2 or 3 day Work Sharing week

Work Sharing and the public sector

  • Private businesses, publicly held companies, crown companies, universities and colleges, transit, provincial/municipal owned companies, and not-for-profit organizations.
  • Not-for-profits have to demonstrate a shortage of work directly associated with a reduction in the organization's normal level of business activity – a tough case right now for hospitals and the broader public sector?
  • A new maximum of 76 weeks for work-share arrangements in response to COVID-19.

Pensions under work share agreements (HOOPP example)

  • The Employer must maintain all existing employee benefits -- including pension plans.
  • But, benefits calculated on earnings or hours of work -- like pensions -- will be reduced. - HOOPP allows for members to top up their contributions during a temporary period of reduced earnings as long as they’ve been employed by that employer for a minimum of 36 months prior to the start of the work-sharing arrangement.
  • This top-up can either be made periodically throughout the reduced earnings period or can be remitted to HOOPP no later than 6 months after the end of the temporary reduced earnings period.
  • Contributions are based on deemed earnings; what the employee was earning before the period of reduced earnings. If a member does not opt to top-up contributions within 6 months from the end of the reduced earnings period, the member forfeits their opportunity to contribute and the employer is relieved of responsibility to match the contributions.
  • HOOPP’s buy back rules do not apply.

Employers may have a veto on this "top up" provision. 5.5(2) of the Plan text says:

(2) Periods of Reduced Service Subject to section 4.2, a member who has been employed by her employer for a minimum of 36 months may, subject to the employer’s consent, elect to make contributions for a temporary period of reduced service and pensionable earnings that qualifies as an “eligible period of reduced pay” under the Income Tax Act. The member may make contributions, as if her service were not reduced, either during the period or within six months after the period ends.

  1. HOOPP Employer Administration Manual:

  2. HOOPP Plan Text:

Work Sharing LOU Templates

Work Sharing agreements are going to have to be tailored to each workplace and that an LOU template isn't enough.

The best thing that we can do is

  • negotiate an LOU saying you agree to suspend the parts of the CA that are related to hours of work
  • only for the length of time the work sharing is in effect
  • Identify that changes to hours of work must be agreed to by the union

Then, have a look at the EI Work Sharing form's Part 2 (Part 2: Work-Sharing unit information) and include the answers to those questions in the LOU or in a subsequent LOU.

  1. Hours reduced
  2. Which days they are not working
  3. Who is covered by the work sharing agreement
  4. What jobs might be "shared" if there are multiple classifications that can be covered.

Much of the time is discussing where workers agree to reduce our hours to keep their fellow workers employed.

Note

There is no official template language at the moment because every local is different. However, you can start with something like this:

As a result of any EI Work Sharing Agreements made between the Union, Company, and Employment and Social Development Canada, the Company and the Union will agree to suspend Articles XX.X, XX.X with respect to guaranteed hours and normal hours of work for the members.

THE EMPLOYER will apply to Social Development of Canada for EI Work Sharing with full approval of the Union and its members.

Once the Workshare Program concludes and the members return to full time status, Articles XX.X will be reinstated, or upon 72 hour written notice by either the Union or the Company.

It is understood and agreed that the effected Membership is part of signing this Letter of Understanding, and their signature is acknowledgement of the current LANGUAGE in the Collective Agreement, and that they agree to waive these rights on a temporary basis under EI Work Sharing.

Work Sharing will result in the following changes:

  1. Hours reduced
  2. Days on EI Work Sharing and not working and how often:
  3. Who/which classifications and number is/are covered by the work sharing agreement
  4. What jobs/classifications might be "shared" if there are multiple classifications that can be covered.

And will include those who are currently on layoff:

  • member list

Work Sharing and Training

There are educational programs our members can have access to and undertake training while on work sharing.

Below are a couple of scenarios from EI where Work Sharing can be used as an opportunity to further training. This can be employer or worker-led as the examples illustrate.

A worker on EI for a couple of days a week as a result of WS can use those days to train for something not necessarily workplace-related provided they meet the conditions laid out on the following link:

Example work sharing training scenario 1

Kim works at a small retail business. As part of the COVID-19 isolation measures, the provincial government has ordered all non-essential businesses to close. To remain viable and avoid layoffs, the store’s owner, Tony, has decided to shift sales to an online platform. Tony and his employees agree to enter into a Work-Sharing agreement.

Kim requires assistance to learn how to operate in an online retail environment as she has limited technical skills. Tony contacts a provincial employment centre and is offered support through Employer-Sponsored Training, a measure available under the Labour Market Development Agreements. This provides financial support to help Tony cover the reskilling costs of his employees. Without this training, Tony fears that Kim and her colleagues may need to be laid off.

The salary costs for Tony’s employees taking part in this training are not compensated through the Work-Sharing Program, because the training will take place during normal scheduled working days. Under the Program, any training activities offered during non-scheduled working days for which the employees would be receiving Work-Sharing benefits would be optional.

Example work sharing training scenario 2

Mallory and Tim own an independent music production company based out of Toronto, and employ three staff. Due to a decrease in business resulting from COVID-19 isolation measures, Mallory and Tim’s employees have agreed to reduce their working hours by 50% under a Work-Sharing agreement.

Maxime works for Mallory and Tim and is worried about the future of the company and his job. Prior to pursuing a career in music production, he was close to completing the required courses to become a personal support worker.

Maxime visits a provincial employment centre on one of his non-scheduled working days and is offered financial support to complete the remaining training needed online outside of his scheduled work hours. While Maxime loves his job and his employers, he knows that these workers are in demand due to COVID-19 and there may be opportunity for him to help with recovery efforts.