Q&A: Employment Insurance ("EI") and Severance

Q&A is a recurring series on the Vey Willetts LLP blog. The aim is to provide quick answers to questions we commonly encounter in the day to day practice of being neck deep in workplace law. In this edition we focus on employment insurance ("EI") claims. 

Most workers are entitled to claim EI regular benefits (sometimes still called 'unemployment insurance' or 'UI') when they lose their job through no fault of their own. However, the process to access benefits can often be a slow and frustrating one. Below we answer some of the most frequent questions we get from individuals about EI benefits:

Question: How long after I lose my job do I have to file for EI benefits?

You should apply for EI benefits as soon as possible after you lose your job. If you delay longer than four (4) weeks, you can risk not being able to access benefits.

Question: My employer hasn't given me a copy of my Record of Employment ("ROE"). Can I claim EI anyway?

One common point confusion for workers is how and when they are entitled to receive their ROE from their employer. At present, employers can issue ROEs either in paper or electronically. If they choose paper, you should expect to receive a copy and be able to take this with you when applying for benefits.

Alternatively, employers can instead submit ROEs directly to Service Canada online. If this is done, the employer is not required to give the worker a paper copy (though many often do as a point of courtesy). Should your employer have filed an electronic ROE, you can access it online at: http://www.servicecanada.gc.ca/eng/online/mysca.shtml

Employers are required to issue an ROE shortly after any significant interruption of earnings (such as a lay-off or dismissal). Generally this should occur no later than five (5) calendar days after your last pay period.

If your employer for whatever reason fails to provide you with your ROE (or have it filed electronically), do not wait forever. Gather what documents you have that can demonstrate your employment (such as T4s, pay stubs or work schedules) and work with Service Canada to see that your claim is started.

Question: How long will it take for me to start receiving EI benefits?

Once you have been approved for EI, you may start receiving benefits within 28 days of when your application was received by Service Canada. However, be aware that if you have received severance, this can delay the start of your receipt of EI benefits (but will not disentitle you to them). This is due to the fact that severance is considered part of a worker's earnings and EI benefits only take effect following a period after the interruption of earnings.

To provide a simple example, if you are given five (5) weeks of severance, you can expect that your access to EI will be delayed by at least 5 weeks or more after your date of dismissal.

Question: How much can I expect to receive from EI? How long does it last?

Entitlements vary by region but you can expect to receive roughly 55% of your regularly earnings, to a maximum of $524 per week (as of January 1, 2015). Coverage can last from 14 to 45 weeks.

Question: I am fighting with my employer to receive additional severance. If I get more money, how will this impact my EI situation?

Receiving additional severance can affect your EI situation. Since how this works can be a little complicated, consider the following example:

John was initially provided with 1 month's severance pay by his employer, valued at $4500.00. He then went to Service Canada and was put on EI receiving $524 per week for a maximum of 20 weeks. Five months after he was dismissed, his employer agreed to pay an additional 3 months of notice, or a total of $13,500.00 in additional severance.

John reports this additional severance to Service Canada. He is then told he owes the Government $6812.00 for overpayment. This is because for a period of 3 months (the same length as his extra severance) he has received money from both his employer and Service Canada.

While this outcome might seem bad at first glance, there is an important upshot. As a result of John now having to repay 3 months' worth of EI, he is able to tack that period of lost EI benefits to fill the time after his enhanced severance ends. As a result, John may be able to eventually regain the money refunded to Service Canada for the overpayment if he remains unemployed.

So, in total, John's situation will look like this:

• Before Enhanced Severance:1 Months' Severance ($4500) plus 20 potential weeks of EI ($10,480) for a total of $14,980 of income support over a period of 24-25 weeks.
• After Enhanced Severance:4 Months' Severance ($18,000) plus 20 potential weeks of EI ($10,480) for a total of $28,480 of income support over a period of 37 weeks.

Additional severance can admittedly cause a hassle with regards to EI interruption and repayment. However, if you are struggling to find new work enhanced severance can be made to work with EI to put a dismissed worker in a far better financial situation than he or she might be otherwise.

*This Q&A session provides general information. It should not be relied upon as specific legal advice. Please contact an employment lawyer to discuss your specific circumstances.*