Step-by-Step Guide to CEWS
for Eligible Businesses that have Closed Down with No Revenue
April 17, 2020
Due to COVID-19, many businesses were forced to lay off some or all of their employees due to a significant reduction in revenues. Now that the government has released the details of the Canada Emergency Wage Subsidy (CEWS) program, many clients have been asking us the following questions:
Can my business hire back laid-off employees?
If so, will my business receive full reimbursement under the government’s new Canada Emergency Wage Subsidy (CEWS) program?
The answer to both of these questions is: Yes!
To do so, follow the steps outlined on this page.
Not sure if you’re eligible for CEWS?
Click here for more information on CEWS program eligibility criteria.
Step 1 – Determine each employee’s baseline compensation
- Calculate the average weekly compensation received by each employee during the period of January 1 to March 15, 2020.
Step 2 – Determine the amount of the subsidy available for each employee
This will be the lesser of either;
- 75% of the weekly baseline compensation calculated above
- $847 per week
This figure will be the maximum amount that will be reimbursed by the wage subsidy.
As long as the employees remain on unpaid leave (at home not working) the CEWS will also reimburse 100% of the employer portion of CPP and EI contributions, up to the maximum weekly rate.
Step 3 – Rehire the employees
Your employees can then be rehired at the (reduced) rate calculated above. Please note that it is important that rehire date is no later than either:
- April 24th for the 2nd claiming period (April 12 to May 9)
- May 22nd for the 3rd claiming period (May 10 to June 6)
This will avoid the situation where employees are unpaid for 14 consecutive days during the claiming period, as this would make them ineligible for CEWS.
Step 4 – Submit the application for the subsidy
The government will create a dedicated website for CEWS application, likely during the month of May. Once this is active, go online and apply for the subsidy.
We would also encourage you to sign up for a CRA My Business Account as this will allow you to receive direct deposit for quicker reimbursement.
Eligibility for the subsidy requires a 15% revenue decrease for March 2020 and a 30% revenue decrease for April and May 2020
Eligibility for the 2nd claiming period will mean automatic eligibility for the 3rd claiming period as well.
Funding for the wage subsidy will not be available until mid to late May 2020. This means that the sufficient cash flow must be available to cover 2 to 3 pay periods prior to receiving the subsidy from the government.
In these unprecedented times, we understand that there is a lot of information to disseminate.
We at Provision are here to help you in any way we can. Feel free to reach out directly to your contact at Provision for more details and clarifications.
604-273-6601 ext. 109
604-273-6601 ext. 112
604-273-6601 ext. 104
604-273-6601 ext. 105