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.