EI Sickness Benefits Extension: What Changes Mean for Employers

The federal government recently announced changes to Employment Insurance (EI) sickness benefits as a step forward in reforming Canada’s EI program. The changes are aimed at better meeting the evolving needs of Canadian workers unable to work due to illness, injury, or quarantine, by providing the time and flexibility they need to recover and return to work.

In Budget 2021, the federal government committed $5 million to consult Canadians over two years to inform future, longer-term reforms to the EI program. Key objectives include allowing more Canadian workers to access EI as temporary income support, ensuring EI benefits are adequate during periods of unemployment or critical life events, promoting an efficient labour market that enables unemployed workers to return to work when possible, and ensuring the program is affordable and financially sustainable for the workers and employers who pay into it.

What’s Changed

As of December 18, 2022, the maximum number of EI sickness benefits that can be paid to eligible workers unable to work because of illness, injury or quarantine was increased from 15 to 26 weeks. 

Qualified individuals with new claims on or after that date will receive EI sickness benefits paid at 55 per cent of their average weekly insurance earnings, up to a maximum entitlement of $638 for 2022. The changes offer improved support for employees with limited or no access to short-term disability benefits through their employers.

Claimants of EI sickness benefits need to demonstrate that they’re unable to work for medical reasons, their regular weekly earnings have decreased by more than 40 per cent for at least one week, and that they accumulated at least 600 insured hours of work in the 52 weeks before the start of their claim. Claimants also need a medical certificate signed by a medical practitioner when applying for sickness benefits. 

Implications for Employers

The extension of EI sickness benefits may impact benefit plan sponsors where disability benefits are tied to EI benefits. Employers should consider reviewing plan terms to ensure benefit plans reflect changes in EI eligibility. 

Organizations should consider the impact on short-term disability or paid sick leave plans and may need to review collective agreements. Long-term disability plans with elimination periods connected to EI sickness benefits could also be impacted.

Under the Premium Reduction Program (PRP), organizations that provide employees with qualifying short-term disability or sick leave pay a reduced EI premium rate. 

According to the federal government, the extension to EI sickness benefits will not have an immediate impact on the requirements wage loss replacement plans must meet to quality for a premium reduction under the PRP, and these requirements will remain unchanged for the time being.

Here to Help

If you have any questions about the extension of EI benefits and how these changes could impact your workplace benefits plan or offerings, please contact us for more information.

Suggested Reading:

Government of Canada improves sickness benefits under the Employment Insurance system

Reforming Canada’s Employment Insurance program

Additional Resources:

Canada Labour Code

Government of Canada: Employment Insurance sickness benefits