November 27, 2017

in Benefits & Health, Government Updates

What does the new Canadian parental benefit mean for employers?

As of December 3 the Government of Canada will be providing individuals with parental benefit options as announced earlier this year in the Federal Budget. Parents with a newborn or newly adopted child can choose from the following:

  • Standard parental benefits – parents can receive EI parental benefits for up to 35 weeks (12 months) at 55% of their individual average weekly earnings to a defined maximum.
  • Extended parental benefits – parents can receive EI parental benefits for up to 61 weeks (18 months) at 33% of their individual average weekly earnings to a defined maximum.

The total EI benefit paid within both options is approximately the same.

WHAT DOES THIS MEAN FOR AN EMPLOYER?

Employers should review their top up policy to ensure that it reflects their intent. For example, depending on the policy wording, an employer may be committing to provide a top up from the reduced 33% benefit, not the full 55%, which will increase the benefit to the individual and increase employer cost.

Employers and employees alike should note that the extended EI parental benefit period does not align with the length of job protected leave under employment standards legislation in all provinces. Some provinces are updating their legislation to reflect the new changes. An organization may wish to consider updating their maternity/parental leave policy to reflect how they will respond to employee requests for this extended leave.

If you have additional questions about the parental benefit and how your organization should proceed contact your Accompass consultant at 416 969 8588.