EI Premium Reduction Program
Canada
Money for employers
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|noCondition
grant_single|deadlines
- grant_single|openingDateSeptember 22, 2020
grant_single|financingType
Grant and Funding
grant_single|eligibleIndustries
- grant_single|allIndustries
grant_single|grantors
- Employment and Social Development Canada (ESDC)
- Government of Canada
grant_single|status
grant_card_status|open
grant_single_labels|preview
You could get a premium reduction in the short-term disability benefits you pay to your insured employees.
grant_single_labels|terms_and_conditions
The EI Premium Reduction Program offers employers lower EI premium rates by providing short-term disability plans that qualify under specific conditions. This reduction aids in cost efficiency for employers while ensuring employee benefits.
- Employers can obtain reduced EI premium rates when employees are covered by a qualifying short-term disability plan.
- Rates of premium reduction are categorized based on the type of short-term disability plan provided and the duration it meets the program’s requirements.
- The reduction rate is expressed as a percentage of the employee's insurable earnings, impacting the employer's premium calculations.
- Employers must continue providing five-twelfths of the savings from the reduction to the employees covered by the plan.
- Reduced rates require the employer to wait for an entitlement decision from Service Canada before applying the new rate.
grant_single_labels|projects
grant_single|admissibleProjectsExample
$ 20,000
Implementing a short-term disability plan for a new software development startup
$ 20,000
Establishing a comprehensive short-term disability plan for employees at a non-profit organization
$ 20,500
Implementing a short-term disability plan at a social economy enterprise
$ 25,000
Introducing a short-term disability program at a financial cooperative
$ 25,000
Implementing a new short-term disability plan for employees at a local manufacturing company
$ 25,000
Introducing a new short-term disability plan for employees at a legal firm
grant_single_labels|admissibility
Eligibility for the EI Premium Reduction Program requires that the employer-provided short-term disability plan meets specific criteria.
- The plan must provide at least 15 weeks of benefits for short-term disability.
- The benefits provided by the plan must match or exceed those offered under EI regulations.
- Benefits must be disbursed to employees within 8 days of illness or injury, with an elimination period not exceeding 7 consecutive days.
- Employees must have access to the plan within 3 months of their hiring date.
- The plan must cover employees on a 24-hour-a-day basis.
- The employer must provide evidence of commitment to the short-term disability plan.
- The employer must undertake to return five-twelfths of the savings from the premium reduction to employees covered by the plan.
grant_eligibility_criteria|who_can_apply
Employers who have insured employees covered by a short-term disability plan may apply. Insured employees are those on whose behalf an employer remits EI premiums to the Canada Revenue Agency (CRA).
grant_single_labels|criteria
The evaluation and selection criteria for the EI Premium Reduction Program are based on the short-term disability plan provided by the employer and whether it meets specific requirements. Employers must ensure their plans meet the minimum criteria to qualify for a premium reduction.
- Provide at least 15 weeks of benefits for short-term disability
- Match or exceed the level of benefits provided under EI
- Pay benefit to employees within 8 days of illness or injury (the elimination period cannot exceed 7 consecutive days)
- Be accessible to employees within 3 months of hiring
- Cover employees on a 24-hour-a-day basis
grant_single_labels|register
- Step 1: Verify Eligibility
- Ensure your short-term disability plan meets all the basic requirements laid out in the program guide.
- Step 2: Prepare Required Documentation
- Prepare a copy of the short-term disability plan(s) you provide to employees.
- Gather any applicable collective agreement(s) related to employees covered by the plan.
- If available, prepare a written mutual agreement regarding the return of the employees' portion of the reduction.
- Step 3: Complete Application Form
- Access the application form for Employment Insurance Premium Reduction (NAS5022).
- Fill out the form with accurate details about your organization and the short-term disability plan.
- Step 4: Submit Application
- Submit the completed application form and all required documents to the Service Canada office handling EI Premium Reduction.
- Ensure any missing documentation is provided within 30 days if requested by Service Canada.
- Step 5: Await Decision
- Await written notification from Service Canada regarding the outcome of your application.
- If approved, receive the reduced EI premium rate and recalculate your payroll as necessary.
- Step 6: Address Any Issues
- If not approved, carefully review the reasons provided and consider resubmitting with modifications, or appeal if necessary.
grant_single_labels|otherInfo
Here are additional relevant details for this grant:
- The Premium Reduction Program requires employers to refund five-twelfths of the savings to the employees covered by their plan.
- Employers must maintain sufficient documentation proving the eligibility of their short-term disability plans and must be prepared to submit additional documentation upon request within 30 days.
- If granted a reduction, employers might need to adjust their financial calculations retroactively from January 1 of the calendar year in which the reduction applies.
- A written appeal can be submitted within one year if the employer disagrees with a non-entitlement decision.
- Employers must notify the program of changes to their short-term disability plan, address, payroll deductions account, ownership or organizational structure.
Apply to this program
Maximize Savings with the EI Premium Reduction Program
The EI Premium Reduction Program provides Canadian employers with an opportunity to reduce their Employment Insurance premium costs by implementing a qualifying short-term disability plan for their employees. This initiative aims to alleviate financial burdens while encouraging businesses to offer robust employee benefits that match or exceed EI levels.
Unlocking the Benefits and Requirements of the EI Premium Reduction Program
The Employment Insurance (EI) Premium Reduction Program represents a strategic financial incentive for Canadian employers committed to enhancing their employee benefits packages. By offering a qualified short-term disability plan, businesses can reduce their EI premium contributions below the standard 1.4 times the employee rate, thereby achieving cost savings while providing enhanced security for their team. This program is particularly beneficial for employers aiming to boost employee welfare and satisfaction through superior benefit offerings.
Participating in this program requires employers to meet specific criteria, the cornerstone of which is a short-term disability plan that is accessible within three months of hiring, and pays benefits within eight days following illness or injury, for at least 15 weeks. This ensures that employees are not left vulnerable during initial employment months or left waiting during critical periods of illness or injury. Additionally, the plan must cover employees around the clock, emphasizing comprehensive employee protection. Such stringent standards not only reflect the program’s commitment to employee welfare but also align with the increased EI sickness benefits which have extended from 15 to 26 weeks since December 18, 2022, without altering the basic qualifying requirements for premium reductions.
The financial advantages of participating are significant. The program categorizes eligible plans into four main types, ranging from cumulative paid sick leave plans to weekly indemnity plans offering varying weeks of benefits. Each category is assigned a distinct rate of premium reduction, calculated annually by the Canada Employment Insurance Commission. Employers must choose the appropriate category based on their existing or proposed benefits plan, with the highest reductions reserved for the more comprehensive coverage such as the enhanced cumulative paid sick leave with at least 125 days accumulation.
Employers who successfully register their plans stand to benefit from more than just cost reductions; they also meet an obligation to return at least five-twelfths of their savings to employees, fostering a shared benefits approach that can enhance employer-employee relationships and improve workplace morale. However, it’s crucial to maintain paperwork integrity, including all versions of contracts like mutual agreements and collective agreements, to ensure transparency and compliance within the program.
The process to apply involves submitting detailed documentation of the disability plan, with provisions in place for subsequent submissions of missing documents within a 30-day notice. Employers are also advised to manage their payroll adjustments in accordance with their newly reduced rates. Adjustments are retroactive from January 1 if the application is approved during the year, ensuring businesses leverage their new rate from the start of the fiscal period, thereby maximizing savings.
Moreover, for employers considering broadening their program coverage to include new employee groups, additions must be communicated promptly to benefit from the diffusion of EI rate reductions across the new categories. Furthermore, any legal or organizational restructuring that affects the payroll deduction accounts must be reported to maintain ongoing compliance and ensure an uninterrupted benefit flow.
This program is not just a financial relief opportunity but also a stepping stone towards operational excellence. Offering comprehensive short-term disability coverage can differentiate businesses within competitive markets, showcasing a commitment to employee welfare that aligns with modern business ethics and legal requirements. In essence, participation in the EI Premium Reduction Program can be a strategic advantage, promoting financial savings while supporting a culture of care and resilience amongst employees.
