Employee Benefits

New Parental Leave Benefits – How Will They Affect You?

By Kandy Cantwell on November, 10 2017
4 minute read

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The federal government is changing the rules governing parental and maternity leave in Canada. These updated rules, announced on Thursday, November 9 will come into effect December 3, 2017.

What do these new rules mean for your business and how can you plan for the changes?

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Here is what you need to know the new parental leave laws:

  • New birth moms and surrogates will still be eligible for 15 weeks of maternity benefit, but can now start claiming the maternity benefit 12 weeks prior to their due date (currently eight weeks).
  • Parents have the option to apply for either the current 35 weeks of Parental leave, or the new option of 61 weeks. Combined with Maternity Leave, the new leave is 18 months in length.  
  • If parents elect to stay with the 12-month benefit, the EI calculation will remain at 55% of gross weekly income to a maximum of $543 per week.  
    If the election is made to take the 18-month benefit, then after the first 15 weeks, the EI calculation will reduce to 33% of gross weekly income, up to a maximum of $326/week (based on 2017’s Maximum Insurable Earnings (MIE)).
  • The Family Caregiver benefit has been expanded, to include:
    • Added flexibility to care for critically ill or injured children
    • A new 15-week leave to care for a critically ill or injured adult

These changes immediately apply to employees in federally-regulated industries, as the Canadian Labour Code has already been amended. It is expected that provinces will amend their Employment Standards legislation to ensure the remaining 92% of eligible Canadians also have access to these options.  

Employees currently on maternity or parental leave prior to December 3, 2017 are not eligible for the new 18-month option.  

It should be noted that these changes do not apply to employees in Quebec, as the province has its own Quebec Parental Insurance Program.

As an employer, there are a number of considerations that may require action prior to December 3rd.

How will your Business be Affected by the New Parental

Leave Laws? 

Parental Leave Salary Top-Ups

Does your company offer salary top-ups to staff on parental leave? If yes, then your schedule may need to be adjusted to accommodate 18-month leaves. The following illustration demonstrates what would happen if wording was not altered, and an employee chose an 18-month leave within the current top-up arrangement:

Presume your employee earns $52,000/year ($1,000/week) and your company tops up to 80% of gross income after the EI waiting period.  We have also used the 2018 EI MIE of $547/week for this illustration.

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Collective Bargaining Agreements (CBA)

Does your Collective Agreement have specific wording regarding a 12-month parental leave? If yes, it should be amended to accommodate 18-month leaves. With mutual consent, CBAs can be re-opened for modifications.

Employee Benefits During Leave

Parental leaves are considered protected leaves under Employment Standards legislations. Therefore, employees retain their position, seniority, vacation time accrual, etc. during their time off.

When it comes to employee benefits, the following rules apply:

  • If an employer pays 100% of the benefits premium, benefits must be continued for the duration of the leave.
  • If the employee pays a portion of their benefit premiums – and wishes to continue during their leave – benefits must continue for the duration of the leave.
  • If the employee pays a portion of their benefit premiums – and does not wish to continue during their leave – benefits can be terminated for the duration of the leave. Benefits commence once the employee returns to work.

It is important that policy and procedure manuals be updated to ensure the wording accurately applies to 18-month leaves.

Family Caregiver Benefit

Wording in employee handbooks and HR manuals should be updated to reflect the new adult benefit.

The role of an employee benefits advisor

Please let us know if you need help with any of the above changes to ensure your company and its policies are compliant prior to December 3rd.

An experienced employee benefits advisor is always up-to-date on changes in benefit and insurance law. They can help you stay on top of your responsibilities as an employer, keep your business running smoothly, and avoid potential litigation issues.

To learn more about how to choose the best advisor for your business, download our free resource: 7 Essential Tips When Selecting an Employee Benefits Advisor >>

7 Essential Tips When Selecting an Employee Benefits Advisor

Employee benefits solutions are more complex than ever. Learn what you need to look for when selecting a benefits advisor.

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