Last week, Montridge hosted an expert panel answering your questions about returning to the workplace. They offered their insight and advice on how to make sure employers are doing everything in their power to make this time of transition smooth.
The speakers included:
- Dan Roberts - Partner, Tax, BakerTilly WM
- Kandy Cantwell - Managing Partner, Montridge Advisory Group
- Mike McCormack - Director of Business Development and Risk Management Services, Westland Insurance Group
- Ryan Anderson - Partner, Mathews Dinsdale & Clark
- Sara Bauer - Senior HR Consultant, Chemistry Consulting Group
The following is a summary of the first half of our webinar, where we answer questions related to government programs, temporary layoffs, insurance policies, and more.
The full 75-minute webinar, which includes answers to questions about remote work, transit concerns, and how to create a return to work plan, can be downloaded for free here.
Government Relief Programs for Employees and Employers
Many employees applied for the Canadian Emergency Response Benefit (CERB) when it became available. One question many employees have is whether those who were laid off and not brought back will need to apply for EI a second time. Under the CERB, employees are only eligible for 16 weeks of relief. Employees who were laid off and applied for EI at that time should not have to apply again. Employees who did not apply will need to apply.
Whether individuals will have access to EI is unclear. Typically, employees would be required to meet the criteria in order to qualify to receive EI, which means having worked a certain amount of hours in the previous months. Those who have been claiming the CERB may not meet that criteria.
Right now, there is no clear direction which way this will go. We are waiting on government guidance.
The other government program many people are asking about is the Canadian Emergency Wage Subsidy (CEWS), which many employers applied for when it became available. Currently, employers can apply until August 29th, though the government is expected to extend the program.
The CEWS does not require employers to keep employees on payroll. Rather it provides a subsidy for those who choose to keep an employee on payroll. If an employee decides not to return, it becomes an employment law question about whether an employer must keep said employee on payroll.
Temporary Layoffs and Severance Pay
Another big question is what happens to temporarily laid off employees. The BC employment standard act states that temporary layoff is not permitted unless it is part of an employee’s contract, is considered industry custom, or the employee agrees to be temporarily laid off. Few employers explicitly asked their employees permission to be temporarily laid off. However, most employees accepted the lay off without complaint, which lawyers are taking as a form of agreement.
So the question is how long can they be laid off? In B.C., the answer is 13-weeks in any consecutive 20-week period. Under COVID, 13 weeks has been extended to 16 weeks. At the end of the 16-weeks those employees are deemed terminated.
What happens then? If employees are deemed terminated that may trigger notice requirements, which includes group termination liability. If you have 101 employees deemed terminated that all make $42,000 a year, the group termination liability is $930,000 dollars. Lots of medium sized businesses will have 100 employees that could be deemed terminated at the end of this process, and a million dollar severance liability is the end of most of those businesses.
There is an exception. Liability does not apply if the employer can prove that the termination is the result of an unforeseen circumstance or event. The position of employers and lawyers is that COVID-19 is an unforeseen event. Many provinces have come out and said unequivocally that COVID-19 qualifies as an unforeseeable circumstance.
The BC government hasn’t clarified if COVID-19 provides exemption from termination liability. The closest they have come is a statement that says it might apply if the termination was directly caused by the pandemic. This does not provide the clarity employers are looking for.
Current advice is for employers to not concede liability. If your employees remain temporarily laid off for more than 16-weeks, most employers should take the stance that this is due to an unforeseen circumstance and doesn’t trigger termination pay liabilities.
For employers headquartered in other provinces or with employees reporting to work in other provinces or territories, it is vital to consult the applicable legislation as there is variation between jurisdictions.
Change to Benefits Plans
The vast majority of small and mid-sized employers tried to maintain benefits during layoffs. Insurance companies should be commended for working with these businesses to keep their benefits plans active.
Going forward, each employer will have to look at their total rewards strategy and where their benefits plan fits in. At the end of the day, the employer needs to be able to cut the cheque. If an employer is in a cash flow crunch and can’t afford the benefit plan they currently have, they need to decide where they are going to cut spending to make things work.
Employers should also consider the potential stress added by cutting benefits offerings. Employees might already be stressed due to reduced hours or pay. If an employee’s partner lost their job or had their benefits cut, your offerings will be that much more valuable to them during this time. So consider the effect reducing your benefits offerings can have on your employees. A benefits advisor can help show you what other companies are doing and how to help you navigate through these decisions.
This pandemic has also made people realize how fragile their financial situations are. They will be looking to their employers for help on how to strengthen that, either through retirement savings programs, other savings programs, or through education. Many employers are being asked by their team to provide help so that they can better understand how to manage debt, how to reduce costs, and how to save wisely.
Business Interruption Coverage
Business interruption insurance is typically tied to your commercial insurance policy under the property section. Property insurance and business interruption insurance dovetail together. Property insurance covers a business’s physical assets. Property insurance responds to direct physical loss or damage to property. Business interruption insurance responds to indirect loss and the impact that damage to property has on damage to one's expenses.
For example, if there's a fire, property insurance responds to the cost of fixing the damaged building. Business interruption insurance would cover the revenue loss resulting from business being put on hold while the building is repaired.
The key here is that coverage is tied to a disruption from direct physical loss, damage or destruction of an insured property. The current attitude is that COVID-19 does not constitute physical loss to businesses. Social distance does not trigger property insurance.
Some insurance policies may include specific exclusions for loss or damage arising from contamination, and some may even contain virus exclusions. And if they don’t now, they probably will in the future.
Generally speaking, the odds of business interruption insurance being provided in response to COVID-19 is highly unlikely although it is worth consulting your commercial insurance advisor as some policies may provide limited assistance
Keeping your team engaged is really important during this time. One of the main factors contributing to engagement is communication. It’s very important to have clear communication with your team. As your transition back to the workplace, your team is going to have a lot of questions and want to know what the new normal looks like.
As you develop your return to work plan, ensure you communicate that plan clearly, addressing questions and concerns every step of the way. When the team is back in the office, sit down with each team member and clarify the expectation and role within the team.
For those who were working remotely, many responsibilities were changed during this time. Some took on extra roles to make up for laid off employees, while others found their duties were altered to accommodate remote work.
Other employees have been laid off for months, and getting back into the daily work routine will take a period of adjustment.
Help your team understand the new direction and how they play a part in that. Also be patient and flexible with your team. Understand that the last few months have been challenging for everyone and that as you return to work, team members will have concerns. Have frequent check-ins, and make sure they’re doing okay. You know your team well. If you’re sensing that someone needs extra support, do what you can to help them.
Encourage your team to reconnect. Inject some fun into your workplace. Try to get creative. Have a parking lot picnic or Zoom happy hours. Do what you can to encourage your team to stay positive and have fun together.
Show your team empathy and support, communicate clearly and frequently, and show them the support they need as they return to work.
Illness and Prevention
The potential spread of COVID-19 around the office is undoubtedly a fear for employers. When it comes to sick days, employers have a right to insist that employees use them when they say they’re not feeling well.
The other concern is the proper use of PPE in the workplace, with a special consideration for masks. Employers can establish as part of their return to work protocol that a mask must be worn. However, be alive to employee concerns. Some will have objections based on pre-existing health conditions, and potentially religious grounds.
The really challenging question is around privacy in this environment. Privacy legislation and privacy law requires that employers very carefully manage the confidentiality of any information associated with medical issues. Even minor details like temperature checks and health questionnaires are considered medical information and are considered the most sensitive private information.
This difficulty really arises when protecting the privacy of an employee with a confirmed case of COVID-19. You are obligated to go back and tell anyone they’ve been in contact with to let them know so they can self-isolate. That can be very difficult to do without making it obvious who the individual is.
What we recommend is that you do your best to protect the identity of the individual. Approach those who may have been in contact and tell them that we’ve identified a potential covid case, that they’ve had contact, and that they must self-isolate for 14 days. Sometimes that will inevitably out the person with COVID. Do your due diligence, do your very best to maintain confidentiality, but also accept that sometimes that won’t be possible.