01 Feb Wage Subsidies: Employers in Ontario
There are many employers that are losing money from the fallout of COVID-19. There has been a substantial decrease in financial opportunity for so many people. Currently, the Government of Canada is providing the Canada Emergency Wage Subsidy (CEWS) to help businesses that have been adversely affected. Businesses can calculate their subsidy based on loss of revenue. While the original program required a minimum drop in revenue, there is now no minimum that businesses must need to qualify. There is, however, an “eligible revenue” requirement, which means that the revenue has to be earned by either selling goods, rendering services, and others’ use of the resources. Specifically, for employers, CEWS “enables employers to re-hire workers previously laid off, and to keep those who are already on payroll.” Employers must indicate their loss of revenue they have suffered during each period as this number may shift based on revenue loss.
New changes to Canada Emergency Wage Subsidies (CEWS) in periods 11 through 13 (December 20, 2020 – March 13, 2021):
- The top-up subsidy rate is now 35%
- The max subsidy for employees on leave is now $595
- The base revenue drop comparison months for this period has remained the same from the last period. Period 10 had a one-month revenue drop to calculate the top-up rate and base rates. Meaning, for period 11 just like period 10, you can use the new top-up calculation or calculate the average drop of the past three months.
What is a top-up CEWS?
Top-up CEWS is providing wage subsidies for a revenue decline that is now over 35% (as it has changed this period from 50% in previous terms to 35% this term.)
What is base CEWS?
Base CEWS is providing wage subsidies to any decrease in revenue. The subsidy amount is calculated by the percentage of lost revenue and declines in successive periods.
As an employer, as outlined by the Government of Canada, you can qualify for CEWS if you meet the following criteria:
- An individual employer
- A corporation or trust. However, only those that are not exempt from income tax.
- Non-profit organizations and non-profit organizations that focus on scientific research
- Agricultural organizations
- Chambers of commerce
- Labour organizations
- Boards of trade
- An employer can qualify from specific organizations such as:
- Indigenous government-owned corporations
- Partnerships with eligible employers
- Partnerships with both eligible employers and certain Indigenous governments
- Registered Canadian amateur athletic associations
- Registered journalism organizations
- Private schools
Employers that do not qualify are those that are affiliated with public institutions.
If you have more questions about how CEWS works, or whether you qualify; contact KCY at LAW by filling in an online consultation request or contact us by phone at 905-639-0999 to book your consultation today.