New Employment Insurance Rules: What to Expect Should You Lose Your Job

Losing a job because your company has lost its market share or because the gadgets it's been making for centuries are no longer in demand is no shame. And receiving Employment Insurance (EI) benefits after such a job loss is no shame, either. After all, you have been paying into the scheme all your employed life, so, you are entitled.

Except, as the economy changes, so do the demands on the system. Which means it's got to change.

Changes to EI have been making headlines recently, but not many bothered to explain what exactly is happening.

Here's the deal:

From now onwards, it would be perfectly OK if you have to travel up to one hour to your workplace. This distance will not count as a good enough reason to claim benefits because you couldn't find employment round the corner.

Depending on how often you claim EI benefits, you will be expected to accept wages between 70 and 90 per cent of what you used to make.

Until the bill becomes law, there's no definition of what is "suitable employment": EI recipients must accept to continue receiving benefits. It's not known yet, either, just what constitutes a "reasonable job search." There exists outlines of what will be expected, but that's about all.

What we know now is simple: "suitable employment" will have to meet the following six criteria: personal circumstances, working conditions, hours of work, commuting time, type of work and hourly wage.


Twice a Day Emails
High-technology will become a part of job search: claimants will be getting emails twice a day, telling them of the latest career listings for their area of work from various job boards and other sources. Of course, no word yet on those unlucky souls who have no computers.

Also, Canadian employers will be told to first consider unemployed Canadians before applying for work permits for temporary foreign workers. Again, high technology will help take care of this angle.

To translate the government lingo: if you are, say, an out-of-work carpenter, and there is a carpentry job open at the other end of town, within a one-hour commute, you would be expected to take it rather than saying it's too far away and your card game soirees would suffer.

If you are out of work for a longer period of time, you would be expected to look for other types of work. Yes, it would be preferable if the job you find is close to your skill set, but it wouldn't be a precondition.

The idea is not to force people to work but to convince them it's better for them.

The government has put together three basic categories for EI claimants:

• Long-tenured workers (25 per cent of claimants): Claimants who have paid into the EI system for the past seven of 10 years and have received 35 or fewer weeks of EI regular/fishing benefits over the last five years. These people will get significantly more time to look for a job within their usual occupation and normal salary ranges, starting at 90 per cent of previous hourly wage. After 18 weeks on EI benefits, they would be expected to look around further and wider. Eventually, they would be asked to accept wages at 80 per cent of previous wage.
• Frequent claimants (17 per cent of claimants): EI claimants who had three or more regular and/or fishing claims and received more than 60 weeks of benefits in the past five years. Looking for jobs further away from home and, potentially, further from their original specialty, will have to start in the early stages of their claim. If the wages offered start at 80 per cent of previous hourly wage, that would be the cutoff amount. After seven weeks on EI benefits, they would have to accept any work they are qualified to perform and accept wages at 70 per cent of previous hourly wage.
• Occasional claimants (58 per cent of claimants): This group would include all other claimants. Generally, they would have limited experience of being unemployed and searching for work. These people would be allowed to limit their job search to their usual occupation and normal wages (at least 90 per cent of previous hourly wage). After they've been receiving benefits for seven weeks, they would be asked to expand their job search and accept 80 per cent of usual wage. After 18 weeks, they would have to further expand their job search to any position they're qualified for and accept 70 per cent of previous salary.

Here's what went wrong:

• Not enough Canadians are working. Employers (through all levels of governments) are looking for temporary foreign workers to fill the gap.
• The current system discourages EI recipients from accepting work while receiving benefits, telling them basically to just stay on EI for as long as they can.
• While Canada is the second largest country in the world, still, it borders on the unacceptable that conditions between regions are as different as they are. That holds even for regions that have markedly similar labour market conditions.
• Fraudulent abuse of the EI system has increased to about 70,000 such cases a year. Collecting on overpayments just can't save it: over the last four years, the government has written off nearly $125 million in EI overpayments that it seems to be unable to collect on.
• Summing up, the Canadian Federation of Independent Business - which represents more than 109,000 small-business owners across the country - believes too many Canadians are abusing the EI system.

Summary of changes

The 425-page omnibus budget Bill C-38 amends sections of the Employment Insurance Act relating to the kinds of jobs EI recipients are expected to take to receive benefits. The changes would give cabinet the power to define what is "suitable employment" and the types of positions people on EI must accept if they want benefits.

The details won't be known until after the bill is approved by Parliament.

The bill, once it becomes law, will not be forcing Canadians to relocate or take jobs outside their skill sets to receive EI benefits in the future.

It will cost $387 million over two years for the government to link benefits to regional labour market conditions. The basic idea is to remove the "disincentives" to accepting all available work while applying for or receiving EI benefits (including reducing the benefits clawback when working while on EI). The other idea is that Canadians living in regions with similar unemployment rates receive similar benefits.

There will be more incentives and support for seniors, youth, aboriginal people and persons with disabilities to work.

According to the federal budget, there needs to be more clarification of requirements claimants receiving EI benefits will face. The approach will be more individualized, too.

Repeat claimants can expect to be told to take lower-paying jobs than Canadians receiving EI for the first time.

Employment Insurance basics:

Q: What is Employment Insurance?
A: It's a federal program that provides workers who are involuntarily unemployed with financial compensation and some means of subsistence until other employment is found.

Q: Who pays for it?
A: The EI plan is financed by premiums collected from workers and employers. The accumulated funds cover both the benefits paid to unemployed Canadians and administrative costs. Workers pay EI premiums of $1.83 for every $100 of wages until the annual maximum salary of $45,900 has been reached. The maximum contribution amount is approximately $840.

Q: How long do you have to work to be eligible to collect EI?
A: In most cases, Canadians must have worked a minimum of 420 to 700 insurable hours prior to unemployment, depending on where you live in Canada and the unemployment rate in the region.

Q: How much can I receive?
A: The basic rate is 55 per cent of your average insured earnings up to a maximum insurable amount of $45,900: you can receive a maximum payment of $485 a week. Low-income families can receive a higher benefit rate.

Q: How long can Canadians receive EI benefits?
A: From 19 weeks up to a maximum of 45 weeks, again depending on the unemployment rate in your region and amount of insurable hours accumulated.

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