All about Employment Insurance (“EI”)

employment insurance

Employment Insurance

September 24, 2020 Update: As the CERB ends, there is a new system for EI. Read all about it here.

Interested in learning about employment insurance (EI) regular benefits, sickness benefits, emergency benefits or parental benefits? Read our guide to employment insurance in Canada below.

What is employment insurance?

Employment insurance is money from the federal government paid to eligible employees who stop working. Employment Insurance provides partial income replacement when an employee stops working for the following reasons:

  1. If an employee is terminated without cause;
  2. If an employee resigns with cause (i.e. a constructive dismissal);
  3. If an employee stops working because they are sick;
  4. If an employee stops working because they have taken parental leave or maternity leave; and
  5. If an employee stops working because they have to provide care for family.

There are different kinds of employment insurance:

  1. Employment Insurance Regular Benefits are paid to people when they lose their job or resign with cause.
  2. Employment Insurance Sickness Benefits are paid to people who stop working if they are sick,
  3. Employment Insurance Maternity Benefits and Employment Insurance Parental Benefits are paid to birth mothers and all parents when they take a maternity or parental leave.
  4. Employment Insurance Caregiving Benefits are paid to people caring for critically ill or injured or needing end-of-life care family members.

Employment Insurance Regular Benefits

Employment Insurance Regular Benefits is the normal kind of “EI”. It is the money paid to employees who lose their jobs through no fault of their own.

Individuals are eligible for Employment Insurance Regular Benefits if:

  1. They were employed in insurable employment;
  2. They lost their job through no fault of their own;
  3. They are without work and without pay for at least seven days in a row the last calendar year.
  4. They worked for the required number of insurable employment hours in the last calendar year or since the start of their last EI claim, whichever is shorter;
  5. They are ready, willing and capable of working each day;
  6. They are actively looking for work (you must keep a written record of employers you contact, including when you contacted them).

What is “insurable employment”?

Generally, work done in Canada, for which remuneration is received, is “insurable employment”. An hour of work done at work, regardless of whether it is on contract, salary or hourly is considered an insurable hour of employment.

Click here to read whether severance is considered insurable employment.

What does “lost their job through no fault of their own” mean?

To be eligible for EI, generally, you must have been terminated without cause. An individual is not eligible for EI if they were terminated for cause.

If you voluntarily left your job without just cause (unless you were constructively dismissed), you are not eligible for EI.

if you were dismissed for just cause (i.e. very serious misconduct), you are not eligible for EI.

if you are unemployed because you on strike you are not eligible for EI.

How many hours of insurable employment is required for EI?

To be eligible for EI, you need a certain number of insurable hours of employment.  Each region has different requirements. In prosperous regions, individuals need 700 hours in the last year, but in less prosperous regions, individuals only need to have worked 420 hours in the last year.

In addition, individuals who have in the past committed EI fraud or otherwise violated the Employment Insurance Act and its related regulations are required to work more hours to be eligible for EI.

Regional rate of unemploymentInsurable Hours Needed
6 % and under700
6.1 % to 7 %665
7.1 % to 8 %630
8.1 % to 9 %595
9.1 % to 10 %560
10.1 % to 11 %525
11.1 % to 12 %490
12.1 % to 13 %455
More than 13 %420

The chart for the regional rates of unemployment is here.

How much does EI pay?

Employment insurance regular benefits provide employees with 55% of their earnings up to a maximum of $573 a week. For example, if you made $800 per week, you would only be entitled to $440 in EI regular benefits. However, if you made $5,000 per week, you would only be entitled to $573 in EI regular benefits per week.

What does “ready, willing and able mean”?

Being “ready” to work means that your although you desire to find a new job, you have not been unable to.

Being “willing” to work means that you are looking for work and would accept a job that generally matched your abilities, skills, training, and experience.

Being “capable” of working means that you are able to work if you were hired for a job tomorrow. For example, are you physically and mentally up for new work?

How long is EI Regular Benefits?

You can get EI for anywhere from 14 weeks up to a maximum of 45 weeks. It all depends on the unemployment rate in your region and the number of insurable hours you’ve accumulated in the last year.

Service Canada’s number of weeks of EI you can get chart is here.

Do all workers get EI regular benefits?

If earnings have been reduced by more than 40%, a worker meets the qualification for EI regular benefits. It does not matter if the employee is on contract, paid hourly or by salary or commissions.

However, to be eligible for EI regular benefits, a worker will also have to meet all the above-noted criteria like the threshold of insurable hours of employment and that they lost their job through no fault of their own.

Workers working “under the table” will not have any insurable hours if they did not pay EI premiums tracked on their hours every paycheck, and therefore they will not be eligible for any kind of EI. Workers are encouraged to work legitimately and refuse “under the table” work relationships.

How long does EI take to get the first check?

Typically, there is one a week waiting period called a “deductible” where you will not receive EI regular benefits money.

If you are entitled to receive EI regular benefits, you should receive your first payment for the second week of unemployment within 28 days of the date Service Canada receives your application and all required documents. Then you will receive a payment every two weeks.

What happens while I am on EI?

When you are on EI, you will have to show every two weeks that you are still “ready, willing, and able” to work. You will fill out an electronic form online called a Report swearing this information. You will be mailed information on how to log in to the EI Report webpage.

In addition, while you are on EI, you could be required to attend at federal government offices where you will be interviewed about your job search and provided tips for finding new work. If you are asked to do this career/job search training, you must do so otherwise you could lose benefits.

Can I apply for EI if I quit my job?

Employees can get EI regular benefits if they quit their job for cause only. For example, an employee has cause to quit a job (also called a constructive dismissal) because of missed payments, harassment or a poisoned work environment. However, the employee will have to prove that they quit through no fault on their own. Usually, an employee will have to craft a narrative about why they quit, and the employer will be interviewed thereafter. Then, Service Canada will make a decision to pay EI regular benefits to a worker who quit or not.

However, each case is fact-specific, and not every resignation for what someone considers “cause” will be eligible for EI. It is a high threshold.

Click here to read examples of consecutive dismissal.

What happens if an employee is denied EI regular benefits?

Workers are denied EI regular benefits all the time, rightly or wrongly. Sometimes an employer makes a mistake (or lies) on the ROE, stating, for example, the employee quit or left on their own.

However, an employee can appeal an EI decision. To that end, sometimes it is as simple as clearing up a mistake on the ROE. Other times it will require the applicant to craft a narrative to state their own side of the story in an appeal called a Request for Reconsideration.

How to appeal a denial of EI?

If you disagree with a decision Service Canada made on your employment insurance regular benefits application you can request a Reconsideration.

Complete, print and sign the online request for Reconsideration of an EI decision form. Make sure to submit it to Service Canada in person or by mail within 30 days after the date the decision was communicated to you.

Next, Service Canada will review your request for reconsideration. Service Canada will read your side of the story, assess any new facts or evidence and then make a decision.

If you are denied EI again, you can appeal the decision to the Social Security Tribunal. You must file this appeal within 30 days after the day the Request for Reconsideration decision is communicated to you by letter or by phone. Fill out the form found on the SST website. The SST will notify Service Canada of your appeal.

You can hire an EI lawyer or paralegal for help on a Request for Reconsideration of an EI appeal to the Social Security Tribunal.

Are self-employed people entitled to EI regular benefits?

Self-employed people are not entitled to EI regular benefits. However, they are eligible for the following EI special benefits: maternity benefits, parental benefits, sickness benefits and family caregiver benefits if they registered for special benefits, paid special benefits premiums and met every other eligibility requirement (i.e. hours of work, etc.).

UPDATE: Just announced on March 18, 2020 by the federal government was the creation of an Emergency Support Benefit in response to the coronavirus. The Emergency Support Benefit will offer payments of undisclosed amounts to unemployed workers who are not eligible for EI. More information will be provided by the federal government soon, but we expect the Emergency Support Benefit to begin in April, 2020.

How to apply for EI?

Apply online for EI here. Make sure you apply within four weeks or you could lose benefits.

Do not wait for a severance package. However, know that severance will affect your EI entitlements if you get severance after you receive EI benefits. Read more here.

You can apply for EI regular benefits even if you have not yet received your Record of Employment (ROE)

Your employer will have to submit an ROE to Service Canada on your behalf after you stop working. Most employers submit ROE’s electronically to Service Canada. If an employer submits an ROE electronically, it does not need to send the employee a copy.

Click here to read what happens in case an employer is late submitting the ROE.

Employment Insurance Sickness Benefits

Employment Insurance sickness benefits provide employees with up to 15 weeks of income if they cannot work because of sickness.

Coronavirus EI sickness Benefits: Individuals with coronavirus COVID-19 symptoms, sickness, and quarantine are entitled to EI sickness benefits. To be clear, employees who stay at home in-self isolation or forced-isolation because of coronavirus but who are not sick are eligible for EI sickness benefits.

Employees are eligible for EI sickness benefits if they have paid EI premiums and have worked 600 hours in the past 52 weeks.  

Employment insurance sickness benefits provide employees 55% of their earnings up to a maximum of $573 a week just like EI regular benefits described above.

In applying for EI sickness benefits, employees are generally required to get a medical certificate from a doctor to show that they are unable to work for “medical reasons”.

However, because of the coronavirus pandemic, on March 11, 2020, the federal government announced that workers with COVID-19 symptoms, sickness or quarantine do not need a doctors note to apply for EI sickness benefits. In addition, the federal government enacted other measures to help coronavirus affected (symptoms, sickness or quarantine) employees, including:

  • Waiving the mandatory one-week waiting period to access EI sickness benefits.
  • Priority EI application processing for EI sickness claims for clients under quarantine
  • People who cannot complete their claim for EI sickness benefits due to quarantine may apply later and have their EI claim backdated to cover the period of delay

UPDATE: Just announced on March 18, 2020, by the federal government was the creation of an Emergency Care Benefit in response to the coronavirus. The Emergency Care Benefit will provide up to $900 every two weeks, for up to 15 weeks, to help Canadian workers who cannot go to work, do not have paid sick leave and do not qualify for EI sickness benefits. This includes those who are sick themselves, as well as those who are staying home to look after others who are sick or children who are not in school. Applications for the Emergency Care Benefit will be available in April 2020 and require Canadians to attest that they meet the eligibility requirements. They will need to re-attest every two weeks to reconfirm their eligibility. We expect further details soon.

Individuals can apply for EI sickness benefits here.

Employment Insurance Maternity and Parental Benefits

Maternity EI benefits are only available to birth mothers. However, birth mothers can receive maternity EI benefits and EI parental benefits.

Parental benefits are available both parents of a newborn or newly adopted child.

There are two kinds of EI parental benefits Canadians can choose: standard and extended parental benefits. The choice will affect how long benefits are paid and how much you are paid (see the below chart).

Parents can receive their EI parental leave benefits at the same time or one after another.

EI Maternity and Parental Benefits Eligibility

If you’re pregnant or have recently given birth you are eligible for maternity benefits. EI maternity benefits can start as early as 12 weeks before the expected date of birth and can end as late as 17 weeks after the actual date of birth.

If you are the parent of a newborn, you are eligible for parental benefits. Parental benefits must be used within 52 weeks after the child’s birth or when the child is placed with you. 

For EI maternity and parental benefits, an individual must have had at least 600 insured hours of work in the 52 weeks before the start of your claim or since the start of your last claim, whichever is shorter.

How much are EI maternity and parental benefits?

Parents who qualify are entitled to Maternity and Parental employment insurance (EI) from the federal government consisting of the following:

EI Type Maximum weeks Benefit rate Weekly max
Maternity (for the person giving birth) up to 15 weeks 55% up to $573

EI Maternity benefits are then followed by EI parental benefits:

EI Type Maximum weeks Benefit rate Weekly max
Standard parental up to 40 weeks, but one parent cannot receive more than 35 weeks of standard benefits 55% up to $573
Extended parental up to 69 weeks, but one parent cannot receive more than 61 weeks of extended benefits 33% up to $344

Birth mothers should apply for EI maternity benefits as soon as they go on Maternity Leave. Birth mothers will receive their first EI payment about 28 days after they apply.

If both parents have worked enough hours to receive EI parental benefits, they have to share these 35 weeks maximum of benefits. For example, one parent could claim 10 weeks and the other could claim 25 weeks. Parents cannot both take 35 weeks of EI parental benefits. The 35 weeks maximum must be shared, entitling the family to a combination of 35 weeks of EI parental benefits only.

Sharing EI Parental Benefits

Parents who choose to share can receive extra weeks of EI parental benefits.

When parents apply for and share parental benefits, one parent may be eligible for one of the following:

  • 5 extra weeks of parental benefits when choosing the standard option; or
  • 8 extra weeks of parental benefits when choosing the extended option.

This means that parents combined can now share up to 40 weeks of parental benefits with the standard option and up to 69 weeks of parental benefits with the extended option. However, one parent cannot get more than 35 weeks of standard or 61 weeks of extended parental benefits.

New EI System? (Update July 31, 2020)

On July 31, 2020, Prime Minister Justin Trudeau said in a news conference that CERB recipients will soon be transferred to an ‘updated’ employment insurance system.

This was just an announcement at a press conference, and there were only a few details released about the updated EI system, namely:

  • CERB recipients will be migrated to an updated EI system in September 2020.
  • There will be an EI sickness and caregivers benefit for people not covered at work if they contract COVID-19 or if a family member gets ill and they are required to take care of them.
  • For some who don’t qualify for EI right now, like gig or contract workers, there will be a transitional parallel benefit that is similar to employment insurance.
  • The new EI system will include the ability to work more hours without a steep clawback in benefit payments.

No other details were released. Importantly, we do not know what the eligibility requirements are for Canadians transitioning from the CERB to EI. However, more details about the shift from the CERB to EI have been promised by the Prime Minister by the end of August 2020.

Dutton Employment Law is a Toronto employment law group advising employees and employers in Ontario. Call for a free consultation with an employment lawyer or paralegal.