Employee considerations for Professional Practice during COVID-19

The ongoing COVID-19 pandemic and shutdown of non-essential businesses has placed unprecedented pressure on businesses across the country. Many practice owners are concerned about how they will keep their business solvent through an indefinite closure — yet remain ready to re-open and return to normal operations when restrictions are lifted.

Employees are also understandably fearful right now, especially given that layoffs have become all but synonymous with economic turmoil. Not to mention the paralyzing uncertainty around contracting COVID-19, the lingering threat of a prolonged economic slowdown and its impacts on personal investment portfolios.

As a practice owner, employer and mentor, you can take a leading role in helping to relieve some of the tension your employees and your business may be experiencing. In fact, the decisions you make right now, the way you communicate with your team members and the steps you take to protect them may define your business for years to come.

Options to keep employees working

With less work for employees and cashflow to pay them, you may worry layoffs are the only way to keep your business afloat. However, you may also worry what that means for your people, your ability to hit the ground running when the economy reopens and the potential cost of having to hire and train new employees down the road.

Thankfully you have a handful of options to either keep your workforce intact or drastically reduce the number of layoffs you ultimately need to undertake.

Canada Emergency Wage Subsidy (CEWS) — Your practice may be eligible for federal assistance to offset up to 75 percent of employee wages for up to 12 weeks. You can potentially even claim the CEWS retroactively to March 15, 2020.

Voluntary measures — Reach out to your team and see if anyone is willing to take a temporary pay decrease, use their accrued vacation time, reduce their hours or number of shifts and / or take an unpaid leave of absence during the ongoing slowdown.

Rotating layoffs — By putting select members of your team on temporary leave on a rotating basis, you can keep your workforce intact while still enabling those who aren’t working to claim Employment Insurance (EI) benefits.

Work sharing agreements — This tripartite agreement between you, employees and service Canada will provide income supplements to employees who agree to reduced hours and workloads. The federal government has increased the maximum duration of the work sharing program to 76 weeks due to the COVID-19 pandemic.

Supplementary unemployment benefit plan (SUBP) — If you have to issue temporary layoffs, a SUBP would allow you to top up your employees’ EI benefits. This would simultaneously reduce your wage costs and help maintain their standard of living during the work stoppage.

Employment law is complex and can result in significant employer costs if not navigated appropriately. We recommend consulting with a labour lawyer before taking any action.

Temporary layoffs

Depending on your practice’s circumstances, qualification criteria or financial situation, it’s possible the above options may not be enough to protect the business. In that case, you may have no other option than to consider temporary layoffs. While these are still preferable to permanent layoffs, they can also be complex and there are several factors you need to be mindful of.

• A temporary layoff may last up to 13 weeks in any period of 20 consecutive weeks. A layoff must be made permanent if it extends past that timeline.
• You may continue to provide employer benefits to temporarily laid off employees. These must be terminated once / if the layoff becomes permanent.
• You must issue a Record of Employment (ROE) to temporarily laid off employees. They will need this to apply for EI benefits.
• Employment contracts may or may not allow for temporary layoffs. Engage an employment lawyer to understand the options available to your practice and your employees.

You also need to be certain you will not require the services of furloughed employees on an emergency or ad hoc basis during their planned absence. Recalling temporarily laid off employees can interfere with EI benefits and significantly interrupt their income.

EI programs and resources

The federal government has waived both the one week waiting period to qualify for EI sickness benefits and the requirement for a medical certificate. If you have employees who are unable to work due to illness or self isolation, this will help them  access funds more rapidly. It will also ensure team members who may be at risk of transmitting the coronavirus are less likely to ignore social distancing measures and infect others at your workplace.

In addition, the Government of Canada announced a temporary Canada Emergency Response Benefit (CERB) of $500 per week for up to 16 weeks to support individuals that have either lost employment or are unable to work due to the pandemic. CERB and EI applications are now integrated within a single web portal on the Canada Revenue Agency website — removing much of the guesswork and ensuring qualifying Canadians receive the timely income supports they need during this uncertain period.

Because Service Canada has been inundated with applications and inquiries, you should encourage any qualifying employees to submit their applications as quickly as possible.

Other considerations

Never have we seen such conflict between people’s desire to work and their ability to focus completely on the task at hand. Employees are worried about their risks of contracting the coronavirus or may have to care for someone who has. School and daycare closures are creating significant childcare challenges. And some people are simply too afraid to go out in public.

As an employer, you need to strike a delicate balance between protecting and reassuring your people, protecting and reinforcing your business and staying onside with evolving legislation. Particularly with regard to the following three concerns: 

Communicate health and safety measures — Be open and clear with your employees about the measures you’re taking to mitigate the risk of contracting the coronavirus or other pathogens and issue frequent updates. Some steps you can take include:

• Regularly disinfecting high touch / high traffic spaces
• Making masks and hand sanitizer readily available
• Reducing the number of people in the workplace
• Installing barriers between customers and employees
• providing appropriate signage to assist with physical distancing

Be mindful of job protection measures for those affected by COVID-19 — Several provinces have passed legislation to ensure employees’ positions will be protected if they contract COVID-19 and must self-isolate or if they must care for someone with the illness. Review the relevant legislation in your region and be prepared to work with your team members to manage potential scheduling challenges as the pandemic continues to unfold. 

Seek legal advice if employees are refusing to work — COVID-19 is a serious threat to Canadians’ health, wellbeing and potentially their lives. Many people are understandably fearful about leaving their homes and being in crowded workplaces. Show empathy for employees who refuse to work, but also speak with labour lawyers about your options to keep the business functioning and safe for customers and other employees.   

To find out how MNP can help your professional practice navigate uncertainty and persevere during this unpredictable time, contact Jordan Weinberg, CPA, CA, Partner and Business Advisor, at 416.515.3857 or [email protected].