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Two components of the changes in the Unemployment Insurance Program (UI) that were introduced in Bill C-12 substantially altered the relative costs and benefits of the program to workers on different weekly and annual work schedules: the extension of coverage to workers employed for fewer than 15 hours per week; and the change from a weeks-based to an hours-based formula for calculating program eligibility and benefit entitlement.

This paper examines two consequences of these program changes. First, we document the significant loss of benefit entitlement experienced by some part-time workers. Second, we generate evidence, based on Labour Force Survey data, that workers and firms responded to Bill C-12 by altering weekly work schedules in order to improve their chances of eligibility and benefit entitlement. We find that the proportion of jobs entailing fewer than 15 hours per week declined by about 5 percent in response to the extension of coverage to jobs in this category. In general, we find a tendency to longer hours among part-time workers. This tendency is most pronounced in the Atlantic provinces and in industries that employ large numbers of part-time workers. In seasonal industries, the share of 15-40 hour jobs has declined, while the share of 40 plus hour jobs has increased.

These findings have several implications: (1) these adjustments to working schedules allow workers to mitigate some of the loss in benefit income that they would otherwise have experienced; (2) removing the distinction between weeks of work involving more or fewer than fifteen hours has eliminated the practice of splitting jobs into short workweeks to avoid the UI payroll tax; (3) the move towards very long weekly hours in seasonal industries may reflect the elimination of the practice of splitting jobs into short workweeks to qualify a larger number of individuals for UI benefits; and (4) the reduction in the proportion of part-time jobs in unstable sectors may reflect a response to a new distortion that arises because, under the new hours-base system, a week of part-time work is not insured as fully as a week of full-time work.