Work-Sharing Employee Information Kit

Printable version in PDF Format

Work-Sharing is an Adjustment Program

• Employers retain staff and adjust their work activity during temporary, unexpected and unavoidable work shortages.
• Employees retain their skills and jobs and are paid Employment Insurance benefits for the days they do not work each week.
• Work-Sharing is not intended to support declining establishments or to retain seasonal workers during the slow season.
• Return to normal working hours must be a realistic expectation before the end of the agreement and there must be a strong recovery plan to bring in more work over the period of the agreement.
• The Work-Sharing Program will not be approved repeatedly thus a viable recovery plan must be in place.

Please read all the information provided including the eligibility criteria and discuss it with your employees. Work-Sharing is a three-party agreement between employers, employees and Human Resources Development Canada. All Employees of the Work-Sharing Unit Must Agree to Participate.

To apply for Work Sharing you must provide :

1. A completed application form (including attachments and signatures of both employer representative and employee representative (s).)
2. A recovery plan consisting of:
   • a detailed explanation of steps planned to increase business or alleviate work shortage (example: new types of business, acquiring new technology, exploring new markets, taking on new lines of business, etc.) and, a description of what you are planning to do in order to increase the hours worked by employees;
   • include realistic time frames to measure the activities as outlined in the Recovery plan;
   • a detailed history of the business;
   • a description of the market served (who are your customers / what area do you cover?);
   • a comparison of sales/business from last 2 years and this year (see example attached);
   • future sales / business projections;
   • the reason for work shortage (Is it seasonal?);
   • any work force adjustments to be made during or after that period of time for which you require the use of a Work-Sharing Agreement (i.e. layoffs, reducing hours to part time from full time); and
   • all information with respect to applications will be kept confidential.

All of the above-mentioned information must be submitted in order to constitute a complete application.

Incomplete applications cannot be processed

The more detailed information that you provide, the easier it is to analyse your application and to make a decision. Complete information also avoids delays in processing.

A formal application for Work-Sharing must be received by the Human Resource Centre at least 30 days in advance of the proposed effective date of the agreement.

Eligibility Criteria for Work-Sharing

Employer Criteria

• the employer must have been in business for two years;
• the employer must show that the need to reduce working hours is unavoidable;
• the Work-Sharing Unit must consist of 2 or more people. The program is intended to cover "core staff" only;
• the employer must show that the hours usually worked are regular and stable;
• Work Sharing applications can not be put in place in instances where there is a labour dispute;
• outside sales staff, managers and those who assign workloads are generally not eligible for inclusion in the Work-Sharing Unit;
• the employers must show that the work shortage is temporary and unexpected. (This is because the program is not intended to subsidize declining establishments, nor to cover companies during an expected seasonal slowdown.);
• the shortage of work must be significant enough to warrant support of the program. The initial reduction in working time must be at least 20 % or one day;
• the maximum permissible reduction in the working time is 60 % or 3 days;
• the minimum duration of a Work-Sharing Agreement is 6 weeks and the maximum period for Work-Sharing is 26 weeks and is based on the length of time it takes for your recovery plan to generate enough new work to get your firm back to normal. Extensions beyond the maximum of 26 weeks may be considered in extenuating circumstances for up to a maximum of 12 weeks. A letter of request for these extensions with a revised recovery plan must be signed by the employer and the employee representative and received at least one month prior to the termination of the normal 26 week Work Sharing Agreement;
• establishments are not allowed to increase their work force during a Work-Sharing Agreement, except for replacements of essential separating staff. This requires prior consent of the Commission;
• in order to minimize dependency on the Work-Sharing program, all second and subsequent applications will be critically reviewed. If it is determined that the work shortage has become permanent or seasonal in nature, the application may not be approved. It is unlikely that applications requesting a third successive time on the program will be approved.

Employee Conditions

• the entrance requirement for Work-Sharing is the same as for regular Employment Insurance Benefits. Employees must have 420 - 910 hours of insurable employment before the effective date of the agreement. The exact number of required hours depends on the unemployment rate in the EI economic region;
• the Work-Sharing benefit payable in any week is based on employees' loss in normal average weekly earnings. The benefit is also based on the regular weekly employment insurance benefit, as calculated at the start of the Work-Sharing Agreement. During the Work-Sharing Agreement, as work becomes available, the employer may request an employee to work on a Work-Sharing day and the employee is required to report to work;
• earnings received in any week by a Work-Sharing claimant from sources other than Work-Sharing Employment, in excess of an amount equal to 25% of the claimant's rate of weekly benefit, shall be deducted from the Work-Sharing benefits payable in that week;
• specific statutory holidays occurring within a Work-Sharing period are not compensated by Employment Insurance benefits and are the responsibility of the employer;
• only employees with regular working hours are eligible. Employees whose hours of work usually fluctuate from week to week are not eligible. The program is intended to cover those core employees who normally have work during the period of the Work-Sharing Agreement. (i.e. seasonal workers who would normally be let go during this period cannot be covered)

Waiting Period

Participants do not have to serve a two week waiting period for Work-Sharing Benefits. Benefits are processed through the EI payment system, meaning it will take up to 28 days for the first cheques to arrive.

It is extremely important that you advise your employees of the time delay.

Employee Lay Offs:
If the business does not recover as expected and an employee is laid off during or at the end of a Work-Sharing agreement, the employee can apply to transfer the claim to regular benefits. That claim duration would be extended by the number of weeks of Work-Sharing. The benefit rate and the normal duration of the claim is not reduced by Work-Sharing.

If you have questions regarding the Work-Sharing Program or the application, please call:

Human Resources and Skills Development Canada

ABC Company was formed in 1974. The company manufactures and distributes steel grommets, snaps and custom steel products used in commercial applications. The company changed owners in 1978 and was re-tooled with the introduction of CNC machines. The majority of our orders have historically come from the building trades in rural Saskatchewan, automotive supply shops in Calgary and southern Alberta and the US Military Supply Depot in Fort Worth, Texas. From 1980 until 1991 the company had a standing contract with a major US auto manufacturer to produce specialized fittings for automobile frames for a large automobile manufacturer.

Sales and orders of our products have dropped off considerably during the last year due in part to the large inventory of new automobiles and the lack of sales, as well as the US Military downsizing. The demand for products by the building industry has also had a dramatic effect on our production. Our sales and production figures for the last two years and this year are as follows:

We are projecting slightly higher sales and orders for the 2000 season based on an intense marketing scheme and diversification into other products. The company is attempting to obtain patent rights on two new products that we hope will be produced in early 2000 and distributed later that year. Our sales staff is working overtime in order to solidify some major contracts from the US Military and a 007 Mining in Northern Saskatchewan. We have started an active marketing campaign in the US. Ads have been placed in the New York Times, the LA Herald and the Chicago Times. These will run for one week starting Jan 10, 2000. The company will have a booth set up at the Seattle Trade Show on Feb. 8, 2000 and the Houston Trade Fair on March 16, 2000. This is something new that we have not done in the past.

The work shortage has resulted due to the lack of sales and the high inventory that we now stock. Some of our major customers have reduced their orders considerably and it is more difficult than we imagined obtaining new customers. At the present there are no commitments to place any substantial orders, but indications are that they should be coming within the next 4 months. Some major orders are now on hold and we expect them shortly.

Our work force of 120 has at this time been reduced to 95, of whom we have full time work for 45. The other 50 workers must have their work week reduced in order to maintain a core complement of workers and avoid layoffs of any of our technicians. There are no plans to layoff any workers unless Work-Sharing is not possible. We are sure that we will be returning to full employment of at least 100 workers in approx. three months time. Historically we have not had to lay anyone off. We will be taking a serious look at our work force to see if any training and upgrading is necessary in order to maintain and improve the skills of our workers. This will hopefully make us more competitive and flexible.

Please call me should you require more information.

Sincerely,

Bob Johnson
General Manager

Back to - Program Description