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Federal government increases paid sickness benefits

December 2, 2022

Some of the most vulnerable workers in Canada are those who cannot work due to sickness. While most employees recover relatively quickly from their illnesses, others suffer from long-lasting issues which prevent them from working for lengthy periods of time.

Employees who are away from work for extended periods of time often do not have employer-paid benefits that will provide them with income during the early phases of their absence. Some employers offer long term disability benefits, but those often do not come into effect for between 90 and 180 days after the employee stops working.

To address this gap, the government established Employment Insurance (EI) sickness benefits. Before recently introduced changes, those benefits lasted for 15 weeks and would cover the waiting period for short term disability benefits. They did not address any gap before long term disability benefits became available or any later period if employees did not have LTD coverage.

On November 25, 2022, the federal government announced that it would be permanently extending EI sickness benefits to 26 weeks as of December 18, 2022. This extension will cover the waiting period for most LTD policies and provide up to 6 months of coverage for sick employees with no other income replacement benefits.

Employees who are approved for these benefits will be paid 55% of their average weekly insurable earnings to a maximum of $638 per week.

In addition to the EI changes which apply to all employees, the federal government has also announced new sick leave provisions that apply to federally regulated employees in the private sector. For these employees, the government will be extending the maximum length of unpaid medical leave to 27 weeks (from 17 weeks) under the Canada Labour Code (CLC). Federally regulated private-sector employees can also accumulate up to 10 days of paid sick leave each year under the CLC.

These changes will certainly be welcomed by sick employees. But the EI changes might also relieve pressure on employers to help bridge their sick employees to LTD benefits by offering government funding for that period.

If you have any questions about how the changes may affect your business, please reach out to one of the lawyers at our office.