The federal government has introduced the Canada Emergency Wage Subsidy (“CEWS”). Eligible employers may receive a subsidy of up to 75% of their employees’ wages for up to twelve (12) weeks. The CEWS was implemented to enable employers to keep their employees on the payroll while contributing to a smoother transition to post-COVID-19 operations.
There are a number of requirements that must be met in order to be eligible for CEWS including demonstrating a sufficient loss of revenue. Employers must be able to demonstrate that each employee is entitled to the subsidy and that they meet CRA payroll requirements.
Eligible employers must specifically demonstrate that they have met the requirements of an “eligible revenue reduction”, which can be calculated by comparing the eligible revenue (i.e. reduced revenue) with their baseline revenue. The federal government has outlined that your baseline revenue is:
- The revenue earned in the corresponding month in 2019; or
- The average of the revenue earned in January and February 2020.
Specifically, employers will need to demonstrate a decrease in revenue of 30% or more for July 2020 and August 2020.
If you are an employer and you are looking to determine avenues to consider prior to layoffs or terminations, or if you have any other employment-related questions amidst the COVID era, please contact Toronto employment lawyers, Sultan Lawyers at 416-214-5111 or via email at firstname.lastname@example.org.