Canadian Payroll Reporter - sample

2 Canadian HR Reporter, a Thomson Reuters business 2018 News April 2018 | CPR Since Dec. 3, parents have been able to choose between the standard EI benefits and an ex- tended option that provides pa- rental benefits for up to 61 weeks over 18 months, at a rate of 33 per cent of insurable earnings, to a maximum amount. The new benefit would pro- vide up to eight extra weeks of benefits for parents choosing the extended option if they agree to share parental leave. This would give the parents a maximum of 69 weeks, which they could share in any way, provided that one parent took no more than 61 weeks and the second parent took at least eight weeks of the 69. The purpose of the new ben- efit is to encourage more fathers to take parental leave. The bud- get said a similar benefit in Que- bec has led to fathers there tak- ing more time off than elsewhere in Canada. It cites 2016 data from Statistics Canada showing that 80 per cent of new fathers in Quebec claimed or planned to claim parental benefits, com- pared to only 12 per cent in the rest of the country. Quebec provides five weeks of paternity benefits under its parental insur- ance plan, as well as paternity leave under labour standards. The federal government calls its proposed leave "use it or lose it" because if parents do not share the leave, the parent who takes it would only be entitled to 35 or 61 weeks of benefits, depending on the benefit option selected. The new benefit could have implications for employers who top-up EI parental benefits. It could also affect leaves allowed under labour standards. The budget proposes to amend the Canada Labour Code (CLC) to include job protections for em- ployees taking additional paren- tal leave. While the CLC only applies to federally regulated workplaces, the new EI benefit may prompt other jurisdictions to make simi- lar changes to their labour stan- dards laws. Another budget proposal may also affect employers with top- up plans or supplementary un- employment benefit plans. The government is planning to make its EI Working While on Claim Pilot Project permanent. The project, which was set to expire in August, allows eligible EI claimants receiving regular, fishing, parental, compassion- ate care, or caregiving benefits to keep 50 cents of the benefits for every dollar they earn, up to a maximum of 90 per cent of av- erage weekly insurable earnings. The changes would also in- clude a grandfathering provi- sion for EI claimants who have chosen to receive benefits under an older pilot project that allows them to earn $75 a week or 40 per cent of their weekly EI ben- efits, whichever is higher, with- out reducing the benefits. They would be able to continue under the older pilot for up to three years, until August 2021. The government also plans to expand the Working While on Claim project to include EI ma- ternity and sickness benefits. The budget also included fund- ing of $90 million over three years to improve the way the govern- ment delivers EI services, includ- ing claims processing. In addi- tion, the government committed $127.7 million over three years to upgrade its EI call centres. While there were no specific announcements about changes to the way employers report in- surable earnings on a Record of Employment (ROE), budget documents did reiterate that Employment and Social Devel- opment Canada is working with stakeholders to come up with ways to streamline employer re- porting requirements. Budget documents stated that the federal government plans to make legislative amendments af- fecting the delivery of EI services, including e-services, although they did not specify whether this would include eliminating the ROE. The budget included many income tax proposals, but the focus was on personal and busi- ness taxation rather than pay- roll-related issues such as tax- able benefits. It did state, though, that the government is considering leg- islative changes affecting em- ployee repayments of employer overpayments. The budget noted that the fed- eral government plans to review income tax legislation and con- sult with stakeholders on the fea- sibility of changing the rules for employees who repay amounts in a later year when their employer overpays them due to a clerical or an administrative error. Under the current tax rules, employees who are inadvertent- ly overpaid may repay the em- ployer the net amount (i.e., gross amount minus source deduc- tions) if they make the payment in the same year they received the overpayment. Employees who repay an overpayment from a previous year must pay back the gross amount to their em- ployer and recover excess source deduction withholdings from the Canada Revenue Agency (CRA). The government is consider- ing changing the rules so that employees who repay an over- payment in a different year than the one in which they re- ceived it only have to repay the net amount. Budget documents stated that legislative changes would apply for 2018 and later tax years, although they did not say when the government would table legislation. The impetus for the change stems from problems the gov- ernment has had with its Phoe- nix pay system. Since it began implementing Phoenix in 2016, thousands of federal civil ser- vants have been overpaid, un- derpaid, or not paid at all. In the budget, the government announced that it plans to begin working on finding a replace- ment for Phoenix "that is bet- ter aligned with the complexity of the federal government pay structure." Beginning in the 2018-19 fis- cal year, the government pro- poses to spend $16 million over two years to work with experts, technology providers, and fed- eral public-sector unions to start developing a new payroll system. In the meantime, it proposes to invest $431.4 million over six years to make Phoenix work better. The money would go to- wards initiatives such as hiring more payroll staff at the central- ized pay centre in Miramichi, N.B., and at satellite pay offices, as well as within government departments to help employees deal with issues as they arise. The government also plans to give the CRA $5.5 million over two years to help it process tax reassessments for federal work- ers and handle related phone calls stemming from Phoenix problems. The budget also included oth- er proposals that may be of inter- est to payroll, including: • amending the CLC to provide five days of paid leave for federally regulated workers who are victims of domestic violence or whose children are victims • reviewing the way the CRA provides services to ensure that it is treating Canadians as "valued clients, not just taxpayers," as well as making investments to improve the CRA's telephone and digital services, and to enhance se- curity measures to protect taxpayer information • tabling "proactive" pay equity legislation for federally regu- lated workplaces with at least 10 employees • increasing the maximum pay- ment under the Wage Earner Protection Program from four weeks of EI insurable earnings to seven weeks and making eligibility for the program more equitable to help more workers owed wages, vacation pay, severance pay, or termina- tion pay when their employer files for bankruptcy or goes into receivership • amending the federal Income Tax Act to provide a deduction for employee contributions to a new, enhanced portion of the Quebec Pension Plan, as of 2019. The amendment would be similar to one already made for the CPP in advance of CPP enhancements being phased- in between 2019 and 2025. Feds to move away from faulty Phoenix system from BUDGET on page 1 The budget included funding of $90 million over three years to improve delivery of EI services.

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