Employment Insurance (EI), provides income replacement to Canadians who are not working due to job loss, sickness, parental leave or compassion care.
The program is financed by employer and employee contributions deducted at source and overseen by the Federal government. Plan parameters are reviewed annually.
What is Changing
Employment Insurance benefits represent 55% of employees’ weekly earnings.
Effective January 1, 2021:
- the maximum annual insurable earnings will increase from $54,200 to $56,300
- the maximum weekly benefit amount will therefore increase from to $573 to $595
For a detailed history of EI insurable earnings by year, please refer to the Canada Revenue Agency (CRA)’s website.
Impact to Employers
Employers that offer an insured short-term disability (STD) or salary continuation plan must ensure their disability benefit is at least as generous at the EI sickness benefit. If not, employers risk no longer being eligible for the EI premium reduction program. If in doubt, contact one of our benefits advisors to verify compliance of your disability program.