Supplementary Unemployment Benefit Plan (SUB Plan)

See these other posts for more COVID-19 Employment Law information:
»» Webinar & Slide presentation: COVID-19 Ontario Workplace Issues: March 16
»» Temporary Layoffs: March 17
»» EI Sickness Benefits and Work Sharing: March 17
»» New Emergency Care Benefits and Supports: March 18
»» Amendment to Ontario Employment Standards: March 21
»» Mobilizing Canadian Industry to Fight COVID-19: March 23
»» List of Ontario essential workplaces: March 24
»» COVID-19 Emergency Response Act March 26
»» Canada Emergency Wage Subsidy March 30

You may be struggling with the need to balance your company’s new and unforeseen business and financial pressures with your desire to provide your employees with the best options for their personal needs.

In the case of Temporary Layoffs, many employers have begun to consider using Supplementary Unemployment Benefit Plans (SUB Plans) to provide financial assistance to their employees during the layoff period. More information is available from the Government of Canada website.

The Employment Standards Act, 2000 provides for temporary lay-off of up to 13 weeks in any 20 week period, and up to 35 weeks in any 52 week period if:

  • the employee continues to receive substantial payments form the employer;
  • the employer continues to make payments for the benefit of the employee under a legitimate retirement or pension plan or a legitimate group or employee insurance plan; or
  • the employee receives supplementary unemployment benefits.
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The benefit of using a SUB Plan (as opposed to continuing to make substantial payments to the employee in the ordinary course) is that the payments from a registered SUB Plan are not deducted from the employee’s EI benefits. Payments under a registered SUB plan are not considered as insurable earnings – therefore EI premiums are not deducted. There is no minimum or maximum duration for which payments under a SUB Plan can be made.

A SUB Plan can be established by an employer or group of participating employers. The SUB Plan must be registered with Service Canada, and once this is done the SUB Plan allows the employer to top up an employees’ employment insurance (EI) benefits during a period of unemployment due to a temporary or indefinite layoff. The amount of the top up can be up to 95% of the employee’s weekly wages/salary, less the amount of the employee’s corresponding EI benefits.

If you are interested in how a SUB Plan could be instituted in your situation, I suggest that you contact me to review details before registration with Service Canada.

I remind and encourage you to observe the recommendations outlined by our public health authorities and hope that you, your employees, families and loved ones stay safe and healthy.



You may also find these online resources helpful in keeping up to date with the COVID-19 situations in Toronto, Ontario and Canada: