Economic uncertainty, including the potential for new U.S. tariffs, is prompting businesses to review their workforce strategies and benefits policies to remain resilient.
While employers have no control if or when their products may be subject to tariffs, there are steps that can be taken to be more prepared.
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Tariffs could be devastating to the Canadian economy and it will take time for businesses to pivot and adapt to a tariff situation, which could result in temporary layoffs or permanent terminations for employees. In times like these, employers may have an obligation or desire to continue or extend benefits to inactive employees for a period of time.
Employers should have an internal human resources policy related to extensions of benefits for inactive employees, as this situation isn’t typically detailed in insurer contracts and booklets. However, all insurers have administrative guidelines related to which benefits can be extended and for how long. There are also Employment Standard Act requirements in some provinces that employers need to adhere to during a temporary work stoppage or employment severance.
Before employers offer employees an extension of benefits, they should first ensure that it meets any minimum provincial ESA requirements and secondly, confirm their insurer is willing to insure this risk. Employers should also have a plan to deal with employees who may fall below the minimum number of hours of work required to be eligible for benefits.
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While the immediate focus should be to prepare for the impact of tariffs, employers should also have a policy that includes an extension of benefits policy that covers other events such as, but not limited to, legislated leaves of absence — including adoption, compassionate care, jury duty and maternity/parental leave — and non-legislated leaves such as personal leaves and sabbaticals.
Most employers with employees in more than one province develop HR policies that are the same or comparable for employees in all provinces for equality and ease of administration, adhering to the most generous provincial legislation in the provinces in which they operate. However, employers often have separate but similar policies for Quebec employees, since much of Quebec’s legislation tends to be more generous than the other provinces and territories.
Employers needing assistance developing these benefits related HR policies, and understanding the web of legislation and insurer guidelines should seek help from an experienced benefits advisor.
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