The Wage Earner Protection Program Act is a crucial piece of legislation designed to protect employees and their families when their employer goes bankrupt.
The Act provides a range of benefits to eligible employees, including priority payment of certain debts.
One of the key benefits of the Act is that it ensures employees receive a portion of their unpaid wages, vacation pay, and severance pay.
This can provide a much-needed financial safety net for employees and their families during a difficult time.
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What Is The Wage Earner Protection Program Act
The Wage Earner Protection Program Act (WEPPA) is a Canadian federal legislation that aims to provide protection for employees whose employers have gone bankrupt or been placed into receivership. It was enacted in 2005.
The WEPPA is designed to ensure that employees receive fair compensation for their wages, regardless of their employer's financial situation. This is achieved through the Wage Earner Protection Program (WEPP), which is administered by Employment and Social Development Canada.
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To be eligible for the WEPP, employees must have earned wages during a specified eligibility period, which starts six months before a restructuring event and ends on the date of bankruptcy or receivership. The maximum amount that an eligible individual may receive is equal to four weeks of insurable Employment Insurance (EI) earnings, which was $3,807.68 in 2016.
Employees who were officers, directors, or had a controlling interest in the business of the former employer are not eligible for the WEPP. Additionally, managers whose responsibilities included making binding financial decisions or making decisions on wage payments are also not eligible.
Here is a summary of the eligible wages:
- Salaries, commissions, compensation for services rendered, vacation pay, gratuities accounted for by the employer, disbursements of a travelling salesperson properly incurred in and about the business of the former employer, production bonuses, and shift premiums earned during the eligibility period.
- Severance pay and termination pay for employment that ended in the eligibility period.
The WEPP is subrogated to any claims for wages an employee may have against the bankrupt or insolvent employer, as well as the employer's directors, to the extent of the payments made.
Eligibility and Appeal
To be eligible for the Wage Earner Protection Program, you must have unpaid wages and benefits, and your employment must have ended due to your former employer's bankruptcy or receivership.
You are not eligible if you were an officer or a director of your former employer, or if you had a controlling interest in the business.
Eligible employees are those who earned eligible wages during a specified eligibility period, which starts six months before a restructuring event and ends on the date of bankruptcy or receivership.
Eligible wages include salaries, commissions, compensation for services rendered, vacation pay, termination pay, severance pay, and any other amounts prescribed by regulation.
To be eligible, you must not have been an officer or director of your former employer, or had a controlling interest in the business.
You can appeal the Minister's review decision if you are not satisfied with the outcome, but only on a question of law or jurisdiction.
You can appeal the Minister's review decision in writing, providing the last three digits of your Social Insurance Number, your current contact information, and detailed grounds for the appeal.
If you are not dealing at arm's length with any of the persons mentioned above, you may not be eligible for the Wage Earner Protection Program.
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The maximum amount that an eligible individual may receive is equal to four weeks of insurable Employment Insurance (EI) earnings, which is currently $3,807.68.
Here is a summary of the eligibility criteria:
- You must have unpaid wages and benefits
- Your employment must have ended due to your former employer's bankruptcy or receivership
- You must not have been an officer or director of your former employer
- You must not have had a controlling interest in the business
- You must not have been a manager with binding financial decision-making authority
- You must not have been dealing at arm's length with any of the persons mentioned above
The Wage Earner Protection Program is administered by Employment and Social Development Canada, and payouts are made to eligible employees who earned eligible wages during the specified eligibility period.
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Program Establishment and Review
The Wage Earner Protection Program was established to provide payments to individuals in respect of wages owed to them by employers who are insolvent. The program was first introduced in 2005.
The program has undergone several changes since its inception. In 2007, the Act was amended to make further changes. In 2009, more amendments were made. Most recently, the Act was amended again in 2018.
If an applicant disagrees with Service Canada's decision regarding their eligibility under the WEPP, they may request the Minister to conduct a review of Service Canada's decision. The request for review must be made in writing within 30 days after the day the applicant is informed of the eligibility decision by Service Canada.
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A request for review under the WEPP must be filed with Service Canada, not with the CIRB. For further information about filing a request for review under the WEPP, visit Service Canada's Official website or call 1-866-683-6516 (TTY: 1-800-926-9105).
Here are the key dates related to the establishment of the Wage Earner Protection Program:
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