Canada Emergency Wage Subsidy (CEWS) is an initiative by Government of Canada under Canada’s Covid-19 Economic Relief Plan to provide Financial Assistance to the struggling businesses during the crisis.
Under CEWS eligible employers get 75% wage subsidy for up to 5 months, w.e.f March 15, 2020 to prevent job losses and boost rehiring of workers.
To claim Wage Subsidy under the CEWS, an employer must satisfy the criteria given below:
Eligible Business would include:
- Corporations (not tax-exempt)
- Registered Charities, Certain non-profit and tax-exempt organizations (not public institutions)
Employer should be able to prove that its qualifying revenue for the reference period was equal to or 70% less for corresponding prior the reference period.
Amount of Subsidy:
Under CEWS, Businesses get a wage subsidy for a given employee of up to $847 per week, w.e.f. March 15, 2020, for eligible remuneration paid for the period between March 15, 2020 and June 6, 2020. The said amount of subsidy can even be claimed against newly hired employees).
The eligible periods for Businesses to qualify for the CEWS claim is March 15 to Aug 29, 2020. But employers would not be eligible to claim the CEWS for remuneration paid to an employee in a week that falls within a 4-week period for which the employee is eligible for the Canadian Emergency Response Benefit (CERB).
Eligibility for the CEWS of a Canadian Employee’s remuneration is available to employees other than those who have been without remuneration for 14 or more consecutive days in the eligibility period.
In order to keep a check and maintain the integrity of the program certain compliances are in place to ensure that it genuinely helps Canadians keep their jobs and subsidy reaches the right hand.
- The Employer would be penalized to repay the amount paid under CEWS in case of fraudulent claims ie. if subsidy is inappropriately obtained. Penalties and even imprisonment may apply.
- In addition, anti-abuse rules will make sure that employees are paid the amount they owe.
- If an employer is found engaging in artificial transactions to reduce revenue to become eligible for CEWS can be fined equal to 25% of the subsidy and would be made to repay the full subsidy that was improperly claimed.