A longtime rural resident, I use my 60 plus years of life learning to opinionate here and elsewhere on the “interweb” on everything from politics to environmental issues. A believer in reasonable discourse rather than unhelpful attacks I try to give positive input to the blogesphere, so feel free to comment upon rural issues or anything else posted here. But don’t be surprised if you comments get zapped if you are not polite in your replys.

Thursday, March 5, 2009

EI – The part time rip off.

Oh Boy, this has been a learning experience. As I said in my previous blog our laid off worker finally received some payments last week, great, BUT…..
In the mail today we were notified about our payments, which were of course a percentage of the normal bi-weekly salary received over the “qualifying Period”. Fine no problem, however at the bottom of the letter was the bit “you are elegable for payment for a MAXIMUM of 22 weeks. HELLO, don’t most folks get around 40 to 45 weeks?

So off I go to see what the H is going on, and sure enough there is a table giving the criteria for the number of week one may collect for. Several factors affect this (including the unemployment rate for your area at the time your clam started) but the major one is the number of hours one has worked in that period, at first glance this seems ok, but consider this……

Someone who has worked, and paid into the EI system, for many years without collecting but over the “qualifying period” has worked “part time” (by their own choice of because the employer dictated it) not only receives a percentage of that lower weekly salary but also receives a lesser number of weeks EI payments. This despite perhaps having paid in far more than say a seasonal worker, who because he worked full time but for part of the year, will get the full compliment of weeks paid.

As a example let us take two workers making the same amount each week over the “qualifying period” Both have paid in for years and the unemploymet rate in their area is 10%.
Worker #1 works say 500 hours in that period and will get around 22 weeks of EI
Worker #2 works 1000 hours over the same period and will get around 28 weeks of EI
Since worker #1 is getting paid twice as much per hour as worker #2 he will get twice as much pogey, seems fair, right?

Now the thing is if however they are both paid the same hourly rate worker #1 not only receives 50% less pogey, which is fine in that they were making 50% less a week but ALSO receives a fewer number of weeks of EI. That’s a double hit for part time workers and seems eminently unfair to me.

EDIT - That’s a little confusing, lets take a specific example –

Worker #1 full time for the last year, 40hr work week
$10 x 40 hours a week x 52 weeks = 2080 hours annually = $20,800 year
$400 week x 60% = $240 EI x 44 weeks (from chart - 45 max)
$240 x 44 weeks / $20,800 = 50.8% of annual salary maximum benefits

Worker #2 part time for the last year, 20hr work week
$10 x 20 hours a week x 52 weeks = 1040 hours annually = $10,400 year
$200 week x 60% = $120 EI x 26 weeks (at 10% unemployment rate
$120 x 26 weeks / $10,400 = 30% of annual salary maximum benefits

The part time worker already struggling on a lower annual salary receives 20% less EI by comparison taking annual salary into account!

Bottom line don’t get laid off after being asked to work reduced hours because you are going to get screwed big time. Even those making over the maximum dollar amount eligible (lord know we have never reached those giddying heights) will be penalized if they have not worked the maximum number of hours available during that qualifying period in order to earn it. Next lesson, if you can hang on long enough whilst the unemployment rate skyrockets you will be better of in the long run.

Yep after waiting 18 weeks for our payment now we learn that by late spring we are SOL! Nice.


Laura said...

Senator Elaine McCoy was on CBC radio (Ottawa Morning) today talking about starting a website for Canadians to have their say about how the economic situation and resulting $40 billion stimulus package is affecting Canadians.

There's nothing about it yet on her site yet - www.albertasenator.ca (which is all in flash so you probably can't even view it) but she invited Canadians to call her office and tell her what they think at 1 800 267 7362.

Hope you're doing well,

Scott in Montreal said...

You know, if that's the way they're going to run EI, we should be given the opportunity to opt out and set up a fund privately (sort of like the Quebec drug insurance policy, which is mandatory). I wouldn't suggest this if not for the fact the government has been using surpluses from EI to help out the balance sheet. While I agree on the need for built-in incentives to promote actively finding gainful employment, you're right to point out how some of these rules are simply unfair.