Vol. 146, No. 26 — December 19, 2012

Registration

SOR/2012-261 November 30, 2012

EMPLOYMENT INSURANCE ACT

Regulations Amending the Employment Insurance Regulations

P.C. 2012-1611 November 29, 2012

RESOLUTION

The Canada Employment Insurance Commission, pursuant to paragraphs 54(k.1) (see footnote a) and (k.2) (see footnote b) of the Employment Insurance Act (see footnote c), makes the annexed Regulations Amending the Employment Insurance Regulations.

October 18, 2012

IAN SHUGART
Chairperson
Canada Employment Insurance Commission

MARY-LOU DONNELLY
Commissioner (Workers)
Canada Employment Insurance Commission

JUDITH ANDREW
Commissioner (Employers)
Canada Employment Insurance Commission

His Excellency the Governor General in Council, on the recommendation of the Minister of Human Resources and Skills Development, pursuant to paragraphs 54(k.1) (see footnote d) and (k.2) (see footnote e) of the Employment Insurance Act (see footnote f), approves the annexed Regulations Amending the Employment Insurance Regulations, made by the Canada Employment Insurance Commission.

REGULATIONS AMENDING THE EMPLOYMENT INSURANCE REGULATIONS

AMENDMENT

1. The Employment Insurance Regulations (see footnote 1) are amended by adding the following after section 9:

SEARCH FOR SUITABLE EMPLOYMENT

REASONABLE AND CUSTOMARY EFFORTS

9.001 For the purposes of subsection 50(8) of the Act, the criteria for determining whether the efforts that the claimant is making to obtain suitable employment constitute reasonable and customary efforts are the following:

• (a) the claimant’s efforts are sustained;
  
  
• (b) the claimant’s efforts consist of
  • (i) assessing employment opportunities,
    
    
  • (ii) preparing a resumé or cover letter,
    
    
  • (iii) registering for job search tools or with electronic job banks or employment agencies,
    
    
  • (iv) attending job search workshops or job fairs,
    
    
  • (v) networking,
    
    
  • (vi) contacting prospective employers,
    
    
  • (vii) submitting job applications,
    
    
  • (viii) attending interviews, and
    
    
  • (ix) undergoing evaluations of competencies; and
• (c) the claimant’s efforts are directed toward obtaining suitable employment.

SUITABLE EMPLOYMENT

9.002 For the purposes of paragraphs 18(a) and 27(1)(a) to (c) and subsection 50(8) of the Act, the criteria for determining what constitutes suitable employment are the following:

• (a) the claimant’s health and physical capabilities allow them to commute to the place of work and to perform the work;
  
  
• (b) the hours of work are not incompatible with the claimant’s family obligations or religious beliefs;
  
  
• (c) the nature of the work is not contrary to the claimant’s moral convictions or religious beliefs;
  
  
• (d) the daily commuting time to or from the place of work is not greater than one hour or, if it is greater than one hour, it does not exceed the claimant’s daily commuting time to or from their place of work during the qualifying period or is not uncommon given the place where the claimant resides, and commuting time is assessed by reference to the modes of commute commonly used in the place where the claimant resides;
  
  
• (e) the employment is of a type referred to in section 9.003; and
  
  
• (f) the offered earnings correspond to the scale set out in section 9.004 and the claimant, by accepting the employment, will not be put in a less favourable financial situation than the less favourable of
  • (i) the financial situation that the claimant is in while receiving benefits, and
    
    
  • (ii) that which the claimant was in during their qualifying period.

9.003 (1) A type of employment is

• (a) in respect of a claimant who was paid less than 36 weeks of regular benefits in the 260 weeks before the beginning of their benefit period and who, according to their income tax returns for which notices of assessment have been sent by the Canada Revenue Agency, paid at least 30% of the maximum annual employee’s premium in 7 of the 10 years before the beginning of their benefit period or, if their income tax return for the year before the beginning of their benefit period has not yet been filed or a notice of assessment for that year has not yet been sent by that Agency, in 7 of the 10 years before that year,
  • (i) during the first 18 weeks of the benefit period, the same occupation, and
    
    
  • (ii) after the 18th week of the benefit period, a similar occupation;
• (b) in respect of a claimant who was paid more than 60 weeks of regular benefits in at least three benefit periods in the 260 weeks before the beginning of their benefit period,
  • (i) during the first six weeks of the benefit period, a similar occupation, and
    
    
  • (ii) after the sixth week of the benefit period, any occupation in which the claimant is qualified to work; and
• (c) in respect of a claimant to whom neither paragraph (a) nor (b) applies,
  • (i) during the first six weeks of the benefit period, the same occupation,
    
    
  • (ii) after the sixth week and until the 18th week of the benefit period, a similar occupation, and
    
    
  • (iii) after the 18th week of the benefit period, any occupation in which the claimant is qualified to work.

(2) For the purposes of this section,

• (a) “same occupation” means any occupation in which the claimant worked during their qualifying period;
  
  
• (b) “similar occupation” means any occupation in which the claimant is qualified to work and which entails duties that are comparable to the ones that the claimant had during their qualifying period; and
  
  
• (c) “occupation in which the claimant is qualified to work” includes an occupation in which the claimant could become qualified to work through on-the-job training.

(3) In the counting of weeks referred to in subsection (1) and section 9.004, account shall be taken only of the waiting period, of any week in respect of which regular benefits are paid to the claimant and of any week of disqualification referred to in subsection 28(1) of the Act.

9.004 Offered earnings — evaluated by reference to earnings from the employment in which the claimant worked for the greatest number of hours during their qualifying period — are

• (a) in respect of a claimant to whom paragraph 9.003(1)(a) applies,
  • (i) during the first 18 weeks of the benefit period, earnings equal to 90% or more of the reference earnings, and
    
    
  • (ii) after the 18th week of the benefit period, earnings equal to 80% or more of the reference earnings;
• (b) in respect of a claimant to whom paragraph 9.003(1)(b) applies,
  • (i) during the first six weeks of the benefit period, earnings equal to 80% or more of the reference earnings, and
    
    
  • (ii) after the sixth week of the benefit period, earnings equal to 70% or more of the reference earnings; and
• (c) in respect of a claimant to whom paragraph 9.003(1)(c) applies,
  • (i) during the first six weeks of the benefit period, earnings equal to 90% or more of the reference earnings,
    
    
  • (ii) after the sixth week and until the 18th week of the benefit period, earnings equal to 80% or more of the reference earnings, and
    
    
  • (iii) after the 18th week of the benefit period, earnings equal to 70% or more of the reference earnings.

COMING INTO FORCE

2. These Regulations come into force on January 6, 2013.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Background

Canada faces ongoing skills and labour shortages in certain sectors, industries and regions. As a result, encouraging and supporting unemployed Canadians to get back to work more quickly will be critical to ensuring the country’s economic prosperity. Through the Economic Action Plan 2012 — Jobs, Growth and Long-term Prosperity, the Government of Canada announced a number of improvements to the EI program so that it remains fair, flexible and helps Canadians find work. The Connecting Canadians with Available Jobs (CCAJ) initiative is a set of measures to help unemployed workers find employment and return to work more quickly where there are suitable job opportunities available in their local labour market. The CCAJ measures include

• legislative and regulatory amendments to clarify claimant responsibilities with respect to undertaking a reasonable job search for suitable employment;
• enhancing labour market information, including online job postings to support job-search activities;
• better connecting the Temporary Foreign Worker Program and the EI program to help ensure Canadians are considered before temporary foreign workers; and
• working closely with interested provinces and territories to make employment supports available to EI claimants earlier in their claim.

Issue

While the Act outlined general responsibilities for regular claimants to conduct a reasonable job search and includes provisions stipulating that they have to be willing to accept suitable employment, it did not provide a clear and detailed articulation of their responsibilities while on EI. As a result, claimants had the flexibility to refuse work and restrict their job search to their usual occupation and wage rate, without fully considering a wider array of re-employment opportunities. Ambiguity pertaining to claimant responsibilities also limited the effectiveness of program compliance measures.

In order to clarify claimant responsibilities and address the limited effectiveness of program compliance measures, as part of the Jobs, Growth and Long-term Prosperity Act, the Act was amended to provide the Canada Employment Insurance Commission (the Commission) with the authority to establish regulations to clearly define what constitutes a reasonable job search for suitable employment. More specifically, the authorities allow the Commission to develop regulations prescribing (1) the categories of EI claimants based on clear criteria related to previous EI contributions and usage; (2) what constitutes suitable employment throughout a claim for EI benefits for various claimant categories; and (3) what constitutes reasonable and customary efforts to obtain suitable employment.

Amendments to the EI Regulations are needed to define what constitutes a reasonable job search for suitable employment in order to provide claimants with clear direction and to enhance the effectiveness of program compliance measures.

Objectives

The objectives of the amendments are to

• provide claimants with clarity and direction with respect to their responsibilities to seek and accept all suitable employment;
• better enable Service Canada staff to monitor claimants’ eligibility and ensure claimants are fulfilling their responsibilities; and
• support claimants to return to work faster.

Description

The amendments to the EI Regulations establish the criteria for determining what constitutes suitable employment, i.e.

• personal circumstances (e.g. health and physical capabilities);
• hours and nature of the work;
• the daily commuting time;
• the type of employment and earnings offered in comparison to previous earnings; and
• the claimant’s current and potential financial situation were the claimant to accept the employment offered.

The amended EI Regulations will be applied by Service Canada to inform EI claimants of their responsibilities, as well as to assess whether a claimant has fulfilled their responsibility to undertake a reasonable search for suitable employment. The EI Regulations include details for each criterion, which provides clarification in terms of the interpretation of the Regulations, as well as how claimant eligibility is assessed. Each claim for EI benefits is assessed based on the specific facts pertaining to that case, and Service Canada agents have discretion in reviewing each case.

The amended EI Regulations define suitable employment for three categories of claimants, based on prior employment and usage of the EI program. For each category of claimants, the definition of suitable employment involves a gradual expansion of what is to be considered suitable employment, with respect to the type of work and offered earnings. As duration on claim increases, claimants are required to expand their job search and reduce restrictions with regard to type of work and earnings. More specifically, claimants are required to expand the scope of their search from the “same” occupation to “similar” occupation to “any” occupation in which the claimant is qualified to work. (see footnote 2)

The three categories of claimants and related definitions of what constitutes suitable employment established by the amendments to the EI Regulations are

1. Claimants who have had sustained labour force attachment and have made limited use of the EI program: This group includes claimants who have paid at least 30% of the maximum annual employee’s premium for 7 out of the last 10 tax years and to whom fewer than 36 weeks of EI regular benefits were paid over the past 5 years. After 18 weeks on EI benefits and until the end of their claim, they are required to expand their search for suitable employment to similar occupations with earnings of no less than 80% of their previous earnings, but not lower than the prevailing minimum wage.
2. Claimants who have three or more regular claims and to whom over 60 weeks of regular benefits were paid in the past five years: This group will be required to expand their search for suitable employment to similar occupations at the onset of their EI claim (from the first to the sixth week of benefits) and accept earnings no less than 80% of previous earnings. From week seven of their claim, they are required to accept any occupation in which they are qualified to work (with on-the-job training, if required) with earnings of no less than 70% of their previous earnings during the qualifying period, but not lower than the prevailing minimum wage.
3. Claimants not captured by the other two categories: These claimants have minimal prior EI usage and may not have an extensive work history. They will be allowed to limit their job search efforts to their usual occupation and earnings (no less than 90% of previous earnings) for the first six weeks of their claim. At week seven, they are required to expand their search for suitable employment to similar occupations with earnings of no less than 80% of previous earnings. After 18 weeks, they are required to further expand their job search effort to include any occupation in which they are qualified to work (with on-the-job training, if required) with earnings of no less than 70% of their previous earnings, but not lower than the prevailing minimum wage.

The amended EI Regulations establish that previous earnings are based on usual earnings from their most prominent employment (if they held more than one job) which is determined by the employment with the greatest number of insured hours used to establish their EI claim.

The amended EI Regulations define reasonable and customary efforts to search for suitable employment as those that

• are sustained;
• include activities such as assessing employment opportunities, contacting prospective employers, submitting job applications, and attending interviews; and
• are focused on obtaining “suitable employment.”

Benefits and costs

The amended EI Regulations provide claimants with clarity and direction with respect to their responsibility to conduct a reasonable job search for suitable employment which, in turn, will help positively influence individual claimants’ decisions regarding job search efforts and willingness to accept available employment. It is expected that EI claimants will increase their job search efforts, which will result in their finding suitable employment and returning to work more quickly. The most significant impact is expected in regions where there are employment opportunities and employers have difficulty finding workers.

It is estimated that enhanced compliance measures to ensure claimants are fulfilling their responsibility to seek suitable employment will require an annual investment of approximately $7.2 million per year in administrative costs, which includes the cost of processing appeals. Enhanced compliance measures are expected to result in an estimated 8 000 additional claimants having their benefits discontinued until claimants demonstrate they are meeting their responsibilities, yielding program savings of approximately $12.5 million in EI benefits in 2012–2013, and $33 million in 2013–2014 and every year thereafter.

Rationale

The regulatory changes are consistent with the role of EI as a temporary income support program. By clarifying what is required in terms of undertaking a reasonable job search for suitable employment, the amended EI Regulations will enable claimants to understand and meet their responsibilities while on claim, and to transition back into the labour force more quickly. Service Canada is able to provide regular claimants with more precise information and direction with respect to their responsibility to undertake a reasonable job search for suitable employment. In addition, providing objective and measurable criteria in the definitions of suitable employment and reasonable job search enhances the effectiveness of compliance measures.

The amended EI Regulations will clarify responsibilities for all EI claimants, but will also take into account an individual’s prior usage of the EI program and the duration of their current EI claim. Claimants who have had sustained labour force attachment and have made limited use of the EI program are provided with significantly more time than the other categories of claimants to search for employment within their usual occupation in recognition that these claimants are often first time claimants who, on average, take longer to find new employment. Claimants who have sporadic or limited labour force attachment and have utilized EI benefits on a consistent or regular basis, meaning three or more regular claims and over 60 weeks of regular benefits in the past five years, are required to expand their search for suitable employment to similar occupations at the onset of their EI claim.

All other claimants have an initial period of six weeks to restrict job search effort to their usual occupation; this provides claimants with a reasonable period of time to assess and identify employment opportunities in their occupation. The rationale for requiring that these claimants expand their job search to similar occupations during weeks 7 to 18 takes into consideration that the average duration of claims for regular benefits is 19 weeks. If these claimants have not found work by week 19, then they are obligated to consider any work which they are qualified to do as being suitable work.

In defining what constitutes a reasonable search for suitable employment, the amended EI Regulations stipulate that factors specific to an individual’s situation, such as family responsibilities and common modes of commute within their community, must be taken into consideration.

The framework for establishing suitable earnings in comparison to previous earnings is in keeping with the broadening of the claimant’s job search over the duration of the claim. It is also aligned with the level of EI benefits to support work incentives and to ensure individuals are better off working than claiming EI.

“One-for-One” Rule

The “One-for-One” Rule does not apply to the amendments, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to the amendments, as there are no costs to small business.

Consultation

The Minister of Human Resources and Skills Development and her colleagues consult citizens and stakeholders from across the country on an ongoing basis on labour market issues, including the EI program.

Implementation, enforcement and service standards

The amendments to the EI Regulations will come into force on January 6, 2013.

Existing implementation and enforcement mechanisms contained in Human Resources and Skills Development Canada’s adjudication and controls procedures will ensure that these regulatory amendments are implemented effectively and efficiently.

Performance measurement and evaluation

The CEIC will monitor the effectiveness of the EI Regulations and will report through the annual Employment Insurance Monitoring and Assessment Report which is tabled in Parliament. The summative evaluation of the CCAJ initiative is scheduled to be undertaken in the spring of 2017.

Contact

Jay Wakelin
Director
Quantitative Analysis
Employment Insurance Policy Directorate
Skills and Employment Branch
Human Resources and Skills Development Canada
140 Promenade du Portage, Phase IV
Gatineau, Quebec
K1A 0J9
Telephone: 819-953-8030
Fax: 819-934-6631

• Footnote a
  S.C. 2012, c. 19, s. 608(1)
• Footnote b
  S.C. 2012, c. 19, s. 608(1)
• Footnote c
  S.C. 1996, c. 23
• Footnote d
  S.C. 2012, c. 19, s. 608(1)
• Footnote e
  S.C. 2012, c. 19, s. 608(1)
• Footnote f
  S.C. 1996, c. 23
• Footnote 1
  SOR/96-332
• Footnote 2
  The term “same occupation” refers to the occupation or occupations in which the claimant worked prior to establishing their EI claim. A “similar occupation” is an occupation in which the claimant is qualified to work and which entails duties that are comparable to the ones that the claimant had prior to establishing the EI claim, but not necessarily the “same” occupation. “Any occupation” is any one in which the claimant is qualified to work (with on-the-job training, if required).