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Canada Tweaking Workers’ Compensation System in Response to COVID-19

Akin to their neighbors to the south, employers in Canada have been hit hard by the COVID-19 pandemic and have had to make difficult decisions to maintain the financial viability of their enterprises.


The most common decisions include temporary layoffs, compensation adjustments and terminations. The Canadian government, however, has rolled out programs for both employees and employers across the country, including the Canadian Emergency Response Benefit and the Canadian Emergency Wage Subsidy program.

Additionally, provinces throughout the country have made changes to their workers’ compensation legislation in response to COVID-19. Littler Mendelson P.C. outlined these changes, which include enacting financial relief measures for employers in the form of special payment rules, and updating the mechanisms for assessing workers’ compensation claims. 

“The workers’ compensation system in Canada is a no-fault insurance system that provides employees who become injured or ill at the workplace with compensation from a statutorily established accident fund,” writes Littler’s Canadian practice. “Most employers in Canada participate in this system either because they are obligated by legislation to do so, or because they can ‘opt in’ in certain jurisdictions. This system exists in the provinces and territories but does not exist at the federal level. Federally regulated employers can also choose to ‘opt in’ to a province’s or territory’s workers’ compensation system. Workers’ compensation systems replace the right of employees to sue their employers, co-workers or others for losses arising from such accidents.”

One of the article’s authors, Sari Springer, managing partner in Littler’s Toronto office, noted that provincial governments have quickly enacted legislation to protect employees by “legislating new emergency leave provisions and/or amendments to their local employment standards legislation in order to allow employees in many circumstances the ability to remain off work, on protected leaves.”

The Littler article explains that employer contributions to a government fund for workers’ compensation coverage are generally statutorily mandated. Contribution amounts vary and are dependent on factors such as the total amount of salary and wages paid by the company to its employees; the employer’s “experience rating,” which depends on its accident history; and the nature of the employer’s business. 

Employers with operations in Canada, Littler notes, are encouraged to become familiar with the recent workers’ compensation financial relief measures enacted in response to the COVID-19 crisis. Furthermore, although workers’ compensation claims are made by employees rather than employers, employers are encouraged to become familiar with the assessment procedures for workers’ compensation claims related to COVID-19.

 “At this stage, employers tend to be taking a very careful and thoughtful approach to addressing their workforce related decisions,” Springer said. “We are anticipating that in the not too distant future, their focus will change to how to best begin contemplating a staggered recall of employees to ensure a safe, smooth and gradual return to work.”

About the Author

Brett Christie Bio Image

Brett Christie is the managing editor of Workspan Daily.

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