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Federal government urged not to move forward with changes to EI parental leave benefits

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Small business owners understand the need for the time off to care for a new born or adopted child. However, with the recent news of a four cent increase in EI rates in 2017; small business employers will already be faced with the challenges of increasing payroll costs.

What’s the bottom line?

CFIB responded to recent federal government consultations on EI maternity/parental and care giving benefits.

What are the impacts for small biz?

Extending the parental leave from 12 months to 18 months would become a burden for small business owners, as a recent survey shows that 69 per cent of respondents oppose this proposal.

  • Small business owners will struggle to manage an 18 month leave, especially smaller firms that have a handful of staff and multiple employees taking leave at the same time. It adds to the work load for the employer and the remaining staff.
  • It is challenging for a business to find a replacement willing to fill a temporary position, possibly for an undetermined amount of time.
  • There is a significant cost associated with training the replacement and/or having to retrain an employee returning from a lengthy leave.

On the other hand, more than half of small business owners support improving the flexibility and accessibility of compassionate care benefits. However, we would like to advise caution when it comes to the eligibility requirements of these benefits. While ensuring to remain flexible and accessible to those with a legitimate need, we do not want to open the flood gates to all types of requests that would potentially cause a heavy strain on the system.

 

How is CFIB working for you?

CFIB members have expressed that EI parental benefits are already quite generous and having to fill that employment gap would be very onerous for small business owners. In addition, CFIB has made a number of related EI recommendations for the federal government to consider:

  • Consider implementing a permanently lower EI rate for small business;
  • Implement a 50:50 split in EI premiums so that employers and employees contribute equally;
  • Implement a system to allow business owners to claim EI over-contributions as currently over-contributions are reimbursed to employees, but not to employers;
  • Extend the Small Business Job Credit beyond 2016, or
  • Implement a hiring/training tax credit to recognize the added cost for smaller employers seeking to take on new staff.

 

You can read our recently released EI report for more information on our recommendations. CFIB will continue to monitor this file closely.

If you have any questions, contact a CFIB Business Counsellor at [email protected] or by telephone at 1 888-234-2232.