Pay Increases in 2018

A recent survey by Mercer Canada indicates the average Canadian salary is projected to increase by 2.4 per cent which is up from 2.3 per cent in 2017. Top performing employees are expected to receive increases that are 1.8 time higher than raises for average employees.

The survey also found that 69 per cent of respondents cited employee retention as their number one concern and are looking at other options for retaining key talent including extra vacation or personal days and subsidizing education and skill development programs.

Alberta Dental Fee Guide Update

The Alberta Dental Association & College published its first Fee Guide since 1997. This new Fee Guide took effect September 1, 2017 and came after the provincial Health Minister and the Canadian Life and Health and Insurance Association presented statistics showing Alberta’s dental fees are 26 – 32% higher than the rest of Canada.

In prior years, insurance companies and providers used a variety of methods to reimburse dental procedures which often resulted with inconsistencies but now dental claim reimbursements will be limited to the published fee guide rates.

Manitoba Caps Dispensing Fees

Effective August 18, 2017, the Manitoba Pharmacare program introduced limits on dispensing fees in the form of both dollar and frequency caps.

Under the Dollar Caps, pharmacies will be able to charge up to $30 per prescription regardless of the cost of the drug or how its packaged. In cases where the drugs need to be compounded in sterile conditions, pharmacies can charge the Pharmacare plan up to $60.

Under the Frequency Cap, pharmacies will no longer be reimbursed for more than two professional fees per 30 day period per drug.

There is no legislation prohibiting a pharmacy from charging dispensing fees over these guidelines, therefore any amounts in excess may be charged to the plan members employer sponsored plan.

Changes to Employment Insurance Benefits

A number of changes affecting employees in the banking, telecommunication and transportation industries affecting employment insurance and leave allocations are coming later this year and include:

• Employees can begin receiving employment insurance maternity benefits as early as 12 weeks before their due date up from the former 8 weeks
• Under parental benefits, recipients can choose to either receive benefits spread over 18 months or one year
• There will also be a choice to receive 55 per cent of average weekly earnings at the existing duration of 35 weeks or to take extended benefits for up to 61 weeks at 33 per cent
• Changes under the Canada Labour Code include the provision of up to 63 weeks of unpaid parental leave and up to 78 weeks of combined maternity and parental leaves
• Caregivers helping a critically ill or injured adult family member will receive employment insurance benefits for up to 15 weeks and, under the Canada Labour Code, a corresponding unpaid leave for up to 17 weeks
• Eligibility for Employment Insurance benefits will extend to any member of the family helping tend to a critically ill child

A plan sponsor needs to update their Human Resource policies, Employee Handbooks and wording under a Supplemental Employment Benefit plan to accommodate these changes.

Employment Insurance Rates Rise

The Canada Employment Insurance Commission has confirmed that 2018 Employment Insurance (EI) rates are increasing from $1.63 per $100 of insurable earnings to $1.66 and, accordingly, maximum insurable earnings will also increase from $51,300 to $51,700.

Enrollment in local colleges, 2005

In Quebec, EI premiums are lower than the federal rates as Quebec finances its own parental insurance benefits. For employees residing in Quebec, EI will increase from $1.27 per $100 of insurable earnings in 2017 to $1.30 with maximum contributions increasing from $652 annually to $672.10. The maximum contribution for the employer will increase from $912 to $940.94.

An Employers Liability for Loss of Disability Coverage

There is a risk that occurs when an employer who offers disability plan coverage to its employees, terminates the employment of an employee and the disability benefits coverage is not continued for the entire period required by law.

Subject to province specific exceptions and enforceable contractual provisions, an employer is entitled to terminate an employee’s employment without cause upon providing reasonable notice. Such notice can be provided as working notice, pay in lieu of notice or a combination of the two. Where pay in lieu is provided, the employer must “make the employee whole” for the entire reasonable notice period.

In the Ontario case of Brito v. Canac Kitchens, the Court assessed the reasonable notice period to be 22 months. Ultimately, the Court concluded that Canac was responsible to pay for 17 weeks of Short Term Disability as well as Long Term Disability until his 65th birthday.

Other than not providing disability benefits to its employees, there are some steps an employer can take to address this risk, including:

1. Before employment commences, ensure employees sign employment agreements that have enforceable termination provisions that include a limit for the continuation of benefits (including disability benefits) to the requirements of applicable minimum employment standards legislation
2. Upon termination of employment, the employer should obtain a full and final release from the departing employee that releases the employer from any liability for loss of the disability benefits
3. Either discuss with the group benefits insurer an option to continue coverage during a working notice period and any pay in lieu notice when the plan is set up or, on a case by case basis, arrange for alternate disability coverage with another insurer.