When sales drop or costs rise, layoffs can seem like the only choice. The EI Work‑Sharing program offers Canadian employers another way. You can temporarily reduce employee hours. Employment Insurance (EI) then helps replace part of the lost wages. This way, you keep your team together and are ready to recover quickly when business improves.
The Work‑Sharing program is a federal EI initiative managed by Employment and Social Development Canada (ESDC). It is meant for temporary, unexpected downturns that are out of your control. It is not for long‑term restructuring or normal seasonal slowdowns.
Here’s how EI Work‑Sharing can help employers avoid layoffs:
Reduced hours instead of job losses
Employees in a work‑sharing unit agree to work fewer hours than usual. The reduction must be at least 10% of regular weekly earnings.
EI partially replaces lost wages
While employees work less, EI pays benefits to make up part of the lost income. The amount depends on how much work hours are reduced.
Shared impact across the team
Rather than laying off a few workers, the reduction is spread across a group. This helps keep skills, morale, and productivity in place.
Temporary agreements with set timelines
Work‑Sharing agreements are for a limited time and help bridge a short‑term slowdown. Sometimes, ESDC introduces special measures during major disruptions like global trade issues. Check the ESDC website for the latest information on program extensions and special rules.
This approach often helps manufacturers, exporters, and service businesses facing supply chain problems, tariffs, or sudden drops in demand.
Your business must meet all of these requirements to use EI Work‑Sharing:
If you want to check your eligibility quickly, GrantHub’s eligibility matcher can help you compare your business and workforce to federal program rules before you apply.
The slowdown must be temporary and unexpected for your business to qualify. Common examples include:
Planned shutdowns, ongoing financial problems, or regular seasonal slowdowns usually do not qualify.
Treating work sharing as a permanent fix
The program is for short‑term downturns only. Applications tied to long‑term or ongoing problems are often rejected.
Not getting employee agreement upfront
All employees in the work‑sharing unit — and unions, if there is one — must agree to the reduced hours before you apply.
Missing the minimum hour reduction
If the reduction drops below the required 10%, EI benefits can be reduced or stopped.
Applying too late
Work‑Sharing is not retroactive. Apply as soon as you see a downturn starting, not after layoffs have begun.
Q: What is the EI Work‑Sharing program?
It is a federal program that lets employers and employees share reduced work hours. EI helps replace lost wages during a temporary downturn.
Q: Do employees still receive EI while working reduced hours?
Yes. Employees get EI benefits to help cover income lost from reduced hours. The amount is based on how much work is reduced.
Q: How long can a Work‑Sharing agreement last?
Agreements are for limited periods and are meant for temporary downturns. ESDC may allow extensions during major disruptions. Check their website for current rules.
Q: Are EI Work‑Sharing benefits taxable?
Yes. EI benefits paid through Work‑Sharing count as taxable income.
Q: Can non‑profit organizations apply?
Some non‑profits qualify, depending on their structure and activities. Always confirm eligibility before applying.
GrantHub tracks hundreds of active federal and provincial programs across Canada—including wage supports, EI programs, and employer relief measures—so you can see which ones fit your business profile.
If layoffs seem likely, EI Work‑Sharing could give you another option. It is important to understand the eligibility rules and act quickly, especially during fast‑changing downturns. GrantHub helps you find employer support programs, check for special measures, and explore other funding or relief options that may work with Work‑Sharing.
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