Parental Leave Agreement Signed

HRinfodesk---Canadian Payroll and Employment Law, March 2005

Negotiations are over - the federal and Quebec government have signed an agreement that will as of January 1, 2006, allow Quebec to have its own parental leave insurance (EI) program. The Quebec made program is said to be more generous than the federal maternity/parental leave (EI) benefits combined. Until the new plan is implemented on January 1, 2006, residents of Quebec will continue to have access to the federal employment insurance maternity and parental (EI) benefits.

The Quebec parental leave program consists of eliminating the two- week waiting period and extending parental-leave benefits to part-time workers and the self-employed. Birth mothers will have two options: a 40-week leave at 75 percent of their salary or a 55-week leave at 70 percent of their salary for the first 25 weeks and 55 percent for the rest. The plan would cover 55 percent of wages up to a maximum of $52,000, instead of the current $39,000 under the present federal maternity-parental leave plan. Fathers will be entitled to five weeks of paid parental leave.

The federal government will provide transition assistance to the province for implementation of the Quebec plan. EI premium rates in Quebec would be adjusted to reflect the fact that the federal government would no longer provide these benefits. The federal government will turn over $750 million annually to Quebec to run the program. The money will come in the form of reduced Employment Insurance premiums for Quebec to allow the provincial government to collect premiums for its own leave program. The plan will be administered by the Ministère de l'Emploi et de la Solidarité sociale; as of January 1, 2006, Revenu Québec will be responsible for collecting the contribution to the Québec parental insurance plan. This contribution will apply to employers, employees and self-employed persons.

According to the Revenu Quebec website, employers will be required to pay an employer contribution to the Québec parental insurance plan and collect employee contributions through source deductions. For this, employers will be obliged to modify their payroll systems for 2006, and Revenu Québec will make changes to certain forms used by employers (for example, a new box will be added to the 2006 source deductions remittance form). Employees will pay their contribution to the Québec parental insurance plan through source deductions. Self-employed persons will pay a contribution to the Québec parental insurance plan based on net business income. The contribution is to be paid when they file their income tax return or make installments payments, where applicable.

Once the information regarding changes to payroll systems is available, Revenu Québec will contact the persons concerned. In addition, in November 2005, Revenu Québec will provide employers with the information they need to calculate their employees' contributions.

The federal government stated that similar deals are open to any other interested provinces. According to the federal government, no other province has so far indicated it wants control over its parental leaves.

The agreement goes forward despite the fact that the Supreme Court of Canada has not yet ruled on a request by Quebec and Ottawa to decide whether parental leave is a federal or provincial responsibility.

By Yosie Saint-Cyr, Editor at HRinfodesk

Published on HRinfodesk---Canadian Payroll and Employment Law

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