Fact-Busting HRSDC’s “Just the Facts” on EI Changes

Attempts by the Harper Government to set the record straight over recent changes to EI simply gloss over many valid concerns that have been expressed by critics. I share a couple of EI Change Fact-Busters in solidarity with upcoming rallys on EI that will be taking place across Canada this weekend.

Minister Finley states: “No one will have to take a job that puts them in a worse financial position than collecting EI alone.”

Fact: The majority of EI claimants will have to accept 20-30% lower wages, outside their usual profession, after only 6 weeks of job search.

Minister Finley’s statement is only true in the short term, and only strictly in terms of financial well-being. Employment Insurance is about giving workers time to find a good match – this change forces sub-par labour matches.

In the long term, this policy has the potential to lower wages significantly. If a worker accepts a job at 70% of their wage and finds themselves laid off a year later, the new bar for acceptable wages has been lowered substantially.

Say a worker’s original job paid $100 / day. While on EI, they are forced to accept a job that pays $70 / day. The next time that they find themselves in need of EI, they must immediately accept a job at 80% of their wage at their last job, which is now $56 / day. All of this is subject to minimum wage, but with no guarantee of minimum hours.

In terms of wider labour market implications, pushing skilled workers into lower-paid & less skilled jobs does two things.

First, it means that some other unemployed lower skilled worker doesn’t get that job. Given the level of youth unemployment, this is a grave concern.

Second, it means that the skilled worker may be pushed down the waiting list for skilled employment, which will dilute their skills and lower productivity.

Minister Finley states: “seasonal workers will not be prevented from returning to their seasonal jobs when they start up again.”

Fact: There are consequences to leaving employment that is permanent for employment that is seasonal. Let’s examine a few examples from the guide to enforcing Employment Insurance, titled “Digest of Benefit Entitlement Principles”. The Digest deals with basic terms, common issues, various categories of EI claimants, and elaborates on enforcement details.

Section 6.5.7.2 deals with the issue of leaving permanent employment for temporary/seasonal employment. This becomes important, as frequent and occasional claimants will be forced to look outside their usual field of work much earlier in a claim than was the case in the past, and at much lower wages.

The circumstance will likely arise where skilled workers are forced to accept low paid, low skill work that is indeterminate in nature. Eventually the skilled worker will quit this permanent job to return to their higher skill, higher paid regular employment. Should they be laid off from the seasonal work, they risk not qualifying for Employment Insurance.

Specifically: “If the claimant entered into this new employment knowing that it would be temporary, in order to avoid disqualification they must prove that in their situation they had no other reasonable alternative.”

The claimant must have some proof that they expected the new temporary job to provide sufficient hours to support a new claim. If it does not, then they must somehow prove that leaving the permanent job was “the only reasonable alternative”.

Another rule that affects seasonal workers on EI is the definition of refusal of work. Refusing work can mean failing to apply for work that the claimant is aware of, turning down an employment offer, or failing to take advantage of an opportunity. Section 9.2 defines the concept of refusal.

Failing to take advantage of an opportunity (Section 9.2.3) is especially worrying for frequent claimants. Should the claimant indicate to an employer that they are only available for a limited period of time, for example due to pregnancy or expected return to seasonal employment, this constitutes refusal of employment. Other behaviour that may constitute refusal of work include: “Haggling over the employment offered, demanding a salary which is too high or reporting too late for the interview…”

Minister Finley states: “Without question, EI will continue to be there for those who need it, just as it has always been.”

Fact: EI coverage is falling due to changing rules and changing labour market realities. In 1990, 74 per cent of unemployed persons qualified for Unemployment Insurance. In 2012, only 35 per cent of unemployed persons received EI benefits.

Even more alarming is the 5.5 percentage point decline in the rate of eligibility between 2010 and 2011. An increase in temporary employment since the trough of the latest recession means that a growing number of workers are unable to accumulate sufficient hours to requalify for EI when their temporary employment is terminated.

More and more Canadians are finding that E.I. isn’t there when they need it.

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