What Is The Wage Earner Protection Program?

What Is The Wage Earner Protection Program?

Written by Bryan Daly
Fact-checked by Caitlin Wood
Last Updated October 5, 2021

Having a job is an important part of living in Canada. Not only does a good source of employment help pay the bills, but it can also make you eligible for various benefits, such as health coverage, retirement programs and cost reimbursements (travel, fuel, etc.). On the other hand, some jobs are only as good as the people who run the show. 

Unfortunately, if your employer goes bankrupt or becomes subject to reviewership, you might lose wages or, in the worst of cases, your job. Don’t worry, because that’s exactly why our federal government has implemented the Wage Earner Protection Program.

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What is The Wage Earner Protection Program?

As mentioned, the WEPP is a government-sanctioned financial program that helps workers earn any wages that are owed to them as a result of their former employer…

  • Going Bankrupt – Every year, around 10,000 to 15,000 Canadian workers claim that they haven’t been paid because their employer has declared bankruptcy. While this remedy clears unsecured debts, the employer may have to surrender their assets as payment, which can lead to you losing your job or wage.
  • Being Subject to Receivership – If an employer defaults on secured debt payments and violates a security agreement, their creditor can hire a “Receiver” to possess, sell, or liquidate any assets that were used as collateral. Receivers can be appointed by the court (Licensed Insolvency Trustees) or privately by the creditor. 

Wages That Are Eligible For The WEPP Include:

  • Commissions
  • Compensation for services rendered
  • Disbursements of a travelling salesperson (properly incurred) 
  • Gratuities that are collected & accounted by the employer
  • Production bonuses & shift premiums 
  • Salaries
  • Severance/termination pay
  • Vacation pay   

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How Does The WEPP Work?

Here are the 3 key steps that you’ll need to take in order to submit an unpaid wages claim through the Wage Earner Protection Program:

Get Your Trustee/Receiver Information Form (TIF)

Your Trustee/Receiver Form is filed by the Licensed Insolvency Trustee or Receiver that’s overseeing your employer’s bankruptcy or receivership case. Normally, Trustees and Receivers have 45 days (following the bankruptcy or receivership date) to file this form through Service Canada, who will send you a copy soon after it’s been processed.

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Submit a Proof of Claim Statement

After your TIF is complete, it’s time to submit a proof of claim statement with your employer’s Trustee or Receiver. On this statement, you (the employee/creditor) must state the circumstances that led to your indebted employer owing you wages. For the claim to be validated, you must also include:

  • Your contact information (name, address, etc.)
  • Your job position
  • The length of your employment
  • The types and amounts of wages you are owed
  • The days and times that you worked but didn’t get paid

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Submit Your Application Online

As soon as you get your copy of the Trustee/Receiver Information Form, you can turn in your application via the Service Canada website. This must be done within the specified time period of 56 days following the date of:

  • Bankruptcy or Receivership
  • Resignation, expiry of employment term, retirement or termination
  • Employment termination conducted by the Receiver

Before you start your application, keep in mind that you may have to file other forms to fully qualify for the Wage Earner Protection Program. That said, a combination of the above documents will help determine your eligibility status and compensation amount.    

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How Much Can You Receive Under The Wage Earner Protection Program?

According to the terms of Canada’s Bankruptcy and Insolvency Act and Employment Insurance Act, the Wage Earner Protection Program can compensate you for up to 7 weeks or $7,578.83 of insurable wages during either of the legal scenarios above. 

However, once you subtract the standard 6.82% as is traditionally ordered by the Wage Earner Protection Program Regulations, the maximum amount of wage compensation you can currently receive under the WEPP is $7,061.95. 

Watch out, as this figure represents bankruptcies or receiverships dated on or after January 1, 2021. The eligibility requirements and compensation amounts you encounter may vary from year to year and scenario to scenario. Depending on the circumstances that led to your unpaid wages, you may or may be protected for the full amount. 

Check out how the government of Canada is offering businesses affected by COVID-19 a 75% wage subsidy

What Happens if You’re Accepted or Denied?

Here’s what can happen if your Wage Earner Protection Program claim is:

  • Accepted – If you’re eligible, Service Canada will typically process your claim, then send out your payment within 35 days of your application’s submission date. Since any funds you qualify for under the WEPP will be subject to tax, you should also receive a T4A slip to file alongside next year’s income tax return.  
  • Denied – Remember, there is a chance that Service Canada will deny your application. However, they will give you 30 days to file a written request for your case to be reviewed by the Minister of the previous decision. The Request For Review By Minster Form allows you to add new information about your case.

Eligibility Requirements For The Wage Earner Protection Program

Sadly, not every worker will qualify for this government program or the entire wage amount they were hoping to be compensated for. According to the Wage Earner Protection Program Act, here’s what can happen if you apply: 

You May be Eligible to Receive The WEPP if…

  • Your employment term has expired or your position has been terminated
  • Your previous employer owes you various wages
  • Your previous employer has declared bankruptcy
  • Your previous employer is subject to a receivership that’s regulated under Canada’s Bankruptcy and Insolvency Act 
  • Your wages were owed during the WEPP eligibility period
  • Your employment was terminated during that period or before the trustee/receiver was discharged (for severance/termination pay)

You May Not be Eligible to Receive the WEPP if…

  • You once had an ownership interest in your previous employer’s business
  • You were one of your previous employer’s officers or directors
  • Your previous employer is not the subject of a receivership agreement
  • Your previous employer has applied for bankruptcy protection but has not declared bankruptcy yet
  • You were formerly a manager whose responsibilities included:
    • Making necessary choices concerning the payment or non-payment of wages by your previous employer
    • Making necessary financial choices that used to affect your previous employer’s business

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The WEPP Eligibility Period… 

  • Is a 6-month term that ends on your previous employer’s bankruptcy or receivership date (this is for employers who have not restructured their business)
  • Normally starts 6 months prior to a business’s restructuring and finishes on the previous employer’s bankruptcy or receivership date

Bottom Line

If your former employer owes you wages following a bankruptcy or receivership agreement, the Canadian government might just be able to help you collect them. Check out Service Canada’s Wage Earner Protection Program to see if you’re eligible for compensation.    

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Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.

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