It’s estimated that five to ten percent of the workforce in Canada is laid off every year. If your employer goes bankrupt or becomes subject to receivership, you might lose wages or, in the worst of cases, your job.
While potentially losing your income is obviously shocking, the federal government has implemented the Wage Earner Protection Program (WEPP), which gives you some protection.
Key Points About WEPP
- WEPP provides employees with any outstanding wages their employers owe them but can’t collect due to a qualifying reason.
- The maximum amount you can receive under the WEPP program is $8,507.66.
- Any funds you qualify for under the WEPP will be subject to tax.
- You can apply for WEPP online or via paper application.
What Is The Wage Earner Protection Program For An Employee?
The WEPP is a government-sanctioned financial program that provides employees with any outstanding wages their employers owe them but are unable to collect due to bankruptcy, receivership, or some other WEPP-qualifying insolvency proceeding.
Eligibility Requirements For The Wage Earner Protection Program
Not every worker will qualify for this government program or the entire amount owed.
You may be eligible to receive the WEPP if…
- Your employment is over
- Your previous employer owes you various wages (vacation pay, severance pay, etc.)
- Your previous employer has declared bankruptcy
- Your previous employer is subject to a receivership
- Your previous employer is subject to WEPP qualifying insolvency proceedings
- Your wages were earned during the WEPP eligibility period
- Your employment was terminated during the eligibility period or before the trustee/receiver was discharged (for severance/termination pay)
For more on the eligibility requirements for the WEPP and specifics and details, please refer to this page on the Government of Canada’s website.
You May Not be Eligible to Receive the WEPP if…
- You were an officer or a director at your previous employer
- You once had an ownership interest in your previous employer’s business
- You were formerly a manager who made financial decisions
The WEPP Eligibility Period…
- The 6 months before your former employer filed for bankruptcy, receivership, or other insolvency proceedings.
Types Of Wages You Can Be Compensated For Under The WEPP
- Compensation for services rendered
- Disbursements of a travelling salesperson (properly incurred)
- Gratuities that are collected & accounted for by the employer
- Production bonuses & shift premiums
- Severance/termination pay
- Vacation pay
WEPP Application: How To Apply
You can apply for WEPP online or via paper application. To apply online or via paper application, you’ll need your social insurance number and your Bankruptcy/Receivership, or other WEPP qualifying insolvency proceeding number (Estate ID).
|To get a paper application call: 1-866-683-6516 (TTY: 1-800-926-9105) or go to a Service Canada Centre.
Once you’ve applied, you’ll receive a response from Service Canada within 35 days after they’ve received your application.
Note: If your application is denied, you’ll have 30 days to file a written request for your case to be reviewed by the Minister. The Request For Review By Minster Form allows you to add new information about your case.
Documents And Information Required To Apply For WEPP
Here are the 3 key steps that you’ll need to take to submit an unpaid wages claim through the Wage Earner Protection Program:
Get Your Proof Of Claim Statement
This is a statement that confirms your former employer owes you wages. On this statement, you (the employee/creditor) must state the circumstances that led to your indebted employer owing you wages.
Submit Your Application Online Within 56 Days
Be sure to apply for WEPP within the specified 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.
How Much Can You Receive Under The Wage Earner Protection Program?
According to the terms of Canada’s Employment Insurance Act, you can be compensated with a one time payment that is up to an equivalent of 7x the weekly insurable income. For 2024, the maximum is $8,507.66.
Note: Any funds you qualify for under the WEPP will be subject to tax. You will receive a T4A slip and a Relevé 1 (for Quebec residents only) to file next year’s income tax return.
Can The WEPP Affect My EI Payments?
Yes, your WEPP payments can affect your EI payments because it’s considered as income. If you’re an EI recipient, you must report your WEPP payment through the EI Telephone Reporting Service or Internet Reporting Service.
Depending on your WEPP payment, your EI payments may result in an overpayment and you may be required to repay the amount.
If your former employer owes you wages following a bankruptcy or receivership agreement, the Canadian government might be able to help you collect them. Check out Service Canada’s Wage Earner Protection Program to see if you’re eligible for compensation.