Canada’s rules for sick and caregiving leave must be redesigned

When the pandemic hit, many workers without sick-leave benefits were forced to choose between taking unpaid time off or going to work sick and possibly spreading the virus. Over the course of 2020 and 2021, amid mounting public pressure, the federal, provincial and territorial governments introduced a suite of temporary measures to provide workers with sick and caregiving leaves. These measures are set to expire in the coming months. Before this happens, policy-makers should permanently fix Canada’s flawed patchwork of income-support programs and job-protection laws for workers who need to take leave when they fall ill or have to provide care.

In a paper published by the Institute for Research on Public Policy, we examined federal and provincial/territorial pre-pandemic and emergency measures governing short-term sick and caregiving leaves, as well as those in jurisdictions outside Canada. Prior to COVID, less than half of workers in Canada had access to employer-paid and protected leaves.

Based on our analysis, we propose a plan to create a new leave regime that would cover all workers in Canada, not just those who have negotiated paid leaves with their employers.

When workers decide that they cannot take time off because of inadequate benefits or leave rules, it can have significant consequences for both individuals and society. A large body of research documents the high cost of sick people going to work and spreading infection among co-workers, resulting in long absences, more serious health problems and lower productivity. Limited access to caregiving leave can contribute to worker burnout and result in unmet health care needs that may end up requiring more complex care, resulting ultimately in higher provincial and territorial health-care spending.

The lack of adequate leave provisions disproportionately affects women, especially women in precarious jobs, many of whom are recent immigrants and racialized workers, as they typically are the primary caregivers in households.

Canada’s limited and complex leave rules

In Canada, employment standards laws that govern leave benefits are set by federal, provincial and territorial governments, and income-support benefits are provided by the federal government through the Employment Insurance program. Most jurisdictions don’t require employers to provide any paid sick days. The exceptions are Prince Edward Island, Quebec, and federally regulated sectors (figure 1). To be eligible for EI leave benefits, employees must have worked 600 hours in the previous year, and benefits are set at 55 per cent of a recipient’s insurable earnings for up to 15 weeks.

The measures governing caregiving leaves are similarly flawed. Few provinces and territories require employers to provide paid leave for short-term family caregiving responsibilities, and the EI caregiving benefits generally don’t provide income replacement for short-term leaves.

As for the increasing number of self-employed workers ─ including those hired by digital platforms and app-based companies ─ performing essential work during the pandemic, neither job-protection rules nor income-support measures apply to them, as they fall outside employment laws and social programs.

In September 2020, several months after the onset of the pandemic in Canada, the federal government introduced the Canada Recovery Sickness Benefit and the Canada Recovery Caregiving Benefit, which provide income support to workers who are unable to work at least 50 per cent of their scheduled week due to a COVID-related illness, child care obligations, or having to care for a family member. These benefits are due to expire at the end of October 2021.

In spring 2021, in the midst of the third wave and mounting caseloads, health experts and labour leaders called on provincial governments to introduce legislation mandating paid sick days, to curb the spread of the virus in workplaces and ease the burden on hospitals. Ontario enacted legislation in April that provides workers with three days of paid leave for COVID-related reasons; the provision will expire at the end of 2021. British Columbia enacted similar measures in May. So far B.C. is the only jurisdiction that has pledged to create a permanent short-term paid sick-leave benefit; this comes into force in January 2022.

Pragmatic reforms needed

Canada’s paid and protected leave regime lags behind those of other countries. A 2011 study of 190 countries found that 154 provide paid sick leave. Twenty-nine countries ─ mostly European ─ have adopted a shared-cost model, which requires that the employer bear the cost of short-term sick pay and the social insurance system the cost of long-term leaves. The number of weeks of employer-paid sickness leave varies considerably. Yet most countries require employers to pay for at least the first two weeks of paid leave, and several countries require employers to pay even more. About 85 per cent of these plans allow 26 weeks or more of paid leave, with benefits beginning the on first day of the leave.

When we looked at the level of income support, Canada also came up short. A 2018 survey found that 19 of 34 countries in the Organization for Economic Co-operation and Development (OECD) have wage-replacement rates of 80 per cent – much higher than the 55 per cent available under Canada’s EI sickness benefits.

We recommend that all workers receive 15 days of short-term employer paid leave to cover both illness and caregiving needs. This would bring Canada in line with its international peers, and mesh with medium- and long-term leave benefits available under EI and other provisions. We propose that workers be able to take the leave in hours and not be obliged to take full days or weeks.

We also strongly favour the predominant OECD model for Canada, in which the employer pays for the first weeks of sick leave, with the primary goal of providing all workers with easy access to generous paid leaves.

Our proposed plan would allow workers certainty that they would continue to receive an income when they take a leave, and they would not experience delays in receiving benefits.

Policy-makers must also find a way to extend leave provisions to some groups of self-employed workers. This may require measures to prevent workers from being misclassified as self-employed, as well as a special EI regime that could be mandatory for certain self-employed workers and the firms that hire them.

It’s high time that Canada permanently fixed its system of short-term leaves. These provisions have not kept pace with women’s higher rate of participation in the labour force or with the increase in precarious jobs. Workers are becoming more vocal about the growing challenges they face in fulfilling their employment and caregiving obligations. Policy-makers should move quickly to redesign sick- and caregiving-leave rules and ensure that all workers have access to these critical benefits, they should not wait until the next health emergency forces their hands.Policy Options Podcast · PO Podcast 133 – Overhauling Canada’s sickness and caregiving leave regime

This article first appeared on Policy Options and is republished here under a Creative Commons license.