Work Sharing Program

Overview of the Work Sharing Program program:

The Work-Sharing Program is a federal employment support initiative designed to prevent layoffs during temporary slowdowns in business activity. Administered by Employment and Social Development Canada (ESDC), the program enables employers to retain their trained workforce and quickly resume full operations when conditions improve. The program is a three-party agreement between the employer, employees, and Service Canada, under which employees agree to a reduction of their normal working hours and share the available work over a specified period. The primary goal is to ensure that businesses undergoing short-term difficulties—caused by factors beyond their control such as economic downturns, supply chain disruptions, or natural disasters—can retain key staff and reduce layoffs. During the Work-Sharing period, employees receive EI benefits to partially compensate for their lost wages while working reduced hours. These workers must be “core staff” who are eligible for EI benefits and willing to reduce their working hours equally. There are three program streams: Work-Sharing (WS) – standard business downturns Work-Sharing for COVID-19 Recovery – extended agreements due to pandemic-related recovery Work-Sharing for the Steel and Aluminum Sector – tailored supports for impacted industries Each Work-Sharing agreement lasts between 6 and 26 weeks, with possible extensions up to 38 or 76 weeks under special conditions. Employers must submit a recovery plan and demonstrate how they expect to return to normal operations. The program is particularly beneficial in mitigating mass layoffs while preserving organizational continuity, productivity, and morale during uncertain times.

Benefits of the Work Sharing Program program:

• Reduces or eliminates the need for layoffs during temporary business slowdowns
• Helps businesses retain skilled workers and avoid future recruitment and retraining costs
• Allows employees to maintain employment and receive EI income for lost hours
• Encourages collaboration between employees and management during recovery
• Streamlined process with dedicated Service Canada support
• Extension possibilities up to 76 weeks under specific scenarios (e.g., pandemic, sector crisis)
• Accessible to a wide range of businesses, including for-profit and non-profit organizations

Eligibility criteria of the Work Sharing Program program:

• Employer eligibility requirements:
• Be a publicly held or private business, or a non-profit organization
• Operate year-round in Canada for at least 1 year
• Experience a recent minimum 10% reduction in business activity
• Demonstrate the downturn is temporary and beyond employer control
• Have 2 or more core employees in the Work-Sharing Unit (WSU)
• Prepare and submit a detailed Recovery Plan
• Agree to avoid layoffs during the WS agreement
• Employee eligibility requirements:
• Must be considered core staff: permanent, year-round, and eligible for EI
• Agree to a reduction in normal working hours (1060%)
• Must not be seasonal, casual, or part-time non-core staff
• Cannot be shareholders with more than 40% ownership interest in the business
• Must not be participating in another government work subsidy program at the same time