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Compensation Fund for Employees in the Construction Industry

A new regulation respecting the Compensation Fund for Employees in the Construction Industry (CFECI) changes certain rules concerning compensation of workers. Learn more about the new regulation.

The Regulation Respecting the Compensation Fund for Employees in the Construction Industry came into force on January 6, 2016. In general, wages lost during work periods prior to January 6, 2016, will be processed according to the conditions of the collective agreements in force. Starting on this date, the new regulation will apply.

The Compensation Fund for Employees in the Construction Industry (CFECI) is used to compensate workers for lost wages. It is governed by the conditions set out in the regulation, composed mainly of an employer contribution ($0.02 for each hour worked by the employer’s employees), and administered by the Commission de la construction du Québec (CCQ).

The CFECI is used to compensate workers who have lost wages due to:

  • An employer’s insolvency (bankruptcy, receivership, proposal, consumer proposal, voluntary deposit by employer)
  • A writ of execution that is reported unsatisfactory after a judgment rendered against the employer or after an approved arbitration award
  • Participation in a trial as a juror

Eligibility

To be eligible to receive compensation from the CFECI, an employee must:

  • Hold the required and valid competency certificate at the time the work was done
  • Have performed work covered by Act R-20
  • Have filled out and signed a salary complaint. The complaint must be accompanied by the required documents and be received by the CCQ no later than 60 days after the date on which the employee should have received the wage
  • Actively cooperate with the CCQ to settle the file

Calculation of 60 days from the date when wages were due

To preserve the right to be compensated by the CFECI, employees must submit a salary complaint with all of the documents and information required.

Non-payment of current earnings
If an employee is not paid current earnings or receives a not-sufficient-funds cheque, he or she has 60 days following the non-payment to submit a salary complaint.
Example for current earnings: an employee works from Monday, January 11, to Friday, January 15, 2016. Under the terms of the collective agreement, his employer must pay him his wages in full by Thursday, January 21, 2016, at the latest. When the employee realizes that he has not received his current earnings in full, he may file a salary complaint by March 21, 2016 – 60 days after the non-payment – at the latest in order to be eligible for the Compensation Fund for Employees in the Construction Industry.

Vacation and statutory holiday statements
For sums not transmitted by an employer, observed by employees when they receive their vacation and statutory holiday statements, they will have 60 days starting on July 1 or December 1 to file a salary complaint.

Compensation

The compensation that employees may obtain from the fund corresponds to the wages that they should have received under the terms of the collective agreement applicable at the time of the loss of wages. Wages eligible for the fund correspond to:

  • Current earnings
  • Travel costs
  • Money set aside for annual vacations, paid statutory holidays, and sick days
  • The employer contribution to the complementary account ;
  • The employee contribution to the complementary accounte of the pension plan.

The following limits are set to compensation from the CFEIC:

  • A maximum of six weeks of current earnings (and travel costs) is admissible
  • The compensation paid to workers will be automatically reduced by all amounts that they have received or have the right to receive from another compensation program
  • Employees cannot have received compensation for work performed illegally and in contravention of any provision of a collective agreement
  • A company officer cannot receive compensation
  • Employees cannot be compensated more than twice for insolvency situations involving the same employer or a person treated as the same employer
  • No compensation is paid if:
    • The employee knew that his or her employer did not declare him or her on the monthly report
    • The employee knowingly participated in a system of undeclared earnings
    • The employee worked in contravention of the law or of any provision of a collective agreement

Waiting period for payment of compensation

The amount of time between filing of the complaint and the CCQ’s decision on payment of compensation is based on the normal period needed for analysis and processing of the complaint, including legal steps, if applicable.
Here are the typical steps in processing a complaint that may lead to payment of compensation:

  • Analysis and processing of the salary complaint
  • Civil remedy, if applicable (delays beyond the CCQ’s control)
  • Transfer to the CFEIC, depending on the insolvency situation
  • Analysis and processing of the compensation application at the CFEIC
  • Decision and payment, if applicable, by the CFEIC

After the CFEIC analyzes the compensation application, the CCQ will the worker the final decision in writing. If the worker is eligible for the compensation fund, the CCQ will pay the compensation within 60 days following the favourable decision.

Decision appealable to the Tribunal administratif du travail

Employees may appeal the decision rendered by the CCQ to the Tribunal administratif du travail (TAT). An employee who feels that the result of the CCQ’s decision adversely affects his or her right to compensation may request that the CRT review the decision within 30 days following receipt of the decision.

WEPP: Another compensation program for workers!

The Government of Canada has created the Wage Earner Protection Program (WEPP) to compensate workers for wages lost during the six months preceding the bankruptcy or receivership of their employer. WEPP compensates eligible employees for all unpaid wages, vacations, or severance pay, but not for social benefits.

The employer’s bankruptcy trustee is obliged to register employees with WEPP and send all employees a form that they will have to fill out and send to Service Canada in order to receive the compensation. The compensation paid to employees by the CFEIC will automatically be reduced by the amount that they receive or have the right to receive from WEPP, whether or not the employee fills out the application to Service Canada.