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Do I have to repay my maternity top-up if I’m let go?

The Question

I found your article regarding layoffs while on maternity leave helpful. I am returning to work after a year-long maternity leave, and my company is planning to lay off a significant number of employees in the next two months. I will probably lose my job.

I received a top-up of around $7,000 for my mat leave. I'm required to come back for six months, and if I don't return of my own choice, I need to pay that back. If I'm fired, can the company still expect me to pay this back? Can they subtract it from my severance pay? And do severance packages always count as insurable time if I need to go on employment insurance?

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The Answer

Employers are not required to pay any salary to an employee off on pregnancy or parental leave. However, a top-up contract is an agreement to pay some of an employee's salary, or to "top up" their income, while they are on pregnancy or parental leave by paying the difference between what employment insurance pays and the employee's salary.

These contracts usually state that an employee is responsible for repaying that money only if he or she voluntarily leaves the company within a certain period of time after their leave ends. The key is in the meaning of a "voluntary" departure. Employees who have no choice but to leave, such as when their jobs were eliminated, are not responsible to repay the top-up. Repaying the top-up should only arise where the employee voluntarily resigns or is fired for serious misconduct.

Severance pay is considered insurable time but only where it is paid as salary continuance and not as a lump sum. When it is paid as salary continuance, all of the same ordinary tax deductions are made, so the government considers this employment income just as if you were working. However, in order to restart a claim for employment insurance, you need to meet a number of tests, and eligibility varies depending on where you live. Here is the government's information sheet to assist you.

Daniel A. Lublin is a partner at Whitten & Lublin, representing both employers and employees in workplace legal disputes. Dan@canadaemploymentlawyer.com

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About the Author
Globe Careers employment law expert

Daniel is a nationally recognized workplace law expert and a partner at Whitten & Lublin (www.toronto-employmentlawyer.com), where he represents both individual and corporate clients. Daniel frequently writes and appears in the media as a commentator for workplace legal issues. Since 2008, he has been named as one of Canada's top employment lawyers. More

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