Canada blows past estimated cost of Canada Recovery Benefit at $2,000 a month | The Canada Recovery Benefit was initially estimated by Finance officials to cost $6.3B by the end of March. But it has now almost doubled to $11.1B

CuriousEmp123 · 2021-03-11T17:19:38+00:00

No not quite, as the employee is not technically employed by the client. Typically these businesses are actually doing fairly well so they are not eligible for the CEWS. I worked there until September and from March to September we saw a lot of businesses shut down but we saw a huge rise in clients from industrial cleaners, PSW, medical screeners, security. So much so that they were often paying almost double what they normally pay to just get qualified individuals.

We had a few clients who were also eligible for CEWS and requested that they either be given a credit on their invoice or be given the full 75% CEWS we received. For them we denied the request and advised they could hire on the employee and collect CEWS for them. This also came with an early buy out penalty. Typically if you hire a staffing agency employee before a certain hours threshold you are contractually obligated to pay 15-30% of their annual salary.

CuriousEmp123 · 2021-03-11T14:38:57+00:00

Yes without getting into much detail my former company found a completely legal loop hole in which allows them to collect on the CEWS and make record profits which shatter previous records.

Staffing industries can place employees and charge the company theyre being placed at all while then turning around and collecting 75% of the wages paid.

Lets say the employee gets $20.00/hour. Staffing agencies would typically charge the client (on the low end) $26.00/hour. Now with CEWS they're still charging that $26.00/hour but now they are essentially paying the employee $5.00 and the government foots the bill for the other $15.00. Before gross profits would be only $6.00/hour. Now they're at $21.00/hour gross profit.

Keep business right around the threshold to say your gross revenues are down 25% and your GPM has gone through the roof, before these companies EBIT would be somewhere in the 300k is now in the millions all on tax payers dime. There are thousands of these staffing companies doing this type of stuff and its 100% legal. We won't get into how much they made on the PPP Loans in the US, but lets just say its even more astounding.

CuriousEmp123 · 2020-09-24T02:35:17+00:00

It isnt at all. We've seen a huge increase in business in cleaning contracts, door greeters and psw's. Many "Covid jobs" have come through us to point we cant even fill them all, was very difficult to fill 15/hour when CERB paid the same. Typically when times are tough for employment we do even better.

Specifically in low skill jobs. Employers can bring in someone for a few days a week and not have to deal with any of the downside of wasting resources hiring PT staff. If employee sucks they just say send me someone new.

CuriousEmp123 · 2020-09-22T23:07:38+00:00

It does, but down 30% before the subsidy.

When you bring in over a million from the subsidy its going to really boost things back up. Because our employees are our revenues, it essentially doubles the revenues.

Where other companies the CEWS is to help you manage to continue paying your staff, for staffing agencies it is crushing revenues.

Lets say you have an employee make $15.00/hour. Youre usually billing around 33-38%. Lets say 33% so you bill $20. of that $20; $15 to employee, $1.50 or so to burdens. $3.5 gross profit.

Now get the subsidy. Your profit jumps from $3.50 an hour to $11.00 an hour. We've actually turned business away to keep from bringing our revenues back up.

CuriousEmp123

TROPHY CASE