Incentivising Employment during the COVID-19 Pandemic

(2020) 8:3 The Theory and Practice of Legislation 355

27 Pages Posted: 17 Apr 2020 Last revised: 21 Nov 2020

See all articles by Phil Lord

Phil Lord

Université de Moncton - Faculty of Law; McGill University - Faculty of Law; York University - Osgoode Hall Law School

Date Written: 2020


This article considers government responses to unemployment caused by the COVID-19 pandemic. It analyses the two main legislative responses adopted by North American governments: a broadening of access to (un)employment insurance (EI) and the adoption of payroll subsidies for companies. It comparatively and critically assesses these two solutions, to eventually propose an alternative plan. Under this plan, access to EI would be broadened to cover those not traditionally covered by it, such as self-employed workers, contract workers, and those caring for a family member sick from COVID-19 or for a child who is at home due to school and day-care closures. Unemployed workers who have traditionally paid into the EI system would be rewarded through a tax credit. To avoid incentivising temporary layoffs, a payroll subsidy would be adopted. The subsidy would make it as attractive to keep workers on payroll as to lay them off so they can benefit from EI. It would also provide a more faithful picture of unemployment rates during the crisis. The plan would also address broader concerns regarding the unsustainability of public spending during the crisis by limiting access to both temporary layoffs and the payroll subsidy. Large and profitable companies, as well as companies with high revenue or cash reserves, would not be able to temporarily lay their employees off during the crisis or benefit from the subsidy. For companies that face liquidity issues yet are not eligible for the subsidy, short-term, interest-bearing emergency loans would be available.

Keywords: health crisis, coronavirus, COVID-19, private sector, government, virus, public health, employment insurance, unemployment, financial crisis, public law, stimulus, GDP, layoff, business, regulation

Suggested Citation

Lord, Phil, Incentivising Employment during the COVID-19 Pandemic (2020). (2020) 8:3 The Theory and Practice of Legislation 355, Available at SSRN: or

Phil Lord (Contact Author)

Université de Moncton - Faculty of Law ( email )

18 Antonine-Maillet Ave
Moncton, NB E1A 3E9


McGill University - Faculty of Law ( email )

3644 Peel Street
Montreal, QC H3A 1W9

York University - Osgoode Hall Law School ( email )

4700 Keele Street
Toronto, ON M3J 1P3

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