Amounts Paid Following the Decision of the CNESST
If you pay an employee an amount in addition to the indemnity the Commission des normes, de l'équité, de la santé et de la sécurité du travail (CNESST) pays the employee, the amount (referred to as a top-up amount) constitutes employment income. You must make source deductions and pay employer contributions, but do not have to withhold or pay Québec parental insurance plan (QPIP) premiums on the amount.
Advances of indemnities or loans
You are not required to make any adjustments with respect to an advance of indemnities or a loan you made to an employee before the CNESST's decision, if the employee repays or the CNESST reimburses the amount in full because the amount does not have to be included in the employee's income.
If the employee has not repaid or has only repaid a portion of the advance of indemnities or loan by December 31 of the year in which the CNESST makes its decision, we consider that you have forgiven the debt and that the employee received a taxable benefit equal to the amount not repaid over the course of the year. You must make source deductions and pay employer contributions on this amount.
If you allow the employee to use sick leave to repay an advance of indemnities or a loan, the remuneration that corresponds to the gross salary or wages the employee would have received for the sick leave at the time you allow the employee to use the sick leave to repay you constitutes employment income. You must make source deductions and pay employer contributions on this amount.
Example for an employee who uses sick leave to repay an advance of indemnities
Alex owes you $1,200 for an advance of indemnities that corresponds to a pay period of 10 days, for gross remuneration of $120 per day. On their return to work, their gross remuneration increases to $150 per day. At that time, you allow Alex to use their sick leave to repay the amount of the advance.
- Number of days of sick leave used by Alex to repay the amount of the advance of indemnities: 8 days ($1,200 ÷ $150);
- Alex's gross salary on which you are required to calculate source deductions and employer contributions: $1,200 (8 days × $150 per day).
If an employee repays salary or wages (including the payment of sick leave that has been accumulated but not used) or a wage loss replacement benefit that you paid before the CNESST's decision, or repays an excess amount that you paid, you must enter the amount on the employee's RL-1 slip (see courtesy translation RL-1-T). This way the employee can claim a deduction for the amounts repaid during the year in their income tax return.
If the employee does not repay you, you do not have to make any adjustments, as these amounts must be included in the employee's income.