If your New Brunswick employer officially declares bankruptcy, the provincial Employment Standards Branch can no longer collect your unpaid wages. Instead, you must immediately apply to the federal Wage Earner Protection Program (WEPP) through Service Canada to recover up to $8,500+ of your stolen pay, vacation pay, and severance.
Arriving at work only to find the doors padlocked and a bankruptcy notice on the window is a devastating experience. When a business in Miramichi, Moncton, or Edmundston suddenly goes under, the employees are often the last to know. Not only do you instantly lose your job, but you are typically left holding the bag for weeks of unpaid wages, unremitted vacation pay, and owed severance.
When a corporation enters formal bankruptcy or receivership, a legal shield goes up. ⚠️ You can no longer sue the business in provincial court, and the New Brunswick Employment Standards Branch cannot force the company to pay you. However, you are not entirely out of luck. The federal government operates a safety net called the Wage Earner Protection Program (WEPP) specifically designed to bail out workers in this exact scenario. Here is the step-by-step process to secure your funds.
Step-by-Step Process to Recover Bankrupt Wages
Navigating a corporate bankruptcy requires moving quickly and dealing primarily with federal agencies and accountants. Follow these precise steps to ensure you do not miss your window for compensation.
Step 1: Identify the Licensed Insolvency Trustee (LIT)
When a company goes bankrupt, the court appoints a Licensed Insolvency Trustee (LIT) or a Receiver to liquidate the assets. 🔍 You will usually receive a formal letter in the mail notifying you of the bankruptcy. This letter will contain the name and contact information of the Trustee. If you do not receive a letter, search the federal bankruptcy registry or check the notices posted on the business doors.
Step 2: File a “Proof of Claim”
You are officially a creditor of the bankrupt company. To get in line for any money, you must fill out a document called a “Proof of Claim” and submit it to the Trustee. On this form, outline exactly how much you are owed in base wages, overtime, statutory holiday pay, and vacation pay. Attach copies of your final pay stubs and timesheets as proof.
Step 3: Receive Your WEPP Information Kit
Once the Trustee reviews your Proof of Claim and validates your hours, they are legally required to inform Service Canada of the amounts you are owed. 📝 The Trustee will then send you a WEPP Information Kit. This kit is crucial, as it contains specific identifying details about the employer’s bankruptcy estate that you will need to apply for the federal funds.
Step 4: Submit Your WEPP Application Online
Do not wait. As soon as you have your WEPP kit and your Social Insurance Number (SIN), go to the Service Canada website. You must complete and submit the WEPP application form within 56 days of the date of the bankruptcy or receivership. The online application is the fastest way to get your file processed.
Step 5: Await Your Federal Payment
Once Service Canada receives your application and confirms the data with the Trustee, they will process your payment. 💸 The WEPP will pay you for eligible wages earned within the six months leading up to the bankruptcy, up to a legal maximum (which adjusts annually but is typically equivalent to seven weeks of maximum insurable EI earnings, generally over $8,500 CAD).
How Much Does it Cost in New Brunswick?
Recovering your wages through the federal program is designed to be completely free for victims of corporate insolvency. 💵 Here is the financial breakdown.
| Type of Action | Estimated Cost (CAD) | Details |
|---|---|---|
| WEPP Application | $0 (Free) | Applying through Service Canada is free. There are no administration fees for workers. |
| Trustee Fees | $0 | The Trustee is paid out of the bankrupt estate’s assets, not from your WEPP compensation. |
| Legal Consultation | $150 – $350 | Optional. You might consult a lawyer if you are a high-level executive owed massive severance. |
Be aware that WEPP payments are considered taxable income. Service Canada will deduct income tax, CPP contributions, and EI premiums from your final payout before depositing the funds into your bank account.
How Long Does the Process Take?
The timeline relies heavily on you meeting strict application deadlines. ⏳ You have exactly 56 days from the date of the bankruptcy to submit your WEPP application. Once Service Canada has all the necessary information from both you and the Trustee, they legally must make a decision within 35 days. You will typically see the money deposited into your account shortly after approval, meaning the total process usually takes 2 to 3 months.
Frequently Asked Questions (FAQ)
Does the WEPP cover my unpaid severance pay?
Yes. The Wage Earner Protection Program covers unpaid base wages, vacation pay, termination pay, and legal severance pay, provided they fall within the eligible timeframe and the total amount does not exceed the maximum federal cap.
What if my employer just closed and didn’t declare bankruptcy?
If the business simply shut down and abandoned the property without legally filing for bankruptcy or receivership, you cannot immediately use WEPP. You must first file a standard claim with the New Brunswick Employment Standards Branch to legally pursue the corporate directors.
Can I apply for EI while waiting for WEPP?
Absolutely. You should apply for regular Employment Insurance (EI) benefits the moment you lose your job. WEPP and EI are separate programs. However, if WEPP eventually pays you for “termination pay in lieu of notice,” it might temporarily affect your EI schedule.
Are independent contractors eligible for WEPP?
No. WEPP is strictly for traditional employees. If you were working as a freelancer, a supplier, or a true independent contractor, your unpaid invoices make you an unsecured corporate creditor, and you must wait to see if the Trustee recovers enough assets to pay you directly.
What if my claim is larger than the WEPP maximum?
If you are owed $15,000 but the WEPP cap is roughly $8,500, WEPP will only pay you the maximum cap. For the remaining balance, you stay on the Trustee’s list as an unsecured creditor. If the Trustee eventually sells off the company’s assets (like real estate or machinery), you may receive a partial dividend months or years later.
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