Last December, kitchen helpers, wait staff and dim sum chefs at two Regal Chinese restaurants in Scarborough and Richmond Hill learned that their employer was abruptly closing its doors. According to the Metro Toronto Chinese and Southeast Asian Legal Clinic, about 60 workers now find themselves owed a total of $300,000 in unpaid wages, overtime, vacation pay and termination pay.

If the numbered Ontario companies operating the restaurants simply declared bankruptcy or entered receivership, these workers could apply to the federal Wage Earner Protection Program (WEPP). The WEPP pays workers the unpaid wages they are owed — up front, subject to an annual cap. Then the federal government joins the bankruptcy or receivership proceedings as a creditor to recover those monies.

Unfortunately, in the Regal case, it wasn’t quite so simple. Although the controlling director filed for personal bankruptcy in July, the company formally employing Regal workers must file for bankruptcy or become subject to receivership for workers to be eligible for the WEPP.

This case is not uncommon, and highlights one of the shortcomings of the WEPP, which is now undergoing a five-year review. Since coming into effect in 2008, the WEPP has provided a measure of fairness for precarious workers trying to recoup unpaid wages from defaulting employers. According to Industry Canada, more than 60 per cent of bankruptcies in a given year can occur in industries like retail and accommodation and food services, sectors characterized by low-paid, precarious employment, often lacking union protection.

As important as the Wage Earner Protection Program is, however, there are key shortcomings that need addressing.

First and foremost, the ceiling on payments is too low. The maximum WEPP payment, equal to four weeks of maximum insurable earnings under the Employment Insurance Act ($3,738 in 2014), means that too many workers are recovering only a portion of the money owed to them. According to the government’s statistics, the average amount owed is equal to twice the maximum WEPP payment, and the average WEPP payment as a share of the amount owed to workers is falling. The federal government needs to dramatically increase, or even eliminate, the cap on unpaid wages recoverable under the program.

Second, employers commonly walk away from businesses, shut their doors or change names without entering formal restructuring or officially declaring bankruptcy. The government should therefore look at more ways that the WEPP could apply to defaulting employers who have substantially ceased operations, but have not declared bankruptcy. At a minimum, WEPP’s coverage for monies owed should be extended to two years after cease of operations prior to bankruptcy, receivership or commencement of restructuring proceedings.

Finally, there is a close link between employment standards violations of workers while on the job and the wage theft that occurs when employers shut their doors. Low-wage, precarious workers are already at higher risk of wage theft and employment standards violations, including unpaid wages, overtime violations and minimum wage violations. Newcomers and immigrant workers are often paid under the table, making it difficult to prove unpaid wages in the event the employer does go bankrupt.

There is no substitute for strong enforcement of employment standards legislation, with strong measures to deter employers from breaking the rules. But workers would also standards from better integration between the WEPP and provincial employment standards enforcement. Whenever workers file a proof of claim under the WEPP, a file should be opened with the provincial ministry of labour section responsible for administering employment standards.

In 1991, the Ontario government amended the Employment Standards Act to include an employee wage protection program. The provincial program helped workers recover unpaid wages from insolvent and bankrupt employers, but also when employers didn’t pay for other reasons. It’s worth noting that defaulting employers could be ordered to pay a maximum of $5,000, a limit that even in 1991 was well above today’s maximum WEPP payment. We can and should do a lot more for vulnerable workers victimized by unscrupulous employers.

Hassan Yussuff is president of the Canadian Labour Congress.