Is your company paying too much EI? Many family-run companies fail to realize family members working in the business are usually not eligible to collect Employment Insurance if they’re laid off for any reason, including shortage of work. That means neither the company nor the employee should be paying EI premiums.
Premiums can cost the employee and employer more than $2,000 each year. For example, in 2012 employers will pay $1,176 for each insurable employee who earns about $46,000 or more and the employees will each pay $840.
However, there is a saving grace: Employers and employees who have overpaid may be able to claim refunds going back three years. One family-owned company, KPMG works with has employed about 20 members of the owners’ extended family for the past three years. The company and the employees recently received a refund of more than $100,000 for EI premiums paid during that time.
The rules are intended to prevent abuse of the EI system by stopping employers from creating artificial employment situations for family members.