Do You Have a Family Member Working for You?

When you are hiring employees, and one of those employees is your family member, did you know they may not qualify for Employment Insurance (EI) benefits?

CRA has imposed a rule where employees who are related to their employer might not be in an insurable employment situation. This means that they would not be able to get EI benefits and, so, would not have EI premiums deducted from their pay.

There are several ways employees are considered to be related to the employer. They can be related (source):

  • by a blood relationship
  • by marriage
  • by common-law partnership
  • by adoption
  • where the employer is a corporation, the employee is considered related to the corporation when they are related to a person who either controls the corporation or is a member of a group that controls the corporation

You must apply for a ruling in order to find out for sure if this family member qualifies. If you are planning to hire an employee, you normally do a job description, correct? Well, do the same thing for your family member. As long as you are reasonable with your expectations and pay a normal wage, there is a good chance you can overturn this ruling. You can apply for this ruling through your online My CRA Business Account.

Don’t be caught having to repay benefits or applying and then being refused!