Which factor primarily determines whether earnings are insurable for Employment Insurance purposes?

The insurability of an employee's earnings for Employment Insurance (EI) purposes is determined by the nature of their employment as defined by the Employment Insurance Act. The primary factor is whether the contract of service between the employer and the employee constitutes "insurable employment." If the employment is deemed insurable, then the earnings derived from it are generally insurable, and EI premiums must be deducted, unless a specific legislative exception applies.

A. An employee's marital status is used for determining tax credits on the TD1 form but has no bearing on the insurability of their employment for EI.

C. Vacation entitlement is a condition of employment, and vacation pay is considered insurable earnings, but the entitlement itself does not determine the insurability of the employment.

D. A company's annual revenue is irrelevant to determining whether an individual employee's job is considered insurable employment under the EI legislation.

1. Canada Revenue Agency. (2023). T4001 Employers' Guide - Payroll Deductions and Remittances. Chapter 3, EI premiums. "You have to deduct EI premiums from your employees' insurable earnings if they are in insurable employment."

2. Government of Canada. Employment Insurance Act (S.C. 1996, c. 23). Part I, Section 5, Insurable Employment. This legislation is the primary source defining what constitutes insurable employment.