Insurable hours (EI)

A buyer meets insurable hours when taking over payroll on closing day, because the seller’s records of employment report them and a former employee’s claim can turn on them.

How the hours are counted

Section 55(1) of the Employment Insurance Act lets the Commission, with the approval of the Governor in Council, make regulations for establishing how many hours of insurable employment a person has, including deeming hours for people not paid hourly. Under s.7(2), an insured person qualifies for benefits if they had an interruption of earnings and enough hours of insurable employment in their qualifying period, by reference to the regional rate of unemployment, subject to s.7(6) and to the increase for violations in s.7.1. Service Canada’s employer guide says to enter total insurable hours and total insurable earnings on the record of employment, and to include statutory holiday hours where statutory holiday pay was received, unless the holiday occurred after the last day for which the employee was paid; in that case, whether to include them depends on whether the departure is final.

What to ask

• Whether records of employment were issued for staff who left before closing.
• Whether the hours reported match the payroll records.
• How hours were counted for salaried staff.

See how to handle payroll on closing day and the entries on insurable earnings and the record of employment.