What is a Record of Employment (ROE)?

This is the most important document in the administration of Employment Insurance benefits (EI), as Service Canada uses the information provided in the ROE to determine an employee's eligibility, benefit amount, and duration of EI claims. EI benefits are paid from a fund created from premiums contributed directly by employers and employees.

For employers, accurate and timely completion of ROEs is not just a legal obligation but also a responsibility that directly impacts their employees' financial security during periods of unemployment or underemployment and prevents potential misuse of EI benefits.

When is an ROE required?

An ROE must be issued whenever there is an interruption of earnings for an employee. This concept is central to understanding when an employer needs to complete and submit an ROE.

What is considered an "interruption of earnings"?

An interruption of earnings occurs when an employee stops earning insurable income from their employer. This can happen for various reasons, whether temporary or permanent. The key factor is that the employee is no longer receiving regular wages from the employer for a period of time.

Another situation considered an interruption of earnings involves a reduction in employee's salary to less than 60% of their regular weekly earnings due to illness, injury, quarantine, pregnancy, parental leave, or caregiving for a family member in need.

What is the seven-day rule?

The primary criterion for an interruption of earnings is known as the seven-day rule. This rule states that an interruption of earnings occurs when an employee has or is anticipated to have seven consecutive calendar days with no work and no insurable earnings from the employer. This period is also sometimes referred to as the "interruption of work" period.

When applying the 7-day rule, it's important to note how the timing is calculated. The first day of the interruption of earnings is not necessarily the same as the employee's last day of work. Instead, for record-keeping and reporting purposes, the first day of the interruption of earnings is considered to be the final day for which the employee received payment.

This distinction is critical for accurate documentation and can have implications for various employment-related processes and benefits.

Here are some common scenarios requiring an ROE:

1. Layoffs: When an employee is temporarily or permanently laid off.
2. Terminations: If an employee's employment is ended, whether voluntarily (resignation) or involuntarily (firing).
3. Leaves of absence: This includes maternity or parental leave, sick leave, or other extended absences.
4. Significant reduction in work hours: If an employee's weekly earnings drop by more than 40% for at least seven consecutive days.
5. Change in payroll frequency: For instance, moving from weekly to bi-weekly pay periods.
6. Changes in employment status: Such as moving from full-time to part-time work.
7. Work sharing programs: When employees agree to reduce their hours to avoid layoffs.
8. Seasonal work endings: For businesses with cyclical periods of activity and inactivity.
9. Retirement: When an employee leaves the workforce permanently.
10. Transfer to another company division or change in payroll: Even if the employee continues working, a change in the payroll structure might require an ROE.

Employers must issue an ROE even if the employee doesn't intend to claim EI benefits. The requirement is based on the interruption of earnings, not on the employee's plans regarding EI claims.

In some cases, an ROE might be required even if the seven-day rule isn't met. For example, if Service Canada specifically requests an ROE for an employee, the employer must comply regardless of the duration of the earnings interruption.

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Key information included in an ROE

A Record of Employment contains crucial data that Service Canada uses to determine an employee's eligibility for Employment Insurance (EI) benefits. The form is designed to provide a detailed snapshot of the employee's work history and earnings with the employer. Here's a breakdown of the essential information included in an ROE:

Employer details

This section includes the employer's business name, address, and Canada Revenue Agency (CRA) Business Number. The Business Number is particularly important as it helps Service Canada identify the employer and verify the information provided. For employers with multiple payroll accounts, the specific Payroll Account Number (PAN) must also be included.

Employee information

The ROE must contain accurate personal information about the employee, including:

• Full legal name
• Social Insurance Number (SIN)
• Address and postal code
• Period of employment (first and last day worked)
• Final pay period end date

This information is crucial for identifying the employee and ensuring that the ROE is correctly associated with their EI account.

Employment history

The ROE provides a summary of the employee's work history with the employer. This includes:

• The date of hire
• The last day for which paid (which may differ from the last day worked)
• Details about any statutory holidays, vacations, or other paid leave during the final pay period

This information helps Service Canada understand the context of the employment and any recent changes that might affect EI eligibility.

Insurable earnings and hours

One of the most critical sections of the ROE, this part details the employee's insurable earnings and hours for the last 53 weeks of employment or since the last ROE was issued, whichever is shorter. This includes:

• Total insurable earnings
• Insurable hours worked
• Details of any special payments or allowances (bonuses, overtime pay, vacation pay)

The accuracy of this information is paramount, as it directly impacts the calculation of EI benefits.

Reason for issuing the ROE

Employers must provide a specific reason for issuing the ROE, chosen from a predefined list of codes. These codes include:

• A (Shortage of work)
• D (Illness or injury)
• E (Quit)
• F (Maternity leave)
• G (Retirement)
• M (Dismissal)
• And several others for various scenarios

The reason this is crucial is because it can affect the employee's eligibility for EI benefits and the processing of their claim.

Additional comments

The ROE also includes a section for additional comments where employers can provide any relevant information that doesn't fit into the standard fields. This might include explanations for unusual circumstances or clarifications about the employment situation.

Certification

The ROE must be certified by an authorized person from the company, typically someone from payroll or human resources. This certification attests to the accuracy of the information provided.

How to complete and submit an ROE

Employers in Canada have multiple options for completing and submitting Records of Employment. The method chosen often depends on the size of the business, the frequency of ROE issuance, and the employer's technological capabilities. Here's a detailed look at the available methods:

Paper ROE process

While less common today, the paper ROE process is still an option, particularly for small businesses or those with infrequent ROE needs.

1. Obtaining paper forms:
• Employers can order paper ROE forms by contacting the Government of Canada Employer Contact Centre at 1-800-367-5693
• Forms are provided in triplicate (three copies)
2. Completing the form:
• All sections must be filled out manually, using blue or black ink
• Accuracy is crucial, as errors can delay processing
3. Distribution of copies:
• The top copy (Part 1) is given to the employee
• The middle copy (Part 2) is sent to Service Canada within five calendar days of the interruption of earnings or the employee's departure
• The bottom copy (Part 3) is retained by the employer for their records
4. Submission:
• The employer's copy must be mailed to the appropriate Service Canada office based on the employer's location

While the paper process is straightforward, it's more time-consuming and prone to errors compared to electronic methods.

Electronic ROE options

Electronic submission is the preferred method for most employers because of its efficiency and lower chances of making a mistake. There are three main electronic options:

ROE Web

Employers can create an account at the Government of Canada website and then manually complete ROEs by entering the required information into the Service Canada website. The system provides validation checks to help ensure accuracy.

Once submitted, the ROE is instantly available to Service Canada, and employees can access their ROEs through their My Service Canada Account.

Payroll software

Many payroll software packages are compatible with ROE Web and allow employers to create and submit ROEs directly through their payroll software. The software typically pulls relevant information from the payroll records, reducing manual data entry. Once approved, the ROE is electronically submitted to Service Canada.

Payroll service providers

Some businesses use external payroll services—they can often have their provider handle ROE submissions. The payroll service completes the ROE based on the payroll information they manage and submit it through a secure automated transfer (SAT) system. Employers should ensure their payroll provider is aware of any specific circumstances or additional information needed for accurate ROE completion.

When submitting ROEs electronically, keep in mind the following:

• Electronic ROEs must be submitted within five calendar days after the end of the pay period in which an employee's interruption of earnings occurs
• With electronic submissions, employers don't need to provide a paper copy to employees, as employees can access their electronic ROEs through their My Service Canada Account
• If corrections are needed after submission, employers can amend ROEs electronically through the same system they used for the original submission
• Even with electronic submissions, employers should maintain records of ROE information for 6 years

Choosing the right submission method

The choice between paper and electronic submission (and which electronic method to use) depends on several factors:

• Business size and ROE frequency
• Technological capabilities
• Integration with existing payroll systems
• Desire for efficiency and error reduction

For most employers, electronic submission through ROE Web or integrated payroll software offers the most efficient and accurate method for managing ROEs. However, the paper option remains available for those who prefer it or have limited electronic capabilities.

As an employer in Canada, managing Records of Employment (ROEs) is a crucial responsibility that requires attention to detail and timely action. Understanding and adhering to the specific requirements helps ensure compliance with federal regulations and supports employees during transitions.

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Timeframes for issuing ROEs

The timing of ROE issuance is critical and varies depending on the submission method:

1. Paper ROEs:
• Must be issued within 5 calendar days of the first day of an interruption of earnings, or the day the employer becomes aware of the interruption
• The employee's copy (Part 1) must be provided to the employee
• Service Canada's copy (Part 2) must be sent within the same 5-day window
2. Electronic ROEs:
• Must be submitted within 5 calendar days after the end of the pay period in which the employee experienced an interruption of earnings
• No paper copy is required for the employee, as they can access it through their My Service Canada Account

ROE record-keeping requirements

Proper record-keeping is essential for compliance and potential audits. The required retention period is 6 years from the date of ROE issue. Records to maintain include:

• Copies of all issued ROEs (paper or electronic)
• Detailed payroll records related to:
• Insurable hours worked
• Earnings (including break down of regular pay, overtime, bonuses, etc.)
• Reasons for employment separations or interruptions
• Any special payments made upon or after separation
• Documentation supporting the reason for issuing the ROE (resignation letters, termination notices)

Employers should ensure these records are easily accessible and organized, as Service Canada may request them for verification purposes.

Best practices to maintain ROE compliance

Ensuring compliance with Record of Employment (ROE) regulations is crucial for employers hiring workers in Canada. This is how you can achieve it:

• Implement robust payroll systems: Invest in payroll software that integrates ROE generation and accurately calculates insurable earnings and hours. Choose a platform that can easily be updated with regulatory changes.
• Provide training on ROE requirements and procedures: Include payroll staff, HR personnel, and managers in training sessions and offer regular refresher courses to keep staff up-to-date.
• Establish internal deadlines: Set deadlines earlier than the official 5-day requirement to allow time for thorough review and potential corrections. Create alerts or reminders to ensure deadlines are met.
• Stay informed about regulatory changes: Subscribe to Service Canada updates and notifications and assign a team member to monitor and communicate regulatory changes.
• Leverage technology for efficiency: Use electronic ROE submission whenever possible and automate reminders for ROE deadlines and follow-ups.

Record of Employment Canada FAQs

What are the consequences of non-compliance with ROE obligations?

Non-compliance with ROE obligations can lead to a range of serious repercussions for employers. These include legal and financial penalties such as fines and potential legal action, as well as negative impacts on employees like delayed EI claims processing. Additionally, employers may face increased scrutiny from Service Canada, reputational damage, and operational disruptions, all of which can strain resources and hinder business operations.

What are some special circumstances related to ROE?

Non-standard work schedules, such as those involving shifts or irregular hours, may require special consideration when determining interruptions of earnings. Changes in business ownership can affect how ROEs are issued, particularly if employees transition to a new employer. Foreign employers with Canadian employees must adhere to specific guidelines for ROE reporting, ensuring compliance with Canadian employment regulations while operating across borders.

Are there exceptions to what’s considered an interruption of earnings?

Certain professions and work arrangements are exempt from the standard interruption of earnings criteria, including real estate agents and commission-paid salespeople. Additionally, workers with non-traditional schedules, such as those in firefighting or healthcare, may have different rules applied to their employment interruptions due to the unique nature of their work patterns.

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