Every business with Canadian employees must issue a Record of Employment (ROE). They must issue it when a worker has a break in insurable earnings. The ROE is a critical document in Canada's employment landscape. Service Canada uses it to determine an individual's eligibility for Employment Insurance (EI) benefits. Employers are legally required to issue an ROE whenever an employee's earnings are interrupted.
This form is essential when Canadian workers apply for employment insurance (EI) benefits. Employers need to understand what information is required to complete an ROE and when they must issue one. These legal requirements apply to all businesses with employees in Canada.
We guide you through what you need to know about the ROE as an employer in Canada.
What is a Record of Employment (ROE form)?
The ROE form is an official form that employers must complete and provide to employees. It applies when employees experience an interruption of earnings and provides a Service Canada form with a detailed record of the employee’s work history with that employer. It includes insurable earnings and hours. Service Canada uses this information to determine:
- Eligibility for EI Benefits: Whether the employee qualifies for EI benefits.
- Benefit Amount: How much the employee is entitled to receive.
- Benefits Duration: How long the employee can receive EI benefits.
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Why Your Business Must Issue a ROE
Service Canada views the form as the most important document when applying for EI benefits.
Because each Record of Employment lists a worker’s insurable earnings for each pay period. Service Canada uses your document to:
- Determine if the employee qualifies for benefits, their benefit rate, and how long they can receive benefits
- Ensure all eligible employees receive the correct benefits and
- Ensure EI benefits are issued correctly and not misused
Some key items you must provide on the Employment Record include your pay period type, such as bi-weekly or monthly. You must also include your employee’s total insurable hours and total insurable earnings. You must also state the reason for issuing the ROE.
With that in mind, you should keep proper employment history records, including Social Insurance Numbers for all employees. This helps ensure the ROE form information you issue is accurate and complete.
What Are Insurable Earnings?
Insurable earnings include most types of employee pay. Employers must pay these amounts in cash or cash equivalents, such as cheques or direct deposits, and they must relate directly to work performed.
As an employer in Canada, you must:
- Deduct EI premiums from all insurable earnings you pay to employees and
- Remit those premiums regularly to the Canada Revenue Agency (CRA)
Insurable earnings usually include vacation pay, sick leave, and statutory holiday pay. They also include commissions and bonuses. The CRA has the final say on what qualifies.
When Must You Issue a Record of Employment
Regardless of whether your employee plans to file a claim for EI benefits, you must issue an ROE. Do this each time they have an interruption of insurable earnings. Also, issue one if Service Canada Form requests it.
An ROE must be issued when an employee experiences an interruption of earnings, resulting from:
- Layoff or Termination: The employee's employment ends or they are laid off.
- Injury or Illness: The employee stops working due to sickness, injury, or quarantine.
- Leave of Absence: The employee takes maternity, parental, compassionate care, or family caregiver leave.
- Reduction in Earnings: The employee’s weekly earnings drop below 60% of their usual weekly earnings. This may happen due to illness, injury, or other reasons.
What is an Interruption of Earnings?
An interruption of earnings occurs when your employee has 7 consecutive calendar days without work. It can also happen when you expect your employee to have seven straight calendar days without work. It also occurs when their salary drops below 60% of their regular weekly earnings.
While most cases that require an ROE are clear-cut, some are less common. Clear cases include when an employee resigns, is fired, or takes maternity leave.
You must also issue an ROE. For example, do this when an employee’s paid internship ends. Also, do this when your business changes payroll frequency. Do this as well when you switch payroll service providers.
How to Issue a Record of Employment
You have two choices when it comes to issuing ROEs. You can submit your employee’s ROE form using your Service Canada account online or as a paper document. Let’s take a brief look at the process for each method.
Submitting a ROE Online
Service Canada provides several options for submitting your ROEs electronically. If you perform your own payroll, you can take advantage of ROE Web online by either:
- using a compatible software program to upload ROE data directly from your payroll system or
- manually entering your ROE data online at the Service Canada website
You can also be submitted on your company’s behalf by a payroll service provider using bulk transfer technology known as SAT (Secure Automated Transfer).
Submitting a Paper ROE
If you prefer to complete, issue, and submit ROEs on paper, request the correct forms first. Contact your Employer Contact Centre.
Paper ROEs consist of three separate but identical copies:
- Part 1 (the original copy) is given to your employees. They can submit it to Service Canada when they apply for EI benefits
- Part 2 (the blue copy) is submitted to Service Canada, and
- Part 3 should be kept by your business and filed with your employment records
Information in an ROE
Includes several critical pieces of information:
Employee Information
- Social Insurance Number (SIN)
- Name and contact details
- Occupation
Employer Information
- Business name and address
- CRA Business Number
Employment Details
- First and last day of work
- Total insurable hours
- Total insurable earnings
- Pay period type (weekly, bi-weekly, semi-monthly, etc.)
Reason for Issuing
- Codes indicating the reason for interruption (e.g., layoff, dismissal, illness)
Earnings and Deductions
- Detailed breakdown of insurable earnings during each pay period
- Vacation pay, severance, or other monies paid on separation
ROE Reason Codes
- A - Shortage of Work: Layoffs are due to a lack of work or the end of the contract.
- B - Strike or Lockout: Work stoppage due to labour disputes.
- C - Return to school: Service Canada is phasing out the use of this code. Use Code E or J instead.
- D - Illness or Injury: Employee is unable to work due to health reasons.
- E - Quit: Voluntary resignation.
- F - Maternity: Leave related to pregnancy.
- G - Retirement: Employee retires.
- H - Work Sharing: Reduction in work hours under a work-sharing agreement.
- K - Other: Any reason not covered by other codes (requires explanation).
- M - Dismissal: Termination due to employee's conduct.
- N - Leave of Absence: Approved time off for various reasons.
Record of Employment Filing Deadlines
The deadline for filing a Record of Employment with Service Canada varies depending on whether you opt for the electronic or paper version of the form.
If you choose to file an electronic ROE, you must file it within five calendar days. Do this after the pay period ends. This is the pay period when your employee’s interruption of earnings occurs. You should note, however, that if your employee pay cycle is monthly (every four weeks), the ROE filing deadline is whichever date comes first:
- Five calendar days after the pay period ends, in which your employee’s interruption of earnings occurs, or
- 15 calendar days after the 1st day of their interruption in earnings
When filing a paper ROE, meanwhile, you must do so within five calendar days of:
- the 1st day of your employee’s interruption in earnings or
- the day on which you first became aware of the interruption
Employer Obligations and Compliance
To follow Service Canada rules, you must issue ROEs correctly and on time. Like most payroll tasks, meeting your Record of Employment obligations can take time away from more profitable work.
- Accuracy: Employers must ensure all information on the ROE is accurate and complete.
- Timeliness: Adhering to the five-day deadline is crucial to avoid penalties.
- Record-Keeping: Employers should keep copies of all ROEs issued for at least six years.
- Confidentiality: Protect employee personal information in compliance with privacy laws.
Failure to issue an ROE accurately and on time can result in:
- Fines: Monetary penalties imposed by Service Canada.
- Legal Action: Potential lawsuits from affected employees.
- Reputation Damage: Negative impact on employer branding and employee relations.
Final Thoughts
At Enkel, we help you manage your payroll process with cloud-based software. It is designed to handle ROE duties for you.
With our payroll management services, we create complete and accurate employee ROEs as required. We submit them to Service Canada on your behalf. This lets you get back to running your business.
Frequently Asked Questions (FAQ)
Here are answers to some of the most common questions employers ask about ROEs in Canada
What is a Record of Employment (ROE)?
A Record of Employment (ROE) is a form employers submit to Service Canada when an employee experiences an interruption in earnings. It provides details about insurable hours and earnings, which Service Canada uses to determine eligibility for Employment Insurance (EI) benefits.
When do employers need to issue an ROE in Canada?
Employers must issue an ROE whenever an employee has an interruption in earnings, such as a layoff, termination, leave of absence, or significant reduction in pay. This requirement applies across Canada, including Ontario, even if the employee does not plan to apply for EI.
What is a Service Canada ROE?
A Service Canada ROE refers to the official Record of Employment submitted to Service Canada. The agency uses this document to assess EI claims, calculate benefit amounts, and determine how long an individual can receive benefits.
Is an ROE required in Ontario?
Yes. ROE requirements are federal and apply in all provinces, including Ontario. Employers in Ontario must follow the same Service Canada rules and deadlines when issuing a Record of Employment.
What information is included in an ROE?
An ROE includes key details such as the employee’s Social Insurance Number (SIN), total insurable earnings, insurable hours, pay period type, and the reason for the interruption of earnings. This information helps Service Canada process EI claims accurately.
What are insurable earnings in Canada?
Insurable earnings include most types of employee compensation, such as wages, vacation pay, bonuses, and commissions. Employers must deduct EI premiums from these earnings and remit them to the Canada Revenue Agency (CRA).
How long do employers have to issue an ROE?
For electronic submissions, employers must issue an ROE within five calendar days after the end of the pay period in which the interruption occurs. For paper ROEs, the deadline is within five days of the interruption of earnings.
