Every business with Canadian employees must issue a Record of Employment (ROE) to workers who experience an interruption in insurable earnings.
The ROE form plays an important role in applying for employment insurance (EI) benefits. Hence, it is essential that you understand the information required to complete a ROE and know when you’re obliged to provide a Record of Employment to your employees.
This article will guide you through the basics of what you need to know about the ROE as an employer in Canada.
Why Your Business Must Issue a Record of Employment
Service Canada views the ROE form as the single most important document in the EI benefits application process.
Because each Record of Employment details the insurable earnings (broken down by pay period) received by a specific worker while employed by your business, Service Canada relies on your ROE to:
- determine if that employee qualifies for EI benefits, what their benefit rate should be, and how long they’re eligible to receive benefits,
- ensure all eligible employees receive the correct EI benefits, and
- prevent EI benefits from being misused or issued in error
Some of the key items you’ll be required to provide on the Record of Employment include your pay period type (bi-weekly or monthly, for example), your employee’s total insurable hours and total insurable earnings, and the reason for issuing the ROE.
With that in mind, you should take steps to maintain proper employment history records – including social insurance numbers for all employees –to ensure the information on the ROEs you issue is accurate and complete.
What Are Insurable Earnings?
Insurable earnings include most employee payment amounts, as long as they take the form of cash (or cash equivalents like cheques or direct deposits) and the compensation being made is in respect to employment with your business.
Remember: as an employer in Canada, you’re legally obligated to:
- 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 things like vacation pay, sick leave and stat holiday pay, commissions, and bonuses, but the CRA has the final say on what does and doesn’t qualify.
When Must Your Business Issue a Record of Employment
Regardless of whether your employee intends to file a claim for EI benefits or not: you must issue an ROE every time they experience an interruption of insurable earnings - OR any time Service Canada requests one.
What is an Interruption of Earnings?
An interruption of earnings is considered to occur any time your employee has (or is expected to have) 7 consecutive calendar days without work and insurable earnings - or when their salary dips below 60% of their regular weekly earnings for any of the following reasons:
- illness, injury, or quarantine,
- pregnancy or caring for a newborn or recently adopted child, or
- caring for a gravely ill family member
While most situations that trigger the issuance of a ROE are clear-cut (when an employee resigns, is terminated, or goes on maternity leave), others are less common.
You must also issue a ROE, for example, whenever an employee’s paid internship ends, when your business implements a change in payroll frequency, or 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
- 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
ROEs 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 as paper documents, you’ll first need to request the appropriate forms from your Employer Contact Centre.
Paper ROEs consist of three separate but identical copies:
- Part 1 (the original copy) is issued to your employee so 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
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 do so within 5 calendar days after the end of the pay period in which your employee’s interruption of earnings occurs. You should note, however, that if your employee pay cycle is monthly (every 4 weeks), the ROE filing deadline is whichever date comes first:
- 5 calendar days after the end of the pay period 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 5 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
To comply with Service Canada’s regulations, it is your responsibility as an employer to issue ROEs correctly and on time. Like most payroll chores, however, meeting your Record of Employment obligations consistently can mean taking time away from more lucrative pursuits.
At Enkel, we help you manage your payroll process using cloud-based software that is designed to, among other things, take care of ROE duties for you.
With our payroll management services, we can generate complete and accurate employee ROEs as they’re required, submit them to Service Canada on your behalf, allowing you to get back to running your business.