In Canada, employers are expected to issue the ROE within five days after the employee’s last day of work, regardless of the reason why the employee left (i.e. termination, resignation, etc.). Delaying the delivery of a Record of Employment (“ROE”) causes an employee an avoidable waiting period in receiving employment insurance benefits (“EI”). If the employee is eligible for EI, but has short service, and therefore minimal entitlement to notice of termination, the employee may suffer unnecessary financial difficulty.

What is a Record of Employment?

The Record of Employment, according to Service Canada, “is the single most important document in establishing an Employment Insurance (EI) claim.

Since 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. They also use the ROE to ensure all eligible employees receive the correct EI benefits and also prevent EI benefits from being misused or issued in error.

As an employer, you are expected to complete a Record of Employment form for any employee within five days, a week after their employment was terminated. For example, if an employee is terminated on Monday, January 1, and the employee is not working beyond that date (severance packages don’t count for this purpose), then the employer is expected to issue the ROE within five days after January 8.

Legally, an employer who fails to deliver a timely ROE may be liable for nominal “inconvenience damages” and other fines. Employers are liable for two kinds of penalties for failing to provide an ROE on time. First, employers may be fined by the federal government up to $2,000 or imprisoned for up to six months, or both. Second, employers may be liable to the employee for damages for the inconvenience they caused.

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. Owing to that, it is advisable you take steps to maintain proper employment history records – including social insurance numbers for all employees –to ensure the information on the ROEs you issue are accurate and complete.

How to Issue a Record of Employment

Have it in mind that 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.

  1. Submitting a ROE Online

Service Canada provides a handful of 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

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).

  1. Submitting a Paper ROE

Notably, if you prefer to complete, issue, and submit ROEs as paper documents, you’ll first have 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

Special Situations to issue ROEs in Canada

Irrespective of whether your employee intends to file a claim for EI benefits or not: you are expected to issue an ROE every time they experience an interruption of insurable earnings – OR any time Service Canada requests one. Here are few situations where it is necessary that you do:

  1. When Service Canada requests an ROE

Indeed the most common situation for Service Canada to request you issue an ROE occurs when an employee is working two jobs and experiences an interruption of earnings in one of them. If this happens and the employee submits an application for EI benefits, Service Canada will need an ROE from the current employer, even though the employee is still working there. They use the information on both ROEs to calculate the benefit amount and the number of weeks of EI benefits the claimant should receive.

  1. During self-funded leave

In some workplaces, employees can have an agreement with their employer to take self-funded leave. Under this agreement, employees work and defer a portion of their salary for a certain period of time to finance a later period of leave. For instance, an employee may work for three years, deferring 20% of his or her salary during those three years to finance leave during the fourth year.

During self-funded leave, an interruption of earnings may not occur, however, you do not have to complete an ROE unless either party breaks the agreement. If the agreement is broken by either party during the self-funded leave and the employee will not be returning to work, you are expected to then issue an ROE.

  1. When there is a change in ownership

When a business changes ownership, the former employer usually has to issue ROEs to all employees. However, if the following two conditions apply, you do not have to issue ROEs:

  • There has been no actual break in the employee receiving earnings during the change-over; and
  • The former employer’s payroll records are available to the new employer, and the new employer concurs to issue a single ROE that covers both periods of employment if the need arises.
  1. When an employee stays with the employer but is transferred to another Canada Revenue Agency Payroll Account Number

If, for instance, you have more than one Payroll Account Number and an employee’s payroll file is transferred to a different Payroll Account Number within the organization, an ROE is not required if:

  • There has been no actual break in the employee receiving earnings during the transfer; and
  • You concur to issue a single ROE that covers both periods of employment if the need arises.
  1. For part-time, on-call, or casual workers

Note that you do not have to issue an ROE every time a part-time, on-call, or casual worker experiences an interruption of earnings of seven days or more. However, you are expected to issue one when:

  • An employee requests an ROE and an interruption of earnings has occurred;
  • An employee is no longer on the employer’s active employment list;
  • Service Canada requests an ROE; or
  • An employee has not done any work or earned any insurable earnings for 30 days.
  1. For wage-loss insurance (WLI) plan payments

When you offer your employees a wage-loss insurance (WLI) plan:

  • If the plan payments are not insurable, issue an ROE when the interruption of earnings occurs; or
  • If the plan payments are insurable, issue an ROE when the interruption of earnings occur, and issue a second ROE for the period of the insurable WLI payments, after they stop.
  1. When the pay period type changes

Also, when your business or organization changes its pay period type, you are expected to issue ROEs for all employees, even though the employees are not experiencing an interruption of earnings.

  1. When an employer declares bankruptcy

Note that when an employer declares bankruptcy and a receiver takes over the operation of the business, the employer usually has to issue ROEs to all employees. However, if the following two conditions apply, you do not have to issue ROEs:

  • There has been no actual break in the employee receiving earnings during the change-over; and
  • The employer’s payroll records are available to the receiver, and the receiver agrees to issue a single ROE that covers both periods of employment if the need arises.

Conclusion

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.

But as a Canadian employer, you will have to complete an ROE for the employee – whether he or she is thinking of applying for Employment Insurance benefits or not. How soon you file the ROE with Service Canada depends on whether you are filing a paper ROE or sending it electronically.

Ajaero Tony Martins