Understanding the Record of Employment (ROE) in Canada

Introduction

The Record of Employment (ROE) is a crucial document in the Canadian employment landscape, serving as a formal record of an individual’s employment history with a specific employer. When an employee experiences an interruption in earnings, such as termination, resignation, or extended leave, their employer is legally obligated to provide an ROE. This document plays a vital role in determining eligibility for Employment Insurance (EI) benefits, making it a key piece in the financial safety net for Canadian workers.

For employers, the ROE is more than just a bureaucratic requirement; it’s a testament to their compliance with federal employment regulations. It serves as an official record that outlines the history of an employee’s earnings and the reason for their earnings interruption. By accurately completing and issuing the ROE, employers fulfill their legal obligations and contribute to the smooth functioning of Canada’s employment insurance system.

For employees, the ROE is an essential document for accessing EI benefits during periods without work. It provides Service Canada with the necessary information to assess their claim for EI benefits, such as the reason for leaving their job and the number of insurable hours worked. This makes the ROE a critical document for employees transitioning between jobs or those needing financial support during periods of unemployment or leave.

What is a Record of Employment (ROE)?

The Record of Employment (ROE) is an official document issued by employers in Canada to verify an employee’s work history with their organization. This document is crucial for employees who have experienced an interruption of earnings, as it provides key information required to determine their eligibility for Employment Insurance (EI) benefits.

Definition and Purpose

The ROE serves multiple vital functions in the Canadian employment system:

Employment History Verification: It details the employee’s work history, including the period of employment, earnings during that period, and the reasons for the interruption in earnings.

Eligibility for EI Benefits: The information in the ROE is used by Service Canada to assess an employee’s eligibility for EI benefits. These benefits provide financial assistance during periods of unemployment due to various reasons like layoffs, health issues, or need for parental leave.

Record Keeping: For employers, the ROE is an essential record-keeping tool that demonstrates compliance with employment and labor laws in Canada.

Automate the Process: Implement software that automatically generates ROEs when payroll is processed. This can save time and reduce errors.

Government Requirements

In Canada, it is a legal requirement for employers to issue a Record of Employment under the following circumstances:

When an employee has an interruption of earnings, which is defined as seven consecutive days without work and without pay, or when an employee’s salary falls below 60% of regular weekly earnings due to illness, injury, quarantine, pregnancy, the need to care for a newborn or a child placed for the purposes of adoption, or any other similar situation.
In specific cases like resignation, termination, or layoff.

The timely issuance of an ROE is not just a courtesy but a legal obligation for Canadian employers. The Canadian government mandates the provision of this document to ensure that employees have the necessary support during times of need, reinforcing the safety net provided by the employment insurance system.

By fulfilling this requirement, employers play a crucial role in the seamless operation of the EI program, enabling their former employees to access financial support in a timely manner. For employees, the ROE is more than just a formality; it’s a vital document that can provide financial stability during transitional or challenging periods in their careers.

Issuing an ROE: When and Why

The Record of Employment (ROE) is an essential document in the Canadian workforce, mandated by the government to be issued by employers under certain circumstances. Understanding when and why an ROE must be issued is crucial for both employers and employees to ensure compliance with employment laws and to facilitate access to Employment Insurance (EI) benefits.

Circumstances for Issuing an ROE

The requirement to issue an ROE is triggered under several specific conditions:

Interruption of Earnings: The most common scenario for issuing an ROE is when an employee experiences an interruption of earnings. This occurs when an employee has not worked or earned wages for seven consecutive days or when their earnings drop to less than 60% of their regular weekly earnings due to various reasons.
Layoffs: In cases of layoffs, whether temporary or permanent, employers are required to issue an ROE. Layoffs could be due to seasonal work, business downturns, or restructuring.
Resignation: When an employee voluntarily leaves their job, an ROE must be provided. This enables the employee to establish a record with Service Canada, which could be relevant for future EI claims or job searches.
Termination: Employers are required to issue an ROE upon termination of employment, regardless of the reason for termination.
Extended Leave: If an employee takes an extended leave of absence, such as maternity leave, parental leave, compassionate care leave, or medical leave, an ROE is necessary. It helps in processing EI benefits relevant to the leave being taken.
Employer Bankruptcy or Receivership: In the unfortunate event of employer bankruptcy or receivership, ROEs must be issued to all employees affected by the closure or change in business status.

Importance of the ROE in Different Scenarios

Extended Leave: In cases like maternity or parental leave, the ROE helps in determining the employee’s eligibility for EI parental or maternity benefits.
Layoffs: For layoffs due to a shortage of work or end of a season or contract, the ROE is critical for employees to claim EI benefits while they are out of work.
Illness or Injury: If an employee must leave work due to illness or injury, the ROE allows them to apply for EI sickness benefits.
Resignation or Termination: While employees who resign might not always be eligible for EI benefits, having an ROE can be beneficial for future employment and EI claims. In cases of termination, the ROE helps Service Canada determine the employee’s eligibility for EI benefits.

Step-by-Step Guide to Generating an ROE

Creating a Record of Employment (ROE) is a critical process for employers in Canada. This step-by-step guide outlines how to generate an ROE using a typical employer’s payroll or human resources system. While specific systems may have their unique interfaces, the general process remains consistent across most platforms.

Digital Storage: Utilize secure digital storage solutions for keeping copies of issued ROEs, making them easily accessible for future reference.

Step 1: Navigating to the ROE Section

Log into the System: Begin by logging into your payroll or HR management system with your employer credentials.
Access the Main Menu: Once logged in, locate the main menu which is typically found on the home screen or top navigation bar.
Find the ROE Section: In the main menu, look for a section or tab labeled ‘Employee,’ ‘Payroll,’ ‘Benefits,’ or something similar. Under this, find the option for ‘Record of Employment’ or ‘ROE’. This section is dedicated to creating and managing ROEs.

Step 2: Filling in the ROE and Form Setup Tabs

Selecting an Employee: In the ROE section, you may need to select an employee from a list or search for them by name or employee ID. Once selected, choose the option to create a new ROE.
Entering Details in the ROE Tab:
- Fill in the required fields such as employee information, last day worked, reason for issuing the ROE (e.g., shortage of work, resignation), total insurable hours, and earnings.
- Each field should be completed accurately to ensure compliance and correctness of the document.
Completing the Form Setup Tab:
- Here, you’ll input more specific details such as insurable earnings, vacation pay, and other relevant financial information.
- This tab might also require you to select certain policies or conditions that apply to the employee’s situation.

Step 3: Saving or Discarding Changes

Reviewing the Information: Before finalizing, carefully review all the information entered to ensure accuracy. Errors in the ROE can lead to complications for the employee in obtaining EI benefits.
Saving the ROE: If all the information is correct, click the ‘Save’ button to save your changes. This action typically generates the ROE which can then be submitted to Service Canada.
Discarding Changes: If you need to discard the changes made, perhaps due to an error or a change in circumstance, use the ‘Cancel’ option. This will typically discard any unsaved changes and may prompt you to confirm the action.

Finalizing and Submitting the ROE

After saving the ROE, it is important to follow the proper procedure for submitting it to Service Canada, either electronically through the ROE Web service or as a printed document, depending on your organization’s setup. Ensuring the timely and accurate submission of the ROE is crucial for your employees to access their EI benefits without delay.

Employee Self-Service Portals: Use employee self-service portals where employees can access their ROEs and other employment documents, enhancing transparency and accessibility.

Submission Process of the ROE

Once a Record of Employment (ROE) is generated, the next crucial step is its submission to Service Canada. This process varies slightly depending on whether you are a full-service payroll customer or managing the payroll independently. Understanding these differences is key to ensuring a smooth and compliant submission process.

For Full-Service Payroll Customers

Automated Submission: If you are using a full-service payroll provider, the submission of the ROE to Service Canada is typically automated. Once the ROE is completed and saved in the system, the payroll service provider takes care of electronically submitting it directly to Service Canada.

Confirmation of Submission: Users usually receive a confirmation message or notification within their payroll system, indicating that the ROE has been successfully submitted to Service Canada. This confirmation is crucial for record-keeping and ensuring compliance.

For Non-Full-Service Payroll Customers

Manual Submission via eFile: If you are not using a full-service payroll provider, the process requires a few more steps. After generating and saving the ROE in your system, you will need to submit it electronically using the eFile system.
Downloading the XML File: The ROE data needs to be downloaded as an XML file from your payroll system. This file format is specifically used for submitting ROEs electronically to Service Canada.
Logging into Service Canada’s ROE Web: Visit the Service Canada website and log into the ROE Web portal. This is a secure platform for the submission of electronic ROEs.
Uploading the XML File: Once logged in, navigate to the appropriate section for ROE submission and upload the XML file you downloaded from your payroll system.
Final Submission and Confirmation: After uploading the file, follow the prompts to submit the ROE to Service Canada. Upon successful submission, you will receive a confirmation, which should be saved for your records.

Use Data Analytics: Employ data analytics to monitor and review ROE-related trends, such as common reasons for issuing ROEs, which can inform HR policies and planning.

Common Factors for Both Methods

Timeliness: Regardless of the method of submission, it’s important to submit the ROE promptly. Delays can impact an employee’s ability to claim EI benefits in a timely manner.
Accuracy: Ensure all information on the ROE is accurate before submission. Errors can lead to delays in EI benefit processing for the employee.
Record Keeping: Keep a record of the submission confirmation and any relevant details. This is important for future reference and in case of any inquiries from either the employee or Service Canada.

Detailed Explanation of ROE Fields

The Record of Employment (ROE) form consists of several fields, each serving a specific purpose. A thorough understanding of these fields is crucial for accurate and compliant completion of the ROE. Here’s a detailed explanation of the key fields on the ROE tab:

Employee Information

Employee: Select the employee for whom the ROE is being issued. This is typically done through a dropdown box or a search function.

Status

Status: This field tracks the status of the ROE.
- Pending: Indicates that the ROE has not yet been filed with Service Canada.
- Submitted: Select this when the ROE has been filed. In electronic formats, this status may update automatically once the ROE is submitted.

Reason for Issuing ROE

Reason: Choose a predefined code for the reason for issuing the ROE. These codes are standardized by Service Canada.
- (A) Shortage of Work/End of Contract or Season: For layoffs due to work shortage or end of seasonal employment.
- (B) Strike or Lockout
- (D) Illness or Injury: When leaving work temporarily due to health reasons.
- (E) Quit: Various sub-reasons like quitting for another job, relocation, retirement, etc.
- (F) Maternity: Specifically for birth mothers taking maternity leave.
- (G) Retirement: For mandatory retirement or approved workforce reduction.
- (H) Work Sharing: Participation in the Work-Sharing Program.
- (J) Apprentice Training: Leaving temporarily for apprenticeship training.
- (K) Other: For reasons not covered by other codes; requires an additional comment.
- (M) Dismissal: When the employment is terminated by the employer.
- (N) Leave of Absence: For various types of unpaid leave.
- (P) Parental: For parental or adoption leave.
- (Z) Compassionate Care/Parents of Critically Ill Children: For claiming compassionate care benefits.

Pay Period Type

Pay Period Type: Select the type of pay period applicable for the employee, such as weekly, bi-weekly, semi-monthly, or monthly.

Regular Policy Reviews: Regularly review and update your ROE issuance policies to ensure they align with the latest legal requirements and best practices.

Dates

First Day Worked: The first day the employee worked since the last ROE or hire date.
Last Day for Which Paid: The last day the employee worked or received insurable earnings.
Final Pay Period Ending Date: The pay period end date after the last day for which paid.
Expected Date of Recall: If applicable, the date when the employee is expected to return to work.

Miscellaneous

Serial No. (Optional): If using a serial number from a paper form, it is entered here.
Comments: Any specific details or exceptional circumstances can be communicated here.
Release All Accruals: Indicate whether all dollar accruals are being released.
Generate Final Pay Stub: Indicate if the final pay stub is generated at the time the ROE is issued.

Form Setup Tab

Insurable Absence Policies: Select absence policies contributing to insurable hours.
Insurable Earnings (Box 15B): Select pay stub accounts making up the total amount of Insurable Earnings for Box 15B.
Vacation Pay (Box 17A): Select accounts for the total amount of Vacation Pay for Box 17A.
Other Monies (Box 17C): Select accounts for separation payments or benefits other than vacation or statutory holiday pay.

By correctly filling in these fields, employers can ensure that their employees’ ROEs are accurate and compliant, facilitating a smooth process for EI benefit claims.

Tips for Employers

When managing Records of Employment (ROE) and related payroll processes, there are several best practices that employers can follow. These tips not only ensure compliance with regulations but also facilitate a smoother transition for employees during changes in their employment status.

Releasing Accrued Vacation for Extended Leave

Proactively Manage Vacation Accruals: For employees going on extended leave, consider releasing their accrued vacation pay. This simplifies the process in case the employee does not return to work, as it resolves potential issues related to unpaid accrued vacation.
Communicate Clearly with Employees: Ensure that employees are aware of their vacation balances and how going on leave might affect their accruals. Transparency helps in avoiding misunderstandings and grievances.

Handling Pay Stub Amendments

Accurate Record-Keeping: Keep detailed and accurate records of all pay stubs. This is crucial for any necessary amendments and for maintaining a clear audit trail.
Timely Amendments: If there are discrepancies or errors in pay stubs, address them promptly. Delayed amendments can lead to complications, especially if they impact the information on the ROE.
Clear Communication: Inform affected employees about any amendments to their pay stubs, including the nature of the amendment and how it impacts their pay or benefits.

Post-Adjustment Carry Forwards

Understand the Implications: Be aware of how post-adjustment carry forwards (such as adjustments for previous pay periods) can affect the current payroll and the employee’s earnings records.
Maintain Consistency: Apply the same principles and methods for carry forwards to ensure fairness and consistency across all employees.
Document Reasons for Adjustments: Keep detailed records of why adjustments are made. This documentation is vital for internal audits and potential queries from employees or regulatory bodies.

Additional Best Practices

Stay Informed About Regulations: Keep up to date with changes in employment laws and EI regulations. This knowledge is essential for maintaining compliance.
Use Technology Effectively: Utilize payroll and HR software efficiently to manage ROEs and related processes. Many systems offer features that streamline and automate aspects of payroll management.
Employee Training: Ensure that staff members handling payroll and HR tasks are well-trained and understand the importance of accurate and timely ROE issuance.
Seek Professional Advice: When in doubt, consult with HR professionals or legal experts, especially for complex situations involving layoffs, terminations, or extended leaves.

Regular Training Sessions: Conduct regular training sessions for your HR and payroll staff on the latest ROE procedures and updates to ensure compliance and efficiency.

Legal and Compliance Aspects

The issuance of the Record of Employment (ROE) is not just a procedural step in the employment process; it is a legal obligation with significant implications. Understanding and adhering to the legal requirements surrounding the ROE is crucial for employers to maintain compliance and avoid potential legal consequences.

Legal Requirements of the ROE

Timely Issuance: Employers are legally required to issue an ROE within five days after the end of the pay period in which an employee’s interruption of earnings occurs. This prompt issuance is critical for employees seeking to apply for Employment Insurance (EI) benefits.
Accuracy of Information: The information provided on the ROE must be accurate and complete. This includes correct employee details, insurable hours, earnings, and the reason for issuing the ROE. Inaccuracies can lead to legal complications and delays in EI benefits for employees.
Record Keeping: Employers must keep copies of all issued ROEs and the related payroll records for at least six years. This requirement ensures that there is a traceable record for audit and inspection purposes.

Implications of Non-Compliance

Delays in EI Benefits: If an employer fails to issue an ROE or issues it late, the employee’s application for EI benefits may be delayed. This can cause financial hardship for the employee and potential legal claims against the employer.
Penalties and Fines: Employers who do not comply with the ROE issuance requirements can face penalties, fines, and other legal actions under Canadian employment laws. These can include charges under the Employment Insurance Act and the Canada Labour Code.
Reputational Damage: Non-compliance can also lead to reputational damage, impacting the employer’s brand and ability to attract and retain talent.
Audit and Legal Scrutiny: Employers who consistently fail to meet ROE requirements may be subject to audits and increased scrutiny from regulatory bodies, leading to further legal and financial implications.

Best Practices for Compliance

Stay Informed: Regularly update your knowledge of employment laws and EI regulations to ensure compliance.
Use Reliable Systems: Implement and utilize reliable payroll systems that facilitate accurate and timely issuance of ROEs.
Employee Education: Educate your employees about the importance of the ROE and their rights regarding EI benefits.
Seek Professional Advice: Consult with HR experts or legal advisors to navigate complex situations or when updating company policies related to employment termination and leaves.

Adhering to these legal requirements not only ensures compliance but also demonstrates an employer’s commitment to fair and responsible employment practices. It’s an integral part of fostering a respectful and legally sound workplace.

Conclusion

The Record of Employment (ROE) is a fundamental document in the Canadian employment landscape, serving as a critical link between employers, employees, and the Employment Insurance (EI) system. Its correct and timely completion and submission are not just a legal requirement but a crucial step in supporting employees during periods of earnings interruption. Whether due to layoffs, leaves of absence, or termination, the ROE plays a pivotal role in ensuring employees have access to the financial support provided by EI benefits.

Employers bear the responsibility of accurately filling out and promptly submitting ROEs, as any errors or delays can have significant consequences for both the employee and the employer. This process, while seemingly administrative, underscores a larger commitment to fair employment practices and adherence to Canadian labor laws.

For a comprehensive understanding of the ROE, its fields, and the legalities surrounding it, employers and employees are encouraged to refer to the official resources provided by the Canadian government. These resources offer detailed guidance and up-to-date information essential for navigating the ROE process.

References and Further Reading

To delve deeper into the specifics of the Record of Employment and related Employment Insurance guidelines, the following official Canadian government resources can be invaluable:

Employment and Social Development Canada – ROE Guide: Guide to the Record of Employment
Service Canada – ROE Information: Record of Employment on the Web (ROE Web)
Understanding Employment Insurance: Employment Insurance (EI) and Regular Benefits
Canada Labour Code – Employment Standards: Employment Standards in Canada

These resources are key to ensuring that the process of issuing and managing Records of Employment is handled in a compliant and efficient manner.

*This document serves as an initial reference for understanding an employer’s responsibilities in managing their workforce. It is not an exhaustive guide on the subject. The document presents useful insights and is shared with the acknowledgement that TimeTrex does not offer legal, tax, or other specialized advice.

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