What Is an ROE? Record of Employment Explained
As a Canadian business owner, you’re most likely no stranger to paperwork, but one document often catches employers off guard: the Record of Employment (ROE). Whether you’ve come across unexpected layoffs, hire seasonal workers, or need to handle an employee’s parental leave, the ROE plays an important role in your employee’s ability to access Employment Insurance (EI) benefits.
If you ever found yourself staring at an ROE form, wondering what to do next, don’t worry — you’re not alone. In this guide, we’ll break down what an ROE is, when and why you need to issue one, and how to make sure it’s completed correctly.
What Is a Record of Employment?
A Record of Employment (ROE) is a form that employers must complete for any employees who stop working for the company and are no longer being paid. This form provides information on employment history and allows employees to collect Employment Insurance (EI) should they face an interruption of earnings. Service Canada keeps ROEs on file for 11 years.
Every year over nine million ROE forms are filled out by more than a million employers across Canada.
Why Do Employees Need ROEs?
Employees need to be able to obtain their record of employment if they stop working and need to apply for EI. Eligibility for EI is the main reason why most former employees would need a record of employment. If an employee stops working, their employer must file an ROE regardless of whether the employee intends to apply for EI or not.
How Can Employees Get a Record of Employment?
There are two ways you can get an ROE from your employer:
- Your employer can file your ROE electronically within five days of the end of the pay period in which you stopped working. In this case, you can access your ROE online through your My Service Canada Account.
- Your employer can give you a paper copy of your ROE within five days of your first interruption of earnings. If your employer gives you a paper copy of your ROE, you’re required to submit it to Service Canada when applying for EI benefits. It can be submitted online with your EI application, by mail, or in person at a Service Canada Centre.
Who Completes the ROE Form?
It’s the employer’s responsibility to complete an ROE within five days of the employee's last day of work or interruption of earnings. Every employer must complete an ROE form, even for employees who aren’t applying for EI benefits. To fill out an ROE form, you need to enter employee identification details, work history with the company, and any insurable earnings or insurable hours they registered over the year.
An ROE can be submitted in two formats:
1. Electronic ROE
You can submit an ROE online in one of three ways:
- Entering data manually through ROE Web using Service Canada's website
- Using compatible payroll software to submit ROEs via ROE Web
- Using Secure Automated Transfer (SAT), performed by a payroll service provider on your behalf using bulk transfer technology, to submit ROEs
Electronic ROEs are divided into three categories based on serial numbers starting with:
- W or M – ROE Web
- S – ROE SAT
- Y – ROE Web for self-employed fishers
What Is ROE Web?
ROE Web provides employers with a simple, efficient, and secure way to issue up to 1,200 electronic ROEs at once according to your pay cycle. This system allows you to create, print, submit, and make changes to ROEs through an online portal. Ultimately, ROE Web saves you time and reduces paperwork, helping you improve the accuracy of your ROEs.
2. Paper ROE
A paper ROE is issued in triplicate, which means there will be three copies of the ROE – an original and two carbon copies.
Once completed, copies of the paper ROE should be distributed as follows:
- The employee gets the first copy (the original), so they can use it to apply for EI benefits.
- The second copy (blue) is submitted to Service Canada.
- The third copy (white) is for the employer's records and must be kept for 6 years.
There are five types of paper ROEs. Each ROE type is given a serial number that begins with the following letters:
- A – English or French ROE (These types of paper ROEs have already been distributed and cannot be ordered anymore. However, they are still valid.)
- E – English ROE
- K – French ROE
- L – Laser ROE (This format is outdated and has been replaced by ROE Web.)
- Z – ROE for fishers
What Is an Interruption of Earnings?
An interruption of earnings can take place when:
- The employee has had or is expected to have at least seven consecutive calendar days of no work or insurable earnings from the company. Named the 7-day rule, it does not apply to real estate agents, commissioned salespeople, or workers with a non-standard work schedule.
- An employee's salary falls below sixty percent of their weekly earnings due to injury, pregnancy, or illness. It also applies to parents who need to care for a newborn or an adopted child and those who care for or support a terminally ill family member.
- An employee quits the job.
- An employee’s contract ends.
- An employee is terminated or laid off.
As a Canadian employer, you are required to complete your employee's ROE in case any of the above-mentioned interruptions occur regardless of whether your employee plans to apply for EI benefits. You have the choice to file a paper or an electronic ROE; however, the vast majority of employers prefer to issue electronic ROEs rather than paper ROEs.
When Does an Employer Have to Issue an ROE?
Employers have five calendar days after the first day of an interruption of earnings to issue a paper ROE. If filing electronically, the deadline is five calendar days after the end of the current pay period for weekly, bi-weekly, or semi-monthly pay schedules. However, if you pay your employees monthly or thirteen times a year (every four weeks), you should issue an electronic ROE by whichever date is earlier:
- Five days after the end of the pay period in which the employee experienced an interruption of earnings, or
- Within 15 calendar days after the first day of the interruption of earnings.
Keep in mind that there are several special situations where employers must issue ROEs outside of an interruption of earnings.
What Happens if I Fail to Provide My Employee With an ROE?
If an employer fails to provide an ROE, they can be subject to a fine of up to $2,000, jail time of up to six months, or a combination of both.
How Do I Issue Mass ROEs to Employees?
You can issue mass electronic ROEs to your employees using the ROE Web payroll extract functionality to submit up to 1,200 ROEs at once.
Issuing mass paper ROEs is much harder. Paper ROEs are a one-page form issued in triplicate — one copy is original and two are carbon copies. If you mass issue paper ROEs, then you'd have to send physical ROE copies to each employee, as well as Service Canada. This process can become costly and inefficient if you have a large number of ROEs that need to be issued.
Do I Need to Issue ROEs if I’m Temporarily Closing My Business?
Closing your business temporarily could result in an interruption of earnings for your employees depending on how long the business will be closed. Following the 7-day rule, an interruption of earnings occurs when an employee has no work and no insurable earnings from an employer for seven consecutive calendar days. Simply put, if you plan on temporarily closing your business and not providing your employees with work or pay for seven consecutive days or longer, you should issue ROEs.
Is a Record of Employment the Same as a Form T4?
No. An ROE is filed when an employee leaves a job or an interruption of earnings occurs. An ROE documents the number of hours an employee has worked in the past 52 weeks to determine eligibility for EI benefits. To be eligible for regular EI benefits, an employee has to work for a minimum of 42 hours.
Form T4 is used to file annual income taxes and must be issued before the last day of February after the end of the calendar year. The Form T4 is used to determine whether an employed individual has paid taxes levied on their yearly salary.
How Does Service Canada Determine EI Eligibility?
Service Canada uses the Record of Employee Form to confirm that an employee is eligible for Employment Insurance (EI) benefits. This information is used to determine the benefit amount and the time period for which the employee is eligible to receive these benefits. Service Canada also uses the ROE to ensure that only eligible employees receive EI funds and that this program is not misused.
Simplify Your ROEs With Payroll Technology
Looking for a solution to make issuing ROEs easy? Consider using an integrated people management software, like Push. Keep your ROEs stored in a centralized online platform, reducing cluttered paperwork and making these important documents accessible.
Book a demo today to experience the power of Push’s automated all-in-one people management solution. We take care of all things HR, so you can focus on doing what you do best: growing your restaurant business.
Want to streamline your restaurant's Canadian payroll? From set up to doing your first run, this checklist covers it all. Download your free payroll checklist now!
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