What is an ROE and why does it matter to employers?
A Record of Employment (ROE) is a specific form that must be filled out by an employer and filed with Service Canada for any employee with insurable earnings who has a lapse in their income. An ROE is one of the most important employment documents as it determines whether an employee qualifies for Employment Insurance (EI) benefits.
Service Canada uses the ROE to determine if an employee is entitled to an Employment Insurance (EI) claim, the benefits’ duration, and the amount of compensation. The government also uses the ROE to ensure that no one misuses EI benefits or makes a false claim. Service Canada holds all ROE forms for 11 years. As such, all essential information must be accurate.
As an employer, you must complete and file a record of employment for any employee with a lapse of earnings, whether or not they intend to make an Employment Insurance claim. And even if you are a non-Canadian business, you must still file an ROE for any Canadian employee working for you.
What are interruptions of earnings?
A lapse in an employee’s compensation is referred to as an interruption of earnings. This is determined by no work and no insurable earnings for seven consecutive calendar days for an employee, also known as the seven-day rule. An interruption of earnings also qualifies if the circumstance is anticipated.
There are several reasons an interruption of earnings can occur:
- An employee quits
- An employee is laid off
- An employee is terminated
- An employee’s insurable earnings fall below 60% of their regular wages. This can be due to injury, illness, quarantine, pregnancy, caring for a newborn child or adopted child, or caring for a family member with a critical illness
There are exceptions to the criteria of an interruption of earnings, including:
- Real estate agents
- Employees who have a non-standard work schedule, such as firefighters or health care workers
- Commission paid salespeople
How to complete records of employment
There are two options for completing a record of employment: a paper version and an electronic version.
When issuing the paper version, complete all areas of the form, including employer information, employee information, work history, insurable earnings, and insurable hours. The ROE is a triplicate form. The original top copy is provided to the employee. They will need to submit this to Service Canada if they wish to claim Employment Insurance benefits. The middle copy is mailed to Service Canada. And the bottom copy is to be kept by the employer for their records.
If you require the paper version, you can contact the Government of Canada Employer Contact Centre at 1-800-367-5693 to order copies.
There are three ways that you can file an electronic version of the record of employment:
- Through the ROE Web, you can manually enter the information required and submit it electronically.
- You can use payroll software compatible with the ROE Web and complete the form directly through your payroll software.
- If you use a payroll service provider, they can complete the form on your behalf and submit the ROE through a secure automated transfer (SAT).
FAQs about the Record of Employment (ROE)
Is a T4 the same as a record of employment?
A T4 is not the same as a record of employment.
An ROE is the document required to complete when there is a lapse of insurable income for an employee, as explained above. It is a necessary form for an employer to complete and is directly related to whether an employee can make an Employment Insurance claim.
A T4, also called a Statement of Remuneration Paid, is an informational document provided by an employer for all employees to summarize their earnings for each calendar year. It includes the employee’s income and how many deductions were withheld and submitted to the government for taxes. A T4 is required for an employee to file their personal income tax at each year-end.
When do I have to issue an ROE?
As an employer, you must issue a record of employment each time an employee experiences an interruption of earnings.
When issuing a paper copy, you have five calendar days from the first day of the interruption of earnings to complete and file a record of employment.
If completing the ROE electronically, you have five calendar days after the end of the last pay period.
There are other particular circumstances where you may be required to issue an ROE, such as:
- When you receive a request from Service Canada to issue a record of employment
- When an employee stays with an employer but the CRA payroll account number changes
- When there is a change in ownership of the business
- When the employer declares bankruptcy
- When an employee has a wage loss insurance plan payment
- When an employee is part-time, on-call, or has casual employment
- When an employee takes a self-funded leave of absence
As an employer, you can find detailed information regarding each of these circumstances on the Government of Canada website.
What information is on a record of employment?
A record of employment has vital information about the employee and their insurable earnings and hours. Service Canada uses this document to indicate whether an employee is eligible for an Employment Insurance claim.
The ROE form contains basic information about the employer, such as their name, address, and Canada Revenue Agency Business Number. It also has basic information about the employee, including their name, address, and Social Insurance Number.
In addition to the above, it also contains vital information about their interruption of earnings. With details such as:
- Employee’s first day of work
- Employee’s last day that they were paid for work
- Final pay period ending date
- Employee’s total insurable earnings
- Employee’s total insurable hours
- Reason for issuing the record of employment
The company’s certifier then signs the ROE, often a payroll administrator or someone else who is delegated to complete the record of employment on behalf of the business, indicating that all information contained within is true and accurate.