What is a Record of Employment (ROE)? A Canadian Employer Guide
What is a Record of Employment?
A Record of Employment (ROE) is a document Canadian employers issue when an employee has an interruption of earnings. Service Canada uses it to determine whether the employee qualifies for Employment Insurance (EI), how much they may receive, and how long benefits may last.
An ROE includes important payroll details like the employee’s insurable earnings, insurable hours, pay period information, and the reason the ROE is being issued.
As an employer, issuing ROEs correctly and on time helps your employees access benefits when they need them and helps you stay aligned with Service Canada requirements.
Special situations of note:
- If you’re a business outside of Canada and your Canadian employee is paid Canadian funds and has EI premiums deducted from their gross pay, you’ll have file ROEs if they experience what’s classified as an “interruption in earnings.”
- Workers in Québec — Québec Parental Insurance Plan (QPIP) employees don’t qualify for EI maternity and parental benefits if they haven’t paid EI premiums. They will have to contact QPIP directly to sign up.
Why do ROEs matter?
ROEs are a regular part of payroll compliance in Canada. More than one million employers complete more than nine million ROE forms each year.
Employees need ROEs to apply for Employment Insurance benefits after certain interruptions of earnings, like a layoff, termination, leave, or other eligible break from work.
Employers are responsible for issuing ROEs accurately and on time. Missing or late ROEs can delay an employee’s EI claim and may lead to penalties, including fines or prosecution.
What qualifies as insurable earnings?
Insurable earnings are the types of compensation paid to an employee that Employment Insurance (EI) premiums apply to. These amounts are reported on the ROE and help Service Canada determine an employee’s EI benefit amount.
Insurable earnings can include:
- Salary and wages
- Commissions
- Bonuses
- Overtime pay
- Statutory holiday pay
- Vacation pay
- Sick leave pay
- Cost of living increases
- Other eligible earnings
For a full list of earnings and their insurable status, please read the CRA’s Earnings Charts.
In certain cases, hours are not insurable. For example, if an employee of a corporation owns more than 40% of the corporation’s voting shares, the employment hours don’t qualify.
Who’s the final judge on insurable earnings?
Service Canada will determine where insurable earnings are allocated on the ROE, but it’s the CRA that has the final say on what types of earnings are insurable.
What are insurable hours on an ROE?
Insurable hours are the hours an employee worked in insurable employment. Like insurable earnings, these hours are included on the ROE and help Service Canada determine whether an employee has enough qualifying hours for Employment Insurance benefits.
For many employees, insurable hours are based on the hours they actually worked. For salaried employees or employees with non-standard schedules, employers may need to calculate or confirm hours based on the applicable payroll records and Service Canada guidance.
Before submitting an ROE, make sure the employee’s insurable hours match your payroll records for the reporting period.
What is an interruption of earnings?
An interruption of earnings generally happens when an employee has, or is expected to have, seven consecutive calendar days with no work and no insurable earnings.
When does an employer need to issue an ROE?
As an employer, you’re required to issue an ROE when an employee that’s working in an insurable earnings environment experiences an interruption of earnings.
Common examples of when you need to file an ROE:
- Shortage of work or layoff
- Resignation or voluntary departure
- Termination or dismissal
- Maternity, parental, or other leave
- Illness or injury
- End of contract or paid internship
- Change in payroll frequency
- Change in ownership
- Employer bankruptcy
- Service Canada requests an ROE
Here are a few unique examples of when you need to file an ROE:
- When there’s a change in payroll frequency
- When there’s a change in a payroll provider
- When the employees earnings fall below 60% of normal weekly earnings.
- When there is an interruption of earnings. Example: seven consecutive calendar days without both work and insurable earnings.
- When there is a change in ownership.
- When an employer declares bankruptcy
- When Service Canada requests an ROE.
Are there exceptions to the ROE rules?
There are exceptions and they relate to the industry and type of work.
Exceptions to the 7-day rule – Interruption of earnings
- Real estate agents
- Commissioned sales people
- Employees who have non-standard workdays (For example, a pilot may be on call to work three consecutive 12-hour shifts but has eight consecutive days off.)
How long does an employer have to issue an ROE?
If filing a paper ROE, employers must submit the ROE within five (5) calendar days of an interruption of earnings. This five-day timeline starts on the earlier of:
- the first day of the interruption of earnings, or
- the day the employer becomes aware of the interruption of earnings.
If you issue ROEs electronically and your pay period is weekly, biweekly, or semi-monthly, you have up to five calendar days after the end of the pay period in which an employee’s interruption of earnings occurs to issue an electronic ROE.
If you have a monthly pay period or 13 pay periods per year (every four weeks), you must issue electronic ROEs by whichever date is earlier:
- Five calendar days after the end of the pay period in which an employee experiences an interruption of earnings
- 15 calendar days after the first day of an interruption of earnings
As mentioned above, failure to do so may have serious consequences such as fines or prosecution.
Note: If you issue electronic ROEs, you no longer need to provide a paper copy to your employees.
How do employers submit an ROE?
There are 3 ways to submit ROEs electronically:
- you can submit ROEs through ROE Web by using compatible payroll software to upload ROEs from your payroll system
- you can submit ROEs through ROE Web by manually entering data online through Service Canada’s website, and
- you can submit ROEs through Secure Automated Transfer (SAT), which is performed on your behalf by a payroll service provider using bulk transfer technology
Tip: Wagepoint uses ROE SAT to securely submit ROEs.
Steps to Submitting a Paper Form Record of Employment
The paper form will require three carbon copies. One given to Service Canada, one given to your employee, and one for you to keep.
- Reach out to the Employer Contact Center and request a paper form.
- Complete the form.
- Give Part 1 to the employee who will use this copy to apply for EI benefits.
- Send Part 2—the blue copy—to your local Service Canada Center.
- Keep Part 3 for your records.
What are ROE reason codes?
ROE reason codes explain why the Record of Employment is being issued. Employers must choose the code that best matches the employee’s interruption of earnings.
Common ROE reason codes include:
- Code A: Shortage of work
- Code D: Illness or injury
- Code E: Quit
- Code F: Maternity
- Code G: Retirement
- Code M: Dismissal
- Code N: Leave of absence
- Code P: Parental leave
- Code K: Other
Potential Record of Employment questions
Where can employees find their ROE?
If you submit an ROE electronically, employees can view it through their My Service Canada Account. If you issue a paper ROE, the employee receives a paper copy from you.
Can an employee apply for EI without their ROE?
Employees can apply for Employment Insurance before their ROE is available, but Service Canada will need the ROE to finalize the claim. Submitting the ROE on time helps prevent delays.
How long can employees access their ROE?
Service Canada keeps electronic ROEs for 11 years. Employees can access them through their My Service Canada Account during that period.
Does quitting or being dismissed affect EI eligibility?
It can. Service Canada reviews the reason for the interruption of earnings when assessing Employment Insurance eligibility. Employers should report the reason for issuing the ROE accurately and avoid trying to determine EI eligibility on the employee’s behalf.
Handle ROEs with less manual work
ROEs are a normal part of running payroll in Canada, but they don’t need to become a last-minute scramble. Keeping accurate payroll records makes it easier to confirm earnings, hours, dates, and reason codes when an employee has an interruption of earnings.
If you’re a Wagepoint customer, we can submit your ROEs for you.
Upon your SAT authorization, we will file your information to Service Canada for you. Click here for information on how you can create, and submit, your ROEs within Wagepoint.
