If you’re in the midst of switching payroll companies, you probably know that there’s a few key steps involved. You need to request copies of all the payroll register reports and you need to get copies of pay stubs for all your employees. However, there is another, equally important, step that goes along with switching payroll providers: an ROE filing for a change of provider.
If the term ROE is new to you or maybe you thought ROEs were only necessary when terminating an employee, don’t worry because we’ll break things down for you. We’ll not only cover what an ROE is, but we’ll also explain why it’s necessary when switching payroll providers.
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What is a Record of Employment (ROE)?
If you’re an employer, you’ll need to know all about Records of Employment (ROEs). Basically, an ROE is an important document that reveals key information about a person’s employment history, including how long they worked, and how much they earned with an employer.
If you’re an employer, you must issue a ROE each time an employee quits, is terminated, or experiences any other “interruption of earnings.” The CRA defines an interruption of earnings as seven consecutive calendar days with no work and no insurable earnings from the employer.
Service Canada needs the information in an ROE to determine whether a person is eligible to receive Employment Insurance (EI) benefits, the amount of benefits they will receive, and how long the benefits will be paid. And remember, you must complete an ROE each time there is an interruption of earnings even if the employee does not intend to apply for EI benefits.
ROE filing can be done by paper or online, and the method you choose changes the deadline for filing the ROE. If you are issuing an ROE on paper you must issue an ROE within five calendar days of:
- the first day of an interruption of earnings; or
- the day the employer becomes aware of an interruption of earnings.
If you wish to file an ROE electronically, you can do this through the government’s secure web-based Record of Employment on the Web (ROE Web) application. If your pay period is weekly, biweekly (every two weeks), or semi-monthly (twice a month), 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.
Note that some payroll providers, including Knit, will produce and file ROEs on your behalf, saving you valuable time.
ROE Filing and Switching Payroll Providers
While most employers think of ROEs in the context of employee termination, ROE filing is also necessary when switching payroll providers.
When switching payroll providers, you’ll need to ask your current provider to issue and submit an ROE to Service Canada for each employee after you process your last payroll with them. This is necessary to keep your company compliant and to give your new payroll provider access to a comprehensive per pay period breakdown of insurable earnings so they can prepare ROEs on your behalf.
Completing ROE Web Authorization
In order for your new payroll provider to be able to prepare and submit ROEs on your behalf, you need to complete and e-sign the ROE Web Authorization form. Before doing this, there are a few things to keep in mind:
- Before completing the ROE web authorization form with your new provider, all prior payroll data should be submitted to Service Canada through Change of Provider ROEs.
- After the form has been signed, your new provider will submit a request to Service Canada to become the Primary Officer for your company's ROE web account. Keep in mind that there can only be one primary officer account associated with any organization.
Once you have signed the ROE web authorization form with your new provider, the information will be sent to Service Canada. It may take between four to six weeks for Service Canada to process the form. During this time, your new provider will not be able to prepare electronic ROEs for any of your employees who experience an interruption of earnings.
Remember, ROE filing for a change of provider is an important step in the process of switching payroll providers and doing things by the book will save you from future trouble with the CRA.
By Katherine Pendrill on Nov 5, 2019