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According to the Service Canada, a Record of Employment (ROE) “is the single most important document used by employees to apply for Employment Insurance (EI) benefits.” In other words, it’s a pretty big deal. But despite its importance, not everyone knows exactly what an ROE is and when to issue one. To make things a little more clear, we sat down with Knit People’s Senior Accounting Associate Guriqbal ‘Guri’ Singh to get some answers.
What is an ROE?
At its core, an ROE provides information on a person’s employment history, including how long they worked and how much they earned with an employer. This information is then used by Service Canada to determine whether a person is eligible to receive EI benefits, the amount of benefits they will receive, and how long the benefits will be paid. Service Canada also uses ROEs to make sure no one misuses EI funds or receives funds when they shouldn’t.
When do you need to issue an ROE?
If you are an employer, you must issue an ROE each time an employee experiences an interruption of earnings—even if the employee does not intend to apply for EI benefits. An interruption of earnings occurs when:
● An employee quits.
● An employee is laid off or terminated.
● An employee has had, or is anticipated to have, seven consecutive calendar days with no work and no insurable earnings from the employer (also known as “The Seven-Day Rule”).
● An employee's salary falls below 60% of regular weekly earnings. This may be due to illness or injury, pregnancy, the need to provide care or support to a family member, etc..
If any of the above occurs you will need to complete an ROE for the employee.
When is the deadline for issuing an ROE?
How soon you have to file the ROE depends on whether the process is being done on paper or electronically. 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.
Alternatively, you can also issue an ROE electronically through the government’s secure web-based application Record of Employment on the Web (ROE Web). If you are issuing an ROE electronically, the deadline will depend on your business’ pay period. 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.
However, 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; or
● 15 calendar days after the first day of an interruption of earnings.
Of course, if you are using a cloud-based payroll provider such as Knit, issuing and filing an ROE can be done entirely within the system, making the entire process a breeze.
For more information on ROEs and issuing ROEs electronically or on paper, consult Service Canada’s online guide.
Disclaimer: This article provides general information and should not be construed as tax advice. Since tax rules may change over time and can vary by location and industry, please consult a CPA or tax advisor for advice specific to your business.
By Katherine Pendrill on Jan. 8, 2019