Employer Responsibilities for a Record of Employment (ROE)

When issuing a Record of Employment (ROE), there are multiple points of compliance for Canadian employers to be aware of—and many common pitfalls.

Issuing an ROE on time, for the correct circumstances, with the correct codes for the situation is key, and it can be difficult to get it right without proper document storage and workplace procedures.

Learn when and how to issue an ROE to your employees, to prevent any compliance risks for your business.

What is a record of employment?

A Record of Employment (ROE) is a mandatory and formal document that employers must issue when an employee encounters an interruption of earnings.

An ROE contains information for Service Canada to be able to determine an employee’s eligibility for Employment Insurance (EI) benefits. These include, but are not limited to details regarding the employee’s work history with your business, insurable earnings and insurable hours.

If an employer fails to provide an accurate ROE on time, they can face a fine of up to $2,000, or imprisonment for up to 6 months, or both, under section 137 of the Employment Insurance Act.

Why an ROE is used

Using the information in a Record of Employment, Service Canada will be able to verify claims and provide the correct entitlements that an employee is eligible for.

• Checking EI eligibility: To check whether an employee has met the threshold for a required number of insurable hours to qualify for benefits

• Calculate benefit entitlements: If an employee meets the threshold, an ROE will also be used to determine the amount an employee is entitled to, and for how long

• Preventing fraud/false claims: To verify whether a claim is fraudulent or not, and to ensure that EI is distributed correctly to prevent abuse of the system

When and how an ROE should be issued

There are strict deadlines for ROE submissions to be made by the employer, which can vary depending on how the ROE is submitted, and the pay cycles of the business.

Most employers in Canada will use an electronic ROE, as they are faster, more secure and automatically accessible to Service Canada. Paper ROEs are less common, and employers must ensure timely delivery.

Any delays with ROEs extend the time before an employee will receive EI benefits.

Electronic ROE (ROE Web)

Electronic ROEs must be issued within 5 calendar days of the first day of an interruption of earnings or the day the employer becomes aware of an interruption of earnings.

Paper ROE

Within 5 calendar days are the employee’s last day of work, or 5 calendar days after issuing the final pay.

Insurable hours and pay explained

Employers are expected to report all insurable hours and pay within the relevant period; typically, either since employment started, or since the last ROE was issued.

Insurable hours are the time an employee worked or was paid for, and insurable pay is the earnings that were subject to EI premiums. Anything discretionary, unpaid or for job loss compensation would generally fall outside of the insurable category—however, we recommend consulting a professional on this if you’re unsure.

How an interruption of earnings works

There are two key ways to define an interruption of earnings, which will trigger the necessity of an ROE to be provided.

• The 60% rule: If an employee’s normal weekly earnings fall below 60% of their standard amount (a reduction of 40%) for certain reasons.

• The 7 day rule: The employee has experienced or is expected to experience 7 consecutive calendar days with no work, and no insurable earnings.

Depending on the situation, an ROE code will need to be provided. Below are some examples of when a code will apply.

Note: If you are having trouble assigning the correct code for an ROE, we suggest obtaining professional legal advice.

The 60% rule for interruptions of earnings explained

There are special benefit scenarios for the 60% rule to be triggered. For this rule, the interruption starts on the Sunday of the week that the earnings fell below the 60% threshold.

Here are some common scenarios in which you’ll need to issue one, and the ROE codes to apply:

• Illness or Injury (Code D): If an employee must stop working or reduce their working hours a significant amount due to illness, injury or medical conditions.

• Pregnancy/Maternity Leave (Code F): A birth parent taking leave for their pregnancy, to give birth and take care of their newborn.

• Parental Leave (Code P): When a parent takes leave to care for their newly born or adopted child. This applies to birth parents, partners and adoptive parents. The issued ROE can apply to a birth parent for both pregnancy/maternity leave as well as parental leave.

• Compassionate Care or Family Caregiver Leave (Code Z): An employee can take leave to take care of a seriously ill family member.

The 7 day rule for interruptions of earnings explained

This rule applies to the most common forms of work stoppage. For the 7 day rule, an interruptions is deemed to have started on the employee’s last day for which they were paid.

Here are some common scenarios and the ROE codes which will apply to the situation:

• Layoffs (Code A): If a company lays off employees due to a temporary shutdown, the end of a seasonal contract or a lack of available work.

• Termination (Code M): If an employee is dismissed or fired for any reason other than a layoff. It is critical for an employer to clarify whether the termination was for or without cause in Block 18 of the ROE.

• Resignation (Code E): If an employee voluntarily quits and leaves their job—this could be to accept a different job or return to school.

• Leave of Absence (Code N): If an employee takes an unpaid, approved leave of absence while still under contract. Codes for illness, injury, parental and maternity leave are different.

• Labour Disputes (Code B): If a work stoppage takes place because of a lockout or strike.

• Retirement (Code G): When an employee retires, whether part of a retirement policy or voluntarily taken.

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