When to Issue a Record of Employment (ROE) - Understanding Your Responsibilities

As an employer in Canada, understanding your obligations concerning the issuance of a Record of Employment (ROE) is critical to ensuring a smooth relationship with both your employees and regulatory authorities. ROE, standing for Record of Employment, is a declaration that employers are legally required to complete when an employee experiences an interruption in their earnings. These interruptions could arise due to various reasons, such as lay-offs, termination, quitting, or being on a leave.

The primary objective of an ROE is to facilitate the Employment and Social Development Canada (ESDC) in determining an employee's eligibility for Employment Insurance (EI) benefits. Moreover, it serves as an essential document that records an employee's work history and helps Service Canada officials make essential decisions concerning several other benefit programs like the Canada Pension Plan (CPP), Maternity and Parental Benefits, and Old Age Security (OAS).

For employers, knowing when to issue an ROE is crucial, as delays or inaccuracies can lead to potential fines and complications. This blog post aims to provide you with a comprehensive understanding of the various situations when an employer is required to issue an ROE, the standard procedures and requirements, and other valuable information related to this vital document.

When to Issue a Record of Employment (ROE): Navigating Your Responsibilities as a Canadian Employer

Understanding the Purpose and Importance of ROE in the Canadian Workplace

The Record of Employment (ROE) serves as a crucial document for both employers and employees in Canada. An employer's responsibility does not end with issuing an ROE; they must ensure that it is accurate and submitted in a timely manner. Failure to meet these obligations could result in penalties for the employer, and it may also delay or jeopardize the employee's access to necessary Employment Insurance (EI) benefits. Thus, understanding the purpose of ROE helps both parties appreciate the significance of this document in maintaining a transparent and supportive employment relationship.

Besides being essential for determining eligibility for EI benefits like regular, maternity, and parental benefits, the ROE aids in calculating the amount and duration of these benefits. Additionally, an ROE is pivotal for various government programs, including the Canada Pension Plan (CPP), Old Age Security (OAS), and working while on a claim. Consequently, staying up-to-date with ROE guidelines and compliance requirements fosters a healthy employment atmosphere.

Identifying the Differentiating Factors: What Triggers an ROE Issuance

As an employer, it is vital to know when to issue an ROE for your employees. Generally, you must issue one in cases of an interruption of earnings, which occur when an employee has worked zero "insurable hours" in the previous 7 consecutive calendar days. Here are some specific situations that necessitate an ROE issuance:

1. Layoffs and termination: If an employee is laid off or terminated, whether temporarily or permanently, you must issue an ROE promptly.

2. Quitting: If an employee voluntarily leaves their job, you are required to issue an ROE within five days of their departure.

3. Leaves of absence: When an employee takes a leave of absence, including maternity, parental, or caregiver leave, an ROE must be submitted.

4. Changes in the employer's business: In cases of the sale or transfer of a business, or if the employee changes their nature of work within the same organization, an ROE must be issued.

It is essential to note that if an employee continues working but with reduced hours, an ROE might not be necessary. However, if this reduction leads to significant income gaps, the employee may be entitled to EI benefits, thus requiring an ROE.

Meeting Submission Timelines: When to Submit an ROE After an Interruption of Earnings

Timeliness is critical when it comes to ROE submissions, as delays can negatively impact an employee's access to benefits and potentially result in penalties for the employer. After an interruption of earnings, employers must issue an ROE within the following deadlines:

1. Paper format: Employers using a paper format must issue the ROE within five calendar days.

2. Online format: Employers submitting an electronic ROE have up to five calendar days after the end of the pay period.

It is recommended that employers use the online format available through the Service Canada website, as it is faster, more secure, and reduces the risk of errors.

Ensuring Accuracy in ROE Information: Avoiding Mistakes and Miscommunication

Accuracy is just as crucial as timeliness when it comes to issuing an ROE. To avoid errors and miscommunications, make sure to collect all necessary information, including:

- Employee information: Name, Social Insurance Number (SIN), address, and occupation.

- Employment history: Dates of employment and interruption of earnings, as well as the reason for issuing the ROE (e.g., layoff, termination, leave, etc.).

- Earnings details: Insurable earnings and hours worked in every pay period within the last 53 weeks.

To maintain accuracy, it is essential to regularly update employee records and verify the information included in the ROE.

Navigating ROE Compliance: Mitigating Legal and Financial Risks

Non-compliance with ROE guidelines can result in several risks and penalties for employers. Firstly, employers could face administrative monetary penalties (AMPs) for non-compliance, which could range from $100 to $5,000, depending on the severity of the violation. Additionally, employers might be subject to fines or imprisonment under the Employment Insurance Act for intentional errors, false statements, or omission of information.

To mitigate these risks, employers must prioritize timeliness, accuracy, and transparency in issuing ROEs. Employers should also familiarize themselves with Service Canada guidelines, resources, and tools, like their ROE Web Support Centre, which assists in managing and completing electronic ROEs.

Conclusion

Navigating the intricacies of issuing a Record of Employment in Canada is crucial for employers to maintain trust and transparency with their employees. Understanding the purpose, importance, and various scenarios that trigger an ROE issuance, as well as the compliance requirements, can significantly improve the workplace environment. 

By focusing on accuracy, timeliness, and adherence to guidelines, employers can minimize legal and financial risks, ultimately fostering a constructive and supportive atmosphere that benefits both employees and the organization as a whole. Get in touch with our team at PayrollNorth for more information.