If you manage a team in Canada, you have likely asked yourself, “What is a Record of Employment (ROE) and why is it so critical for my business?” Simply put, a Record of Employment (ROE) is a form employers must file with Service Canada whenever an employee stops working or has an interruption in earnings. It is widely considered the most important document in the Canadian payroll system.
Without it, an employee cannot access Employment Insurance (EI) benefits. The government uses it to track exactly how much a person worked and what they were paid. As an employer, you have a legal duty to file this accurately and on time. Failing to do so can lead to frustrated staff and actual government fines. It is a small task that causes big problems if ignored.
Understanding a Record of Employment (ROE)
In simple terms, an ROE is a snapshot of an employee’s history with your company. It tracks their insurable earnings and the total number of hours they worked over a specific period. Service Canada uses this data to decide if a person is eligible for benefits and how much money they should receive each week.
Every ROE has a “reason code” that explains why the person is no longer working. Whether they were laid off, quit, or went on maternity leave, the code tells the government the story. It isn’t just a piece of paper. It is a legal record that connects your payroll data to the federal social safety net.
When Is a Record of Employment Required?
You don’t just issue these at the end of the year. You have to issue an ROE any time an employee experiences an “interruption of earnings.” This usually happens when an employee stops working and has had or is anticipated to have seven consecutive days with no work and no insurable earnings from your company.
Common triggers include:
- Layoffs or end of contract.
- Resignations or terminations.
- Pregnancy or parental leave.
- Sick leave or long-term disability.
- Moving from a full-time role to a freelance or contractor status.
Basically, if the paychecks stop for more than a week, the government expects an ROE to be filed.
How Do Employers Issue a Record of Employment?
Handling this document involves a specific workflow. Here is a look at the process of how employers issue an ROE.
1. Gathering the Payroll Data
First, you have to pull the numbers. You need the total insurable earnings and the exact number of insurable hours worked in the last 53 weeks (or since the last ROE was issued). If your payroll software isn’t synced, this part usually involves a lot of manual double-checking.
2. Choosing the Correct Reason Code
Every departure needs a letter code. For example, Code A is for a shortage of work, while Code E is for a resignation. Picking the wrong letter can trigger an investigation or cause the government to deny an employee’s claim, so you have to be precise.
3. Submitting via ROE Web
Most businesses use the Service Canada ROE Web portal. You can either manually type in the details or upload a file directly from your payroll system. Once you hit submit, the government gets it instantly, and you get a serial number as proof that you filed it.
4. Distributing the Copies
If you file electronically, you don’t actually have to give a paper copy to the employee. They can see it in their own Service Canada account. However, if you are one of the few still using paper forms, you have to mail the original to the government and give a copy to the employee by hand.
Why Getting the ROE Right Matters
Precision is vital because mistakes can have heavy consequences. Here are the main reasons why getting the ROE right matters for your business.
- Prevents Benefit Delays: Errors on the form can freeze an employee’s income for weeks while Service Canada investigates the discrepancy.
- Avoids Government Penalties: Filing late or providing false information can lead to fines of up to $2,000 or even legal trouble in extreme cases.
- Reduces Administrative Burden: Filing an incorrect form often means spending hours on the phone with government agents to fix the mistakes.
- Ensures Legal Compliance: Keeping accurate records is a requirement under the Employment Insurance Act, and messy filings are a major red flag for audits.
Conclusion
Understanding what a Record of Employment is helps you stay compliant and keeps your employees protected. Ultimately, a Record of Employment (ROE) is the primary tool Service Canada uses to determine EI eligibility. You have to be precise with your dates, your earnings, and your reason codes to avoid headaches down the road.
If you find Canadian labor laws or cross-border payroll confusing, you don’t have to manage it by yourself. HR Options offers a dedicated partnership to handle your complex HR and payroll needs so you can focus on growing your business.
Frequently Asked Questions
What is ROE used for?
Service Canada uses the ROE to figure out if a person qualifies for Employment Insurance. It helps them calculate exactly how much money the person should get and for how long.
How do I get my ROE in Canada?
You can usually find it by logging into your “My Service Canada Account” online. Most employers send them electronically now, so you don’t have to wait for a paper copy in the mail.
What does ROE stand for in employment?
In the world of Canadian payroll, it stands for Record of Employment. It is the official document that tracks your work hours and pay for the government.
