Did you know?
If you submit electronic ROEs, you no longer need to provide a paper copy to your employees or send a copy to Service Canada. Employees can view their ROEs issued electronically by visiting My Service Canada Account. (Assumes all employees have a computer at home or easy access to a system and have set up their ‘Confidential’ My Service Canada Account).
Employers can register for ROE Web which is a user-friendly application and use the new ROE Web Assistant to guide you through the production of an electronic ROE.
Unfortunately, the end of summer is fast approaching, which means many employers will be saying goodbye to their student employees and seasonal workers. Most employers understand that they need to complete a record of employment (ROE) when an employee terminates, however, there are a number of unique occasions that also require the crowning glory of a ROE.
This article is simply a quick refresher on when employers will need to complete and file a record of employment (ROE) for an employee, and why it is critical to do so correctly. My goal here is not to provide detailed instructions about completing ROEs; rather, to simply highlight the importance of properly issuing them, and the potential legal responsibility attached to failing to do so.
The ROE is the form employers complete when an employee receiving insurable earnings stops working such that he/she experiences an interruption of earnings. Service Canada considers ROEs to be the single most critical document within the Employment Insurance (EI) Program.
Service Canada uses the information on the ROE to determine whether (a) a person is eligible to receive EI benefits, (b) what the benefit amount will be, and (c) for how long the benefits will be paid. We also use the ROE to ensure that no one misuses EI funds, or receives benefits in error. Service Canada keeps ROEs for 11 years, in accordance with the Access to Information Act, the Privacy Act, and Info Source. As an employer, you are required to issue a ROE each time one of your employees experiences an interruption of earnings.
When ROEs Are Required
As previously mentioned, ROEs are required in a wide variety of circumstances, not simply upon termination, or an employee’s voluntary departure from an organization, as outlined below.
An interruption of earnings occurs in the following situations:
- when an employee has had, or is anticipated to have, 7 consecutive calendar days with no work and consequently no insurable earnings from the employer (the “seven-day rule”);
- when an employee’s salary falls below 60% of his/her regular weekly earnings due to certain absences (illness, injury, quarantine, pregnancy, parental leave, compassionate care leave, or family responsibility leave); and
- when an employee starts receiving wage loss insurance payments.
In addition to the above interruptions of service, employers must complete ROEs under the following scenarios:
- when Service Canada requests a ROE for an employee;
- when an employee’s pay period type changes (e.g., weekly to bi-weekly);
- when an employee is transferred to another Canada Revenue Agency (CRA) payroll number;
- when there is a change in company ownership leading to a change in the employer;
- when the employer declares bankruptcy;
- when a part-time, on-call, or casual worker is no longer on the employer’s active employment list or has not done any work or earned any insurable earnings for 30 days; and
- when an employee is on a self-funded leave of absence.
The Importance of ROEs
There is not a great deal of litigation relating to ROEs, however, incorrectly completing (or failing to complete) a ROE has attracted common LEGAL LIABILITY for employers.
One type of case occurs when an employer intentionally misrepresents the reason for the interruption of service or withholds a ROE from a departing employee. Allegations of misconduct on a ROE can disqualify an employee from eligibility for EI. If the allegations are untrue, or if a ROE is withheld, the employer can be liable to the employee for the resulting loss of EI payments and potentially for additional damages for bad faith conduct in the direction of the employee.
Liability may also arise in cases where a ROE is used as evidence that a seasonal or fixed-term employee is, in fact, a permanent employee, and therefore entitled to common law notice.
Apparently, our courts have found that using the word “unknown” instead of “not returning” on a ROE for a seasonal worker indicated that the employment was permanent and that the seasonal return date was simply unknown at the time of the ROE completion. Likewise, failing to issue a ROE at the end of each of a series of fixed-term contracts has been strong evidence that an employee was a permanent employee.
While ROEs can be frustrating for some to prepare, it is imperative that employers keep track not only of when they need to be issued, but to also ensure that they are completed efficiently, in a timely fashion, and most importantly accurately.
For detailed direction and information on obtaining and efficiently preparing ROEs, either in paper or web form, please refer to the CRA’ helpful guide.