Record of Employment (ROE) in Canada: codes, deadlines and how to file

What a Record of Employment is

A Record of Employment, or ROE, is the form an employer files whenever an employee stops earning. It records who the person was, how long they worked, what they earned in insurable hours and dollars, and why the employment ended.

It goes to Service Canada, not to CRA. That trips up a lot of owners, because almost everything else in payroll is a CRA matter. Service Canada uses the ROE to determine whether the person qualifies for Employment Insurance, what their weekly benefit will be, and how many weeks they can claim. It is also the single most common reason an EI claim stalls.

You file one whether or not the employee asks for it, and whether or not you think they will claim EI. That decision is not yours to make.

What counts as an interruption of earnings

The trigger is not resignation or dismissal specifically. It is an interruption of earnings, which happens in two situations.

The first is the seven-day rule. An interruption occurs when an employee has seven consecutive calendar days with no work and no insurable earnings from you. That covers quitting, dismissal, a layoff, the end of a contract, and the end of a season.

The second has no waiting period. If an employee’s weekly earnings drop below sixty per cent of their normal weekly earnings because of illness, injury, quarantine, pregnancy, caring for a newborn or newly adopted child, or providing care to a critically ill family member, that is an interruption of earnings straight away.

The deadlines are shorter than most employers expect

If you file electronically through ROE Web, you have five calendar days after the end of the pay period in which the interruption occurred. Note what that is measured from: the end of the pay period, not the employee’s last day. Monthly and thirteen-pay-period payrolls follow a different rule, so check your own case.

Paper ROEs are tighter. They are due within five calendar days of the interruption of earnings itself.

Electronic filing has one practical advantage worth knowing. The ROE goes straight to Service Canada, so you do not have to give the employee a copy, and there is nothing for them to lose or forget to submit.

ROE codes (Block 16): the reason for issuing

Block 16 is where you state why the employment ended, using a code set by Service Canada. It matters more than any other field, because some codes lead Service Canada to investigate before paying benefits. Coding a layoff as a quit, or a quit as a dismissal, can delay or deny someone’s claim and can bring questions back to you.

The codes used most often are these.

Code K is a last resort, not a shortcut. Using it obliges you to explain the circumstances, and an unexplained K invites a call from Service Canada.

Where the numbers usually go wrong

The two fields that cause the most trouble are insurable hours and insurable earnings. Both have to reflect what was actually insurable, which is not always the same as what you paid. Vacation pay, statutory holiday pay, and severance are all reported, but in specific blocks and on specific rules, and getting them into the wrong field changes the benefit calculation.

The other frequent error is the final pay period date, particularly when someone leaves partway through a period. If the ROE says the employment ended on a date your payroll records contradict, the claim stops while it is sorted out.

This is one of the arguments for having payroll and bookkeeping in the same system. When the ROE is produced from the same records that ran the payroll, the insurable figures reconcile by construction. If your payroll lives in one place and your books in another, someone has to reconcile them under a five-day deadline.

What happens if you file it late, or not at all

The employee’s EI claim does not start until Service Canada has the ROE, so a late one costs a former employee real money in the weeks after they lose their income — and they know who to blame. Under the Employment Insurance Act, an employer who fails to issue an ROE, or knowingly files a false one, can be fined up to $2,000, imprisoned for up to six months, or both. In practice Service Canada starts with a phone call and a request to correct it; the fine is for employers who do not.

Keeping records

Keep your copy, and the payroll records behind it, for six years. Service Canada can ask for supporting detail well after a claim, and an employee can request a copy of a past ROE.

If you are incorporated: make the ROE a by-product of payroll

Every field on an ROE is already in a properly run payroll: insurable hours, insurable earnings by pay period, the final pay period date, vacation pay paid out. When the same system runs the pay and produces the slip, the ROE is a two-minute job inside the five-day window instead of a reconstruction.

taxifi payroll is $49 a month plus $10 per employee: pay runs on your schedule, CPP, EI and income tax calculated, CRA remittances sent on time, T4s at year-end, and the Record of Employment filed through ROE Web when someone leaves. If you are hiring for the first time, start with hiring your first employee and opening a CRA payroll account. Ottawa-based, serving all of Ontario — see our small business accountant in Ottawa page or published prices.

This is general information, not advice for your situation. Get started and a Canadian accountant will give you the answer for your business.

Want payroll and the slips handled? See payroll services, small business payroll, or outsourced payroll.