Policies and Procedure

And how to avoid them

By Janet Spence, CPM

The Record of Employment (ROE) provides the most important information for the Employment Insurance (EI) program and is used to process EI benefits, determine claim duration, payment rates and entitlements.  

An ROE must be issued by an employer when an employee has an interruption of earnings of seven consecutive calendar days, or in the case where their salary falls below 60 per cent of regular weekly earnings as a result of illness, injury,

quarantine, pregnancy or caring for a young child or seriously ill family member. Given the importance of the information provided on the ROE and the implications for EI benefits payments, it is critical that employers provide accurate and timely information to the federal government.

To improve the efficiency and effectiveness of ROE administration, the Canadian Payroll Association (CPA) advocated on behalf of employers to influence the change in Regulation 19(3) to enable employers to submit electronic ROEs within five days at the end of the payroll period. The CPA also worked very closely with Service Canada in the transition of electronic ROEs, which now accounts for 88 per cent of all ROEs submitted. Using electronic ROE Web or ROE Secured Automated Transfer (SAT) reduces administrative burden for employers and also facilitates more efficiencies for the government through the processing of EI claims.

One of the challenges facing Service Canada is the errors made in the completion of ROEs. Employers are reminded of the importance of providing accurate information, given its impact on the payment of benefits to claimants and the implications this can have for over and under payments. According to Service Canada, the top five common errors on the ROE, and how to avoid them, are as follows:

Error #1: Block 15C – Insurable earnings by pay period incorrect

The number of consecutive pay periods entered in Block 15C must equal the period of employment. The employer must provide the payroll data for the required number of pay periods for the period of employment. The period of employment is determined by Pay Period Type selected in Block 6 and dates entered into Blocks 10, 11 and 12.

For example, on an electronic ROE, if the Pay Period Type in Block 6 is “weekly,” the maximum number of most recent consecutive pay periods to be completed in 15C is 53 pay periods.

Error #2: Block 17A – Vacation pay incorrect

Any vacation pay the employer has paid or will pay to the employee because of the separation must be entered in this block and must accurately reflect the correct amount.

Error #3: Block 15B – Total insurable earnings incorrect

Block 15B must contain all insurable earnings the employee received, not just the EI maximum insurable earnings amount.

In order to correctly calculate the amount in Block 15B, employers must first determine the number of consecutive pay periods to use and which earnings are insurable. Once those are determined, the employee’s total insurable earnings must be calculated.

Error #4:  Block 11 – Last day for which paid incorrect

The last day for which the employee received insurable earnings must be entered in Block 11. This date usually coincides with the last day of work; however, in some cases, employees continue to receive insurable earnings after their last day of work. This occurs with paid leave, such as vacation or sick leave, earned days off or salary continuance. In these cases, enter the date of the last day of paid leave in Block 11, making sure that date is not a statutory holiday.

Error #5: Block 6 – Pay period type incorrect

In Block 6, employers must enter the pay period type for the employee. There are five standard types of pay period: weekly, biweekly, semi-monthly, monthly or 13 pay periods a year. If semi-monthly or monthly pay periods are non-standard (that is, they do not end on the 15th or the last day of the month), then “non-standard semi-monthly” or “non-standard monthly” should be entered in this block.

An ROE should only reflect one pay period type. If an employer changes their pay period type during an employee’s period of employment, an ROE should be issued for the period of employment up to the change in pay period type. If there is an interruption of earnings later, a second ROE should be issued for the rest of the employee’s period of employment until the interruption of earnings. On the second ROE, in Block 10, enter the date of the first day after the pay period change, and in Block 11, enter the last day for which paid.

Errors cause inconveniences for employers and delays for employees. It is the employer’s responsibility to understand how to complete ROEs correctly and ensure compliance with the legislation even if your service provider is facilitating the processing of an employer’s ROEs.  Fewer calls will save employers time and money, and ensure employee’s claims are processed efficiently and effectively. 


 

Janet Spence, CPM is the manager, Compliance Services and Programs at the Canadian Payroll Association.