Employee who is leaving (issuing a Record of Employment)

You may be looking for:

• Payments from a supplementary unemployment benefit plan

You may have employees who stop working for you because of layoff, retirement, resignation or dismissal or who have an interruption of earnings as a result of pregnancy, illness, leave without pay, adoption or compassionate care leave. In all of these situations, you must issue a Record of Employment (ROE).

You may want to consult the Provincial and territorial employment standards of your employee's province of employment to make sure you have met their requirements. If you are a federally regulated employer, consult Federal labour standards.

On this page

• Steps
• References

Steps

1. How to calculate insurable hours

   Hours of work are used to determine if workers are entitled to employment insurance (EI) benefits and for how long. If your employee leaves or there is an interruption of earnings, you must report these hours on a ROE.

   How you determine the number of insurable hours varies depending on the terms of the employee’s employment in the situations below:

   Situations

   Situation: Your employee is paid hourly

   When your employee is paid hourly, the number of insurable hours is the number of hours actually worked and paid.

   Situation: Your employee is not paid hourly

   These are situations where the worker receives a fixed weekly, monthly, or annual salary, and also includes workers paid by commission or remunerated on a piecework basis.

   When your employee is not paid hourly, if you (as the employer) know the number of hours that the employee actually worked and for which they were paid, the number of insurable hours is the number of hours that your employee actually worked was and paid for.

   If you (as the employer) do not know the actual number of hours worked, you must use one of the following to determine the number of insurable hours:

   • You and the employee can agree on the number of insurable hours of work for which they are paid as part of their contract. For example, an agreement on hours based on the value of piecework would determine the number of insurable hours in that situation
   • If there is no agreement or you cannot reach an agreement, the insurable hours are determined by dividing the insurable earnings by the minimum wage. The result cannot be more than 7 hours per day or 35 hours per week
   Situation: Your employee's hours are limited by federal or provincial statutes or regulations

   If your full-time employee is limited by federal or provincial law or regulations to less than 35 hours per week, they will be credited with insurable hours of 35 hours per week. A part-time employee in this situation will be credited with a proportionate number of hours.

   Situation: The employee is a full-time member of the military or police

   If the employee is a full-time member of the Canadian Forces or a police force, their insurable hours will be 35 insurable hours, unless the military or police force (employer) keeps and provides the actual number of hours worked.

   This does not apply to Sûreté du Québec (SQ) Officers, as their employment is not insurable.

   Situation: Your employee works overtime hours

   If your employee works overtime hours, each hour of overtime work is treated as one hour of insurable employment. This is the case even if the rate of pay is higher.

   Where your employee accumulates overtime hours and they are paid for them at a later date (or on termination of their employment), the hours of insurable employment are the actual hours worked and not the hours accumulated at a rate greater than the regular one.

   Situation: Your employee is called in to work

   If your employee is called in to work, the insurable hours will be the number of hours paid.

   Situation: Your employee is paid for stand-by hours

   If your employee is paid for stand-by hours, they are insurable if one of the following applies:

   • The stand-by hours are paid at a rate equal to or above the rate paid for the hours your employee would have worked
   • Your employee is present at your (the employer)'s premises, waiting for you, as the employer, to request their services, as required under a contract of employment, and these hours are paid, regardless of the rate paid

    

   Situation: Your employee is paid for a public holiday

   If your employee is paid for work on a public holiday, each hour of work is treated as one hour of insurable employment. This is the case even if the rate of pay is higher.

   When a public holiday is paid in straight time and your employee does not work on the holiday, the insurable hours are the hours your employee would normally have worked.

   Situation: Your employee is on paid leave

   If your employee is on paid leave (vacation, paid sick leave or compensatory time off), the insurable hours are the number of hours that they would normally have worked and for which they were paid.

   Situation: Your employee is paid remuneration with no hours attached

   No insurable hours are generated when the following amounts are paid:

   • Vacation pay without actually taking any leave
   • Bonus payments
   • Gratuities
   • Pay in lieu of termination notice
   • Advance payments of salary or wages
   • Incentive payments
   • Payments for long service
   • Awards
   • Four over five plans (year or period of non-work)
   • Pay equity payments
   • Retroactive pay

   Learn more about determining the number of insurable hours: Insurable hours

2. Report your employee's insurable hours on a ROE

   You can issue your employee’s ROE using Service Canada’s online ROE web service, your payroll provider’s ROE Secure Automated Transfer, or complete a paper ROE.

   If you issue your employee’s ROE electronically, you must do so within five calendar days after the end of the pay period in which your employee’s interruption of earnings occurs. A different deadline may apply when filing on paper.

   For more information on how to complete and issue the ROE, see Service Canada's guidance: Employers: How to complete the record of employment (ROE) form

   Employers who fail to issue a ROE to their employees as required are subject to a fine up to $2,000, prison for up to six months, or both.

3. Report the amounts paid on a T4 slip

   If you know that your employee will not be returning to work with you in the calendar year, you have to calculate the employee’s income and the amounts of CPP contributions, EI premiums and income tax deducted and give your employee their T4 slip. The T4 slip must be included in your T4 return when you file it on or before the last day of February in the following year.

   You must report the following amounts on your employee's T4 slip:

   • Box 14 – Employment income
   • Box 24 – EI insurable earnings
   • Box 26 – CPP/QPP pensionable earnings
   • Any applicable codes for taxable benefits

   Learn more: T4 slip – Information for employers

References

Legislation