Canadian Payroll Reporter

2 News "The Panel heard during their consultations with stakeholders that EI reporting requirements, particularly the ROE, are one of the top burdens for employers, and wondered if there is a better solution to capture the informa- tion needed," the report says. "If Service Canada found a new way to capture the needed payroll information and discon- tinued the need for employers to produce the ROE, the report- ing burden for employers will be lessened, meaning that they will be able to spend more time de- voted to their business and less time filling out forms to satisfy the administrative requirements of the program," it adds. By law, employers must com- plete and submit an ROE to Ser- vice Canada when an employee who is receiving insurable earn- ings stops working and has an in- terruption of earnings. Employers must also provide an ROE when- ever Service Canada requests it. Employment and Social De- velopment Canada (ESDC), the department responsible for ad- ministering the ROE through Service Canada, says the form is the most important document in the EI program. "Each year, more than 1 million Canadian employers fill out more than nine million ROE forms for their employees," it states. On the form, employers re- port the employee's insurable earnings and hours, using pay period information, as well as the reason for the interruption of earnings. Service Canada uses the data to determine whether a claimant qualifies for EI benefits, how much he or she will receive, and the length of time the ben- efits will last. During the consultations, the Canadian Payroll Association (CPA) told the panel that the re- porting requirements, which are based on weekly Sunday to Satur- day insurable earnings, are com- plicated and time consuming. "Much of the data required for the EI program must be al- located and/or estimated from payroll data to conform to weekly requirements," it said in its submission. "This requires significant man- ual data accumulation, manipula- tion, preparation, reconciliation, reporting, and consultations by both employers and government representatives since only 18 per cent of payrolls are produced on a weekly basis and three per cent or less are produced on a Sunday to Saturday basis," it added. The panel says one reason for complex reporting is that the EI system itself is complicated. "Un- fortunately, changes to policy and program requirements have re- sulted in a complex program with a difficult-to-navigate process (e.g. complicated applications, forms, and reporting processes) and difficult-to-understand nu- ances such as severance pay or reasons for separation," the re- port says. It notes that even the Service Canada guide explaining how to complete the one-page ROE is 60 pages long. Another complaint about the ROE that the panel heard was that employers have to complete the form regardless of whether an individual plans to apply for EI benefits. "The Canadian Payroll Asso- ciation points out that 6.2 million (70 per cent) of the nine million ROEs produced annually, each of which contains 53 detailed data elements, are never used for ac- tual EI claims and that it is unrea- sonable for the Government to require employers to spend staff resources completing and sub- mitting them. This burden has an impact on their economic perfor- mance," states the report. A lack of resources on the federal government's end also makes the employer reporting system challenging, the report notes. "This complexity has been compounded by insuffi- cient resources to keep up with processing demands and an out- of-date technology platform that is over 40 years old," it says. This is despite the fact that employers can submit paper ROEs or use an electronic version. "The result is a processing system that often requires a high degree of human intervention, resulting in delays in processing and delays in citizens receiving EI benefits," the report adds. Switching to real-time payroll information would help resolve these issues, the report states. "For Canadians, a real-time pay- roll information-sharing solu- tion will allow for accurate, high- quality information to be shared between employers and Service Canada. This will simplify the application process for appli- cants, improve the timeliness of benefits, and decrease financial hardship on Canadians who rely on their EI benefits," it says. "It will also increase the accu- racy of EI processing, resulting in fewer mistakes and recon- siderations. There will also be decreased burden on Canadians as many program requirements, such as having to self-report while on claim, will be done au- tomatically. The overall result will be better and faster service to Canadians," it adds. The CPA says it is pleased with the report. "We're looking at this as a once-in-a-generation op- portunity to bring forth true EI reform," says Rachel De Grâce, manager of advocacy and legis- lative content at the association. "We see this as an opportunity not only for employers to benefit from decreased administrative and regulatory requirements and burden, but the EI claimant will benefit by having more ac- curate and timely information to enable Service Canada staff to process their claims, adjudicate the claims and calculate any eli- gible benefits on a more accurate and timely basis," she adds. "We also believe that a well- constructed real-time payroll solution will eliminate most if not all of the requests for payroll information," De Grâce says. Service Canada may send a Request for Payroll Information form to employers when it is reviewing an individual's EI claim. It requires employers to report weekly earnings on a Sunday to Saturday basis regardless of whether they have a weekly payroll. De Grâce says the report of- ten asks for information that is months or even years old, re- quiring employers to undertake the time-consuming task of hunting down the data for indi- viduals who may no longer work there and manipulating it to fit into the required weekly Sunday to Saturday format. The CPA is not the only as- sociation that has called for the ROE to be replaced. During the consultations, the Canadian Federation of Independent Busi- ness recommended eliminating the ROE in favour of a system that uses current payroll data. The Retail Council of Canada also told the panel, "Canada needs a modernized system comparable to the United States and the U.K. where data is col- lected via employer payroll sys- tems on an 'as required' basis." In working towards a real-time payroll information solution, the report points out the need to be cautious. "(B)efore moving forward with such an electronic payroll information service, all perspectives would have to be considered, as it may place an undue technological burden on small and medium-sized enter- prises, which would need to be fully understood and addressed." It suggests that the govern- ment work with employer and employee associations, payroll service providers, payroll soft- ware vendors, and bargaining units to create the new system and then pilot test it with both large and small employers with- in the next three years. The panel also heard from other associations, labour or- ganizations, citizens, EI clients, and Service Canada staff during the consultations. In addition to raising the need for technological improve- ments, they raised concerns about a number of other issues affecting the quality of EI servic- es, including the accessibility of services, wait times for services and benefits, and difficulty com- municating with Service Canada and understanding EI program requirements. Other recommendations in Canadian HR Reporter, a Thomson Reuters business 2017 March 2017 | CPR ROEs described as 'top burden' for employers from PAYROLL on page 1 continues on page 7 "We're looking at this as a once-in-a-generation opportunity to bring forth true EI reform."

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