Canadian HR Reporter

CANADIAN HR REPORTER May 29, 2017 14 FEATURES PAYROLL Will payroll's future include ROEs? Government report recommends using real-time payroll data instead By Sheila Brawn T here may come a day when payroll departments no longer have to complete and submit Records of Employ- ment (ROEs). Instead, Service Canada would use real-time information from employers' payroll systems to determine if an employment insurance (EI) claimant was eligible for benefits. at vision may become a reality if the federal government adopts a recommendation made in Febru- ary in a report by a Parliamentary panel reviewing the quality of ser- vice the EI program provides. e government launched the review last year to find out how EI could better serve Canadians. In the Employment Insurance Service Quality Review panel's report, called Making Citizens Central, the panel recommends Service Canada work with key stakeholders to co-create a real- time payroll information-sharing solution. "e 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," says the report. "If Service Canada found a new way to capture the needed payroll information and discontinued the need for employers to produce the ROE, the reporting burden for employers will be lessened, meaning that they will be able to spend more time devoted to their business and less time filling out forms to satisfy the administrative requirements of the program." 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 Devel- opment Canada (ESDC), the de- partment responsible for admin- istering the ROE through Service Canada, says the form is the most important in the EI program. "Each year, more than one mil- lion Canadian employers fill out more than nine million ROE forms for their employees," it states. On the form, employers report the employee's insurable earnings and hours, using pay period infor- mation, as well as the reason for the interruption of earnings. Ser- vice Canada uses the data to de- termine whether a claimant quali- fies for EI benefits, how much he will receive, and the length of time the benefits will last. During the consultations, the Canadian Payroll Association (CPA) told the panel the reporting requirements, which are based on weekly Sunday-to-Saturday insur- able earnings, are complicated and time-consuming. "Much of the data required for the EI program must be allocated and/or estimated from payroll data to conform to weekly require- ments," it says in its submission. "is 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." e panel says one reason for complex reporting is the EI sys- tem itself is complicated. "Unfortunately, changes to policy and program requirements have resulted in a complex pro- gram with a difficult-to-navigate process (for example, complicated applications, forms and reporting processes) and difficult-to-under- stand nuances such as severance pay or reasons for separation," says the report, adding the Service Canada guide explaining how to complete the one-page ROE is 60 pages long. Another complaint about the ROE was employers have to complete the form regardless of whether an individual plans to apply for EI benefits. "e 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 actual EI claims, and that it is un- reasonable for the government to require employers to spend staff resources completing and sub- mitting them. is burden has an impact on their economic perfor- mance," states the report. A lack of resources on the fed- eral government's end also makes the employer reporting system challenging, says the report. "This complexity has been compounded by insufficient re- sources to keep up with process- ing demands, and an out-of-date technology platform that is over 40 years old," it says, despite the fact employers can submit paper ROEs or use an electronic version. "e result is a processing sys- tem that often requires a high degree of human intervention, resulting in delays in processing and delays in citizens receiving EI benefits." Switching to real-time payroll information would help resolve these issues, says the report. "For Canadians, a real-time payroll information-sharing solu- tion will allow for accurate, high- quality information to be shared between employers and Service Canada. is will simplify the ap- plication process for applicants, 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 reconsidera- tions. ere will also be decreased burden on Canadians as many program requirements, such as having to self-report while on claim, will be done automatically. e overall result will be better and faster service to Canadians." e 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 legisla- tive 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 accurate and timely information to enable Service Canada staff to process their claims, adjudicate the claims and calculate any eligible benefits on a more accurate and timely ba- sis," she says. "We also believe that a well-constructed, real-time pay- roll solution will eliminate most if not all of the requests for payroll information." Service Canada may send a Re- quest for Payroll Information form to employers when it is reviewing an individual's EI claim. It requires employers to report weekly earn- ings on a Sunday-to-Saturday basis, regardless of whether they have a weekly payroll. e report often asks for in- formation that is months or even years old, requiring employers to undertake the time-consuming task of hunting down the data for individuals who may no lon- ger work there and manipulating it to fit into the required weekly Sunday-to-Saturday format, says De Grâce. During the consultations, the Canadian Federation of Indepen- dent Business called for eliminat- ing the ROE in favour of a system that uses current payroll data. e 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 collected via em- ployer payroll systems on an 'as required' basis." In working towards a real-time payroll information solution, the report Making Citizens Central points out the need to be cautious. "Before moving forward with such an electronic payroll infor- mation service, all perspectives would have to be considered, as it may place an undue technological burden on small and medium- sized enterprises, which would need to be fully understood and addressed." It suggests the government work with employer and em- ployee associations, payroll ser- vice providers, payroll software vendors, and bargaining units to create the new system, then pilot test it with both large and small employers in the next three years. In addition to raising the need for technological improvements, it raised concerns about a number of other issues affecting the qual- ity of EI services, including the ac- cessibility of services, wait times for services and benefits, and dif- ficulty communicating with Ser- vice Canada and understanding EI program requirements. Sheila Brawn is editor of Canadian Payroll Reporter. For more informa- tion, visit www.payroll-reporter.com. Credit: DayOwl (Shutterstock) ORDER YOUR COPY TODAY! Visit carswell.com or call 1.800.387.5164 for a 30-day no-risk evaluation THE MOST COMPLETE DIRECTORY OF ONTARIO LAWYERS, LAW FIRMS, JUDGES AND COURTS Ontario Lawyer's Phone Book is your best connection to legal services in Ontario with more than 1,400 pages of essential legal references. You can depend on the accuracy of this trusted directory that includes the most up-to-date names, phone numbers, mailing addresses and emails so you don't have to search anywhere else. More detail and a wider scope of legal contact information for Ontario: • Over 26,800 lawyers listed • Over 8,500 law firms and corporate offices listed • Fax and telephone numbers, e-mail addresses, office locations and postal codes Includes lists of: • Federal and provincial judges • Federal courts, including a section for federal government departments, boards and commissions • Ontario courts and services, including a section for provincial government ministries, boards and commissions • Small claims courts • The Institute of Law Clerks of Ontario • Miscellaneous services for lawyers NEW EDITION Perfectbound Published December each year On subscription $82.50 One time purchase $86 L7796-5932 Multiple copy discounts available Plus applicable taxes and shipping & handling. (prices subject to change without notice) ONTARIO LAWYER'S PHONE BOOK 2017

• Cover