Record of employment (ROE)

In an asset sale, staff may move from the seller’s payroll to the buyer’s on closing day. If they leave the seller’s payroll, the seller needs to work out whether an interruption of earnings has occurred for each employee, because that is what calls for an ROE. Where one has, the seller, as the employer, is the one required to issue it, which makes the timing a closing-day item.

How it works

Service Canada says employers can produce ROEs online through ROE Web instead of on paper forms. The CRA’s employers’ guide says to prepare an ROE when an employee stops working and has an interruption of earnings, and to record the correct Social Insurance Number on it. It warns that failing to provide a correct ROE can lead to a fine, imprisonment, or both. The guide also says to issue an ROE to each former employee, and that a different deadline may apply to a paper ROE than to an electronic one.

What to ask

• Which employees leave the seller’s payroll at closing, and on what date
• Who will issue each ROE, and whether the seller uses ROE Web or a payroll provider
• Whether any employee had an interruption of earnings before closing

See how to handle payroll on closing day when you buy a business. A payroll account is the CRA account the same payroll runs under.