What should you do if an employee has an interruption of earnings?
An interruption of earnings happens when the employment ends or an employee leaves because of pregnancy, injury, illness, retirement, layoff, leave without pay, dismissal, adoption, or compassionate care leave.
When one of these situations occurs, you must issue a Record of Employment (ROE) to each former employees. Generally, if you are issuing an ROE electronically, you have five calendar days after the end of the pay period in which an employee's interruption of earnings occurs to issue it. If you are issuing a paper ROE, you have to issue it within five calendar days of the employee's interruption of earnings or the date you become aware of the interruption of earnings. However, special rules may apply.
If you know that the employee will not be coming back in the calendar year, we suggest you calculate the employee's earnings for the year to date and give the employee a T4 slip. Include the information from that T4 slip in your T4 return when you file it on or before the last day of February of the following year.
You may want to consult the List of Provincial and Territorial Ministries of Labour of your employee's province of employment to ensure you have met their requirements. If you are a federally-regulated employer, consult the Federal labour standards.
When the employee returns, you may have to recalculate a pension adjustment if the employee was contributing to a registered pension plan before they left. For more information, see the T4084, Pension Adjustment Guide.
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