Guidelines for Contract Workers Who Do Not Receive Payments on a Regular Basis

This section provides information to employers on the way they would need to complete certain blocks on the Record of Employment (ROE). This information pertains to contract workers who do not receive payment on a regular basis.

Who is a Contract Worker?

The authorities consider a contract worker to be an employee employed in insurable employment. This employee will typically work for the employer under a fixed-term contract. As such, this individual would not receive payments on a regular basis. These contract workers could typically include:

• Employees with irregular pay periods

• Employees who perform piece work and,

• Employees who receive lump sum payments rather than regular pay cheques

Block 6: The Pay Period Type

In Block 6, the employers would need to enter ‘Weekly’ as the pay period type.

Block 10: The First Day Worked

In this block, the employers would need to enter the contract start date. In some cases, the employers might find that the employee previously experienced an interruption of earnings during this contract. As such, it is likely that the employers might have issued the Record of Employment (ROE) to this employee. In this scenario, the employers would need to enter the first day the employee returned to work after they had issued the previous Record of Employment (ROE).

Block 11: The Last Day for Which Paid

In Block 11, the employer would need to enter the contract end date. Alternatively, the employer would need to enter the last day of insurable employment. This is especially so in case the employer is issuing the Record of Employment (ROE) for another reason (such as maternity leave) that begins before the end of the contract.

Block 12: The Final Pay Period Ending Date

In Block 12, the employer would need to enter the date of the Saturday of the week in which the date the employer has specified in Block 11 falls.

Block 15A: The Total Insurable Hours

In some cases, the employer might be aware of the number of hours that the contract worker actually worked for. As such, the employer will probably be aware of the amount that the contract worker received for the hours worked. In this scenario, the authorities would consider the hours that the contract worker worked for to be insurable hours. For instance, consider a situation where a contract worker has an employment contract. The contract specifies 32 hours as the usual hours of work per week. In this case, the employer would need to credit the contract worker with 32 insurable hours per week.

In some cases, the employer might not be aware of the actual number of hours worked. In this case, the employer and the contract worker would need to reach an agreement on the number of insurable hours that the worker would normally have required to put in for earning the remuneration paid. It is worth mentioning that the hours agreed upon would need to be reasonable given the circumstances of the employment.

However, it is possible that in some cases no contract or agreement on hours exists. In addition, it is possible that the employer and the contract worker might not be able to reach an agreement on the contract or hours. In this case, employers would need to determine the number of insurable hours by dividing the insurable earnings by the applicable minimum wage for the province or territory where the employee is working. It is worth mentioning that the applicable minimum wage for the province or territory would need to be in force as on January 01 in the year the earnings were payable. It is also worth highlighting that the result cannot be more than seven hours per day or 35 hours per week.

How to Use the Weekly Averaging Formula

Employers will need to carry out certain calculations for entering the amounts in Blocks 15B and 15C. For this, they would need to use the weekly averaging formula. The weekly averaging formula typically comprises the following three steps:

• Adding up all the insurable earnings that the employee has received in the previous 52 weeks (or in the actual number of weeks worked, if fewer)

• Subtracting any insurable amounts the employee received because of the separation (for more details, employers would need to go through ‘Block 17: The Separation Payments’)

• Dividing these insurable earnings by 52 (or by the actual number of weeks worked, if fewer)

  • It is worth mentioning that this amount constitutes the average weekly earnings

Block 15B: The Total Insurable Earnings

Employers would need to determine the amount that they would need to enter in Block 15B for contract workers. For this, they would need to calculate the average weekly earnings the employee received. They would need to use the weekly averaging formula for accomplishing this. Once they have calculated the average weekly earnings, they would need to multiply the amount obtained by 27 (or less in case the period of employment is shorter than 27 weeks). Lastly, the employers would need to add any insurable amounts the employee received on account of the separation. For more details on this, the employers would need to go through ‘Block 17: The Separation Payments’. The amount resulting from these calculations is the employee’s total insurable earnings.

For instance, consider a situation where Martin worked for an employer on a contractual basis. He worked for a span of 48 weeks until his contract ended. In this situation, the employer will need to complete the Record of Employment (ROE) for Martin. To complete Block 15B, the employer would need to use the weekly averaging formula as demonstrated:

• The employer would need to add up all of the insurable earnings that Martin received during the 48 weeks of the contract, to arrive at a figure of $64,195.28

• Martin did not use all of his vacation pay

  • As such, the employer would need to pay him the remaining $2,450 due to Martin because of the separation

  • Therefore, the employer would need to subtract this mount from the total insurable earnings i.e. $64,195.28 – $2,450 = $61.745.28

• For calculating the average weekly earnings, the employer would need to divide these insurable earnings by 48 weeks i.e. $61,745.28 / 48 = $1,286.36

  • Therefore, the employer would list Martin’s average weekly earnings as $1,286.36

Similarly, for calculating the amount that the employer will need to enter in Block 15B, the employer would need to:

• Multiply the weekly average earnings by 27 i.e. $1,286.36 x 27 = $34,731.72

• Add any payments the employee received on account of the separation

  • In this case, Martin’s employer would need to add the vacation pay that Martin received i.e. $34,731.72 + $2,450 = $37,181.72

• Finally, the employer would need to enter the figure of $37,181.72 in Block 15B

Block 15C: The Insurable Earnings by Pay Period

For contract workers, employers would only need to complete Block 15C if they are issuing the Record of Employment (ROE) electronically. For completing Block 15C, employers would need to use the average weekly earnings amount they calculated for Block 15B. This would enable them to complete all the applicable pay period fields in Block 15C, with the sole exception of PP 1 (the final pay period). In the PP 1 field, the employers would need to add any insurable amounts that the employee received because of the separation to the average weekly earnings amount.

For instance, consider the example of Martin given earlier. His employer completes Block 15C on Martin’s Record of Employment (ROE) as follows:

• PP 1 – The final pay period i.e. $1,286.36 in average weekly earnings plus $2,450 in vacation pay

• PP 2 through 48 – The full pay periods, with each having $1,286.36 in average weekly earnings