How to handle employee offboarding

As your business grows and changes, employees may resign, be dismissed, or take a leave of absence. In this FAQ, you will learn how to offboard and place employees on leave in Canada.

Skip to the section for employees taking a leave of absence or unpaid leave: Click Here
Skip to the section for employees who have resigned or have been terminated: Click Here

Navigate to Employment Status

  1. Click Payroll
  2. Click Employees
  3. Select an Employee's Name
  4. Select Employment Status

Leave of absence

If an employee is taking unpaid leave, which is typically a leave of more than 7 days with intent to return to employment with your business, then you will need to place the employee on leave.

To begin placing an employee on leave, navigate to Employment Status as outlined above and select Place on Leave.

Before placing your employee on leave, you will need to know the employee's:

  • Last day worked
  • Date of return
  • Reason for leave

After choosing the last date of work and date of return (if known), Wave will calculate the following fields based on past approved payrolls and any relevant future payroll periods:

  • Final pay period (last payroll period that this employee is active)
  • Payday deadline (Wave recommends you to pay this employee by this date to stay fully compliant with the CRA)
  • Record of Employment (ROE) deadline (Wave recommends you to issue the ROE by this date to stay fully compliant with the CRA)

After confirming the leave of absence, you'll be redirected to the employee's modified Employment Status. Click here to skip to the final task list of offboarding an employee.


Offboarding a terminated or resigned employee

If an employee is resigning, being dismissed with cause, or being dismissed without cause then you will need to offboard your employee.

To begin offboarding an employee, navigate to Employment Status as outlined above and click Start Offboarding. 

Before offboarding your employee, you will need to know the employee's:

  • Termination reason (resignation, dismissed without cause, or dismissed with cause)
  • Last day worked
  • Date of notice

Afraid of choosing incorrect dates? Don't worry – Wave won't let you choose a date that prevents you from properly offboarding your employee.

After choosing the last day work and date of notice, Wave will calculate the following fields based on past approved payrolls and any relevant future payroll periods:

  • Final pay period (last payroll period that this employee is active)
  • Payday deadline (Wave recommends you to pay this employee by this date to stay fully compliant with the CRA)
  • ROE deadline (Wave recommends you to issue the ROE by this date to stay fully compliant with the CRA)

As this employee will not be employed after the final pay period, Wave checks for any pay that this employee is entitled to be paid. Entitlement to particular types of pay is based on the reason for termination and the applicable provincial laws. Here's the list of pay that we check for:

  • Dismissal pay
  • Severance pay
  • Vacation pay (calculated at the time of the last payroll period)
  • Regular, holiday, overtime and sick pay (calculated at the time of the last payroll period on the timesheets page)

After confirming offboarding, you'll be redirected to the employee's modified Employment Status.


Leave of absence and offboarding task list

After confirming either the leave of absence or offboarding you will be redirected to the employee's Employment Status page. You'll see an offboarding final task list which shows what needs to be done, before the employee leaves your company.

The offboarding task list will include the following tasks and a recommended date of completion:

  • Complete timesheets
  • Provide pay
  • Issue ROE

Note: if the recommended payday for the provide pay task is before the payday of the normal last payroll period of the employee, then you will have an option to run a one-off payroll for only this employee. More details below.

When the Offboarding Task List is complete, you have successfully finishing employee offboarding.

Pay offboarded employees in a one-off payroll:

One-off payrolls for your offboarded employee will be made available if the employee's final pay is recommended before the payday of the regular last payroll period

When you are ready to approve the payroll that is also the final payroll period for an offboarded employee, you will have the option to run a separate payroll for this employee. This will allow you to provide the pay for the offboarded employee within the recommended date of completion given in the final task list.

Wave will automatically pay out any vacation balance when an employee is offboarded.

To run a separate offboarding payroll, click Pay them separately button on the Run Payroll page. After approving the one-off payroll, your next payroll will return to the original payroll period without the offboarded employee .


Frequently Asked Questions

Why is my offboarded employee receiving vacation payout on their final payroll?

An employee's available vacation balance and pay will be automatically calculated during offboarding. This includes the vacation hours balance and any vacation hours they will earn for their last payroll period, if their vacation policy is set to accrue. To review and manage an employee's vacation balance or policy, click Payroll > Employees > select the employee's name > click the Vacation page > press the pencil icon beside vacation balance, and/or click the Vacation Policy button.

One-off payrolls are pretty neat. I forgot to pay an employee's final payroll - can I run a one-off payroll for them?

One-off payrolls will be automatically generated for offboarded employees who are required to be paid before the regularly scheduled payday, for their final pay period. The employee's final pay period can be reviewed in Wave by visiting the Run Payroll page.

What is an interruption of earnings?

Service Canada identifies an interruption of earnings as when an employee has had or is anticipated to have seven consecutive calendar days with no work and no insurable earnings from the employer. This situation is called the seven-day rule."

When do I have to issue an ROE?

For a more comprehensive guide on when to issue an ROE, see Service Canada's Understanding the Record of Employment Form. An ROE should be issued "regardless of whether the employee intends to file a claim for EI benefits". Most commonly, an ROE is issued each time there's an interruption of earnings (leave of absence, dismissal, resignation), when Service Candaa requests one, when the pay period type changes, and when the payroll account number changes.

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