Assessable Earnings Policy 23-200 | Effective Date: January 31, 2013

Purpose

The purpose of this policy is to communicate WorkSafeNB’s guidelines for determining and reporting assessable earnings.

Scope

This policy applies to every employer who pays or is required to pay assessments.

Statements

1.0 General

WorkSafeNB administers the Workers’ Compensation Act, providing no-fault insurance to employers and compensation benefits to injured workers. The WC Act requires that WorkSafeNB fund these obligations primarily by collecting assessment premiums, and penalties or surcharges as applicable, from employers covered under Part 1 of the WC Act. For more information, see Policy 23-100 Employer Registration.

Assessments are based on the individual employer’s payroll (to a maximum amount per worker) and a rate set by WorkSafeNB annually for each employer. An employer’s annual assessment equals the total amount of assessable earnings on the employer’s payroll, multiplied by the annual assessment rate for that employer.

For more information on how employers’ rates are set, see:

  • Policy 23-600 Setting Basic Assessment Rates; and
  • Policy 23-605 Experience Rating System.

All employers covered under the WC Act are required to report to WorkSafeNB the assessable earnings of their full-time, part-time, casual, and contract workers.   

Employers who participate in WorkSafeNB’s Monthly Assessment on Actual Payroll (MAAP) program report the actual assessable earnings on a monthly basis.

Employers who do not participate in WorkSafeNB’s Monthly Assessment on Actual Payroll (MAAP) program must report the assessable earnings on an annual basis. The statutory deadline for reporting a calendar year’s assessable earnings is February 28th of the following year.

Failure to report assessable earnings as required by WorkSafeNB may result in penalties or other charges on an employer’s account. For more information, see section 3.1 and 3.2 of this policy.

2.0 Assessable Earnings

Assessable earnings may include:

  • Wages;
  • Salary;
  • Commissions;
  • Bonuses;
  • Vacation pay;
  • Statutory holiday pay;
  • Overtime;
  • Sick leave benefits;
  • Honorariums;
  • Directors fees;
  • Distribution of profits employees report on a T4 or T4A (taxation forms);
  • Tips and gratuities reported to the government department responsible for taxation;
  • Call in / call back pay;
  • Shift differentials or premiums;
  • Value of the labour portion of a contract;
  • Municipal councillor allowances reported on a T4 or T4A (taxation forms);
  • Employer’s portion of RRSP contribution if available to the recipient prior to age 65;
  • Retroactive pay changes; and
  • Any other financial remuneration reported as income and paid by the employer.

2.1 Non-Assessable Earnings

Employers are not required to report earnings and benefits that WorkSafeNB excludes from assessments. Examples of non-assessable earnings include:

  • WorkSafeNB benefits;
  • Taxable allowances for employment-related supplies or activities (for example, allowances for travel, use of vehicle, tools, clothing, and dry cleaning);
  • Dividends reported on a T-5;
  • Retirement allowances;
  • Severance pay;
  • Any other taxable benefits which are not monetary;
  • Employer’s portion of RRSP contribution if locked in until age 65;
  • Earnings from a proprietorship or partnership, and proprietors’ or partners’ spouses and/or children under the age of 16 residing at home, if employed by the proprietor or partner; and
  • Amounts in excess of the maximum annual earnings per worker.

3.0 Reporting Assessable Earnings

Employers must report all earnings (payrolls) for each worker, up to the maximum assessable amount for the year being reported. Earnings may not be pro-rated or averaged for any period of the year, regardless of the period which the work was done.

No minimum applies to assessable earnings, except where WorkSafeNB has granted Personal Coverage. For more information on this exception, see Policy 23-100 Employer Registration.

As outlined in the following subsections, both MAAP and annually assessed employers must report earnings within a specified reporting period. Employers who report earnings after these dates may be charged a late filling penalty.

WorkSafeNB requires that payroll estimates and reports are accurate. Employers who underreport or underestimate their payrolls by more than 25% over the calendar year may be charged an additional 12% of assessments (surcharge) on the underreported or underestimated portion of the actual assessment. WorkSafeNB collects the additional percentage of assessment as part of the employer’s regular assessment.

3.1 Monthly Assessment on Actual Payroll (MAAP) Program

For MAAP employers, assessable earnings are calculated based on actual monthly earnings. These employers are required to report the preceding month’s actual earnings no later than the 15th day of each month.

MAAP employers who report their actual earnings late are charged a late filling penalty. Payment of the penalty is due immediately and is equal to:

  • 5% of the monthly assessment levied if reported after the 15th day of the month; and
  • 10% of the monthly assessment levied if reported after the last business day of the month.

MAAP employers who continuously report late may be switched to the annual assessment program.

3.2 Annually Assessed Employers

For annually assessed employers, assessable earnings are calculated using annual earnings.

These employers are required to report for every separate business activity (operation) assigned by WorkSafeNB using a Form 100 – Employer Payroll Report. The reports must be submitted to WorkSafeNB on or before February 28th of each year and include:

  • The actual earnings for the previous year that they paid to their workers; and
  • A reasonable estimate of the current year’s earnings that they expect to pay their workers.

WorkSafeNB considers the estimate reasonable when actual payrolls are within 25% of the estimate.

Annually assessed employers who report their earnings late are charged a late filling penalty of:

  • 5% of the previous year’s actual assessment if reported after the first business day following March 15th; or
  • 10% of the previous year’s actual assessment if reported after the first business day following April 15th.

The penalty cannot exceed $500 per year.

Revised Estimates

An employer may submit a revised payroll estimate (representing an increase or decrease) during the year if unexpected changes in activity occur.

Any revised estimate showing an increase in assessable earnings must be:

  • Received by WorkSafeNB no later than November 30th of the year to which the estimate applies; and
  • Accompanied by full payment of the additional assessment, along with justification for the payroll increase (monthly payroll breakdown with explanations).

Revised estimates received after November 30th will be subject to an additional 12% of assessment.

If an employer submits a revised estimate showing a decrease in assessable earnings, WorkSafeNB may credit the employer’s account if the employer provides acceptable justification for the decreased estimate.

If an employer provides a payroll estimate that WorkSafeNB determines to be insufficient based on previous years’ assessable earnings, the employer may be required to submit:

  • Information confirming the estimate’s reasonableness; or
  • A revised payroll estimate.

3.3 Cancelling the Late Filing Penalty

WorkSafeNB may cancel the late filling penalty where:

  • A new employer was unaware of the filing deadline; or
  • An extension was given by the Manager of Assessment Services due to special circumstances.

3.4 Waiving the Additional Assessment

WorkSafeNB may waive the additional percentage of assessment related to underestimated or underreported payroll when:

  • The employer is newly assessed and has no previous operational experience with WorkSafeNB;
  • The employer has an unusually large payroll compared to its payroll history (payroll breakdown required from the employer);
  • The employer provides a revised estimate as outlined in section 3.2;
  • The employer is in financial hardship, as determined by WorkSafeNB using evidence such as relevant financial statements and documents;
  • The employer is out-of-business; or
  • An exceptional situation occurs, which WorkSafeNB examines on a case-by-case basis.

3.5 Fraudulent Reporting of Assessable Earnings

If WorkSafeNB suspects an employer has fraudulently submitted an assessable earnings (payroll) statement, the case may be referred to the General Counsel’s Office for appropriate action. For more information, see Policy 46-300 Protecting the Intregrity of the System.

4.0 Assessment of Volunteers

Employers may apply for coverage of certain volunteer workers, and therefore be required to pay assessments on them. This provision applies to the following types of volunteer workers:

  • Learners;
  • Volunteer municipal firefighters;
  • Volunteer ambulance drivers/attendants;
  • Volunteer and auxiliary police officers and police constables when appointed under the Police Act; and
  • Volunteer executive members of a labour union.

In the case of learners, the employer is the person, agency, or association controlling and monitoring the employment placement or training program. For more information on who may be considered volunteer workers, see Policy 21-010 Definition of Worker.

In order for WorkSafeNB to provide coverage, the employer must submit to Assessment Services, on or before the statutory deadline of February 28th, a list containing the names and social insurance numbers (SIN) of all individuals who will volunteer their services during the calendar year.

WorkSafeNB levies an initial assessment for every individual on the list. Employers must notify WorkSafeNB of any personnel changes during the year. The lists are cumulative, which means that:

  • Any addition to the list will result in an additional assessment; and
  • No credit adjustments are made for individuals deleted from the list.

4.1 Rates / Fees

WorkSafeNB assesses individual levies for every name on an employer’s list as follows:

  • $20.00 per individual for the first 10 reported on the list; and
  • $15.00 per individual for each additional name on the list (i.e., 11 and above).

Additional names may be added to the list during the year. All additions will become part of the original list and will be assessed at the same rates as indicated above.

4.2 Special Cases

WorkSafeNB does not levy assessments on employers for coverage in the following special cases:

  • Individuals asked by a fire chief or deputy to assist at a fire or accident site;
  • Individuals assisting a peace officer; and
  • Emergency service workers.

Off-duty police officers are considered workers when performing work-related duties, whether on or off duty. No additional assessment is levied.

If an individual in any of these circumstances is injured while performing necessary duties, an official representative of the employer or public service organization (i.e., fire chief or deputy; police chief or deputy or municipal official; Emergency services coordinator or EMO official) must submit to WorkSafeNB a sworn statement confirming the status of this individual. For more information, see Policy   21-010 Definition of Worker.

5.0 Assessment of Contractors and Sub-Contractors

In addition to reporting the assessable earnings of workers on their payrolls, employers are required to report to WorkSafeNB all contracts that they award to individuals and companies. For purposes of this policy, a contract must contain a labour component in order to draw an assessment. Contracts involving a straight purchase of equipment or products without installation or service are not considered assessable, since there is no labour content. The labour portion of every contract is normally assessed at the principal employer’s industry rate.

If an employer hires a contractor or subcontractor who is not registered or required to be registered under Part 1 of the WC Act, that employer is:

  • Considered to be the “principal”; and
  • Will be assessed for the coverage of contractors/subcontractors.

It is important to note that any employer, whether registered with WorkSafeNB or not, may be considered a principal. Unregistered employers (i.e., those usually employing fewer than 3 workers) who hire unregistered contractors or subcontractors may themselves be required to register with WorkSafeNB and pay assessments on those workers. For more information, see Policy 21-010 Definition of Worker.

Principal employers who maintain or are required to maintain an assessment account with WorkSafeNB may withhold from unregistered contractors or subcontractors the amount of their contract’s assessment liability, in accordance with the percentages listed in section 5.1 of this policy.

However, principals are liable for the assessment amounts, regardless of whether they have withheld monies from a contractor or subcontractor, unless they have obtained a clearance certificate from WorkSafeNB.

WorkSafeNB will not assess a principal for out-of-province contractors who provide a letter or certificate from the Workers’ Compensation Board or Commission of their home province, indicating their registration with that Board or Commission and showing that coverage has been extended for the work performed in this or any other province.

5.1 Assessment Percentages for Contracts

WorkSafeNB bases its assessment of a principal’s contracts and subcontracts on the following percentages, which represent the labour content of the contract:

  • Labour Only 100%
  • Janitorial Service 80%   
  • Labour & Material 50%   
  • Courier Service 40%
  • Hired Equipment 25%

The principal may deduct from a contractor or subcontractor only the portion of assessment related to “Labour & Material,” “Courier Service,” and “Hired Equipment” contracts.

No deductions are permitted in “labour only” contracts because the workers are considered workers of the principal, and no premiums or deductions from a worker’s earnings are permitted for assessment purposes under the WC Act.

Special Labour & Material Contracts

At an employer’s request, WorkSafeNB may assess actual labour costs rather than take the above-noted percentage (50%) of Labour and Material contracts.

This provision applies to Labour and Material contracts involving the installation of expensive equipment, with minimal amounts of labour. In cases like this, the employer must provide WorkSafeNB with evidence substantiating the request, such as:

  • Copy of invoices;
  • Confirmation from other suppliers;
  • Confirmation by principal contractor; and
  • Any other relevant information deemed necessary by WorkSafeNB.

Appeals Tribunal – means the Workers’ Compensation Appeals Tribunal established under the WHSCC & WCAT Act.

Assessable earnings – the gross earnings before any deductions, up to the maximum annual earnings set by WorkSafeNB, for each worker on an employer’s payroll.

MAAP (Monthly Assessment on Actual Payroll) – a program allowing an employer to pay assessments on a monthly basis, based on actual payroll.

Maximum annual earnings – an amount equal to 1.5 times the NBIAE, which is set by the Commission as of the first day of January of each year. (Adapted from WC Act)

Principal – any person or employer providing work on a contract or sub-contract basis to another person(s) or employer(s).

WorkSafeNB – means the Workplace Health, Safety and Compensation Commission or "the Commission" as defined by the WHSCC & WCAT Act.

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