Employer Classification Policy 23-300 | Effective Date: January 31, 2013


The purpose of this policy is to:

  • Describe the concepts of classification;
  • Provide guidance for determining employer classification;
  • Describe special classification considerations; and
  • Identify the effective date of changes to classifications.


This policy applies to the classification of employers who are assessed in accordance with Section 54(1) of the WC Act


1.0 General 

The workers’ compensation system provides protection to employers from the financial risks associated with workplace injuries and illnesses.

The system operates on the principle of collective liability for employers. That is, a pooling of revenue from the entire assessed employer population that is then used to pay the present and future costs for workers who incur claims, as well as the administration costs.

The intent of the system is not to balance each insured employer’s assessment premium payment exactly to the insured employer’s costs, but rather to group and assess employers by similar industry and accident risk.

The philosophy of collective liability and the indivisibility of the accident fund are inherent in the classification process.

1.1 Transition to NAICS

From 1996 to 2008, WorkSafeNB used the Standard Industrial Classification (SIC) system to classify employers. In January 2009, WorkSafeNB began calculating assessment rates using the North American Industry Classification System (NAICS). 

All employers were reclassified effective January 1, 2009 and their 2009 assessment rate reflected this new classification. The reclassification may have resulted in a significant increase or decrease in an individual employer’s 2009 basic rate when compared to 2008 rates. 

To minimize the impact of this change, WorkSafeNB capped the annual increases and decreases of the basic assessment rates at the individual employer level until all employers within the industry are at the same basic rate. This means that some employers who compete against each other may not be assessed at the same basic rate during the transition period. For more information, see Policy 23-600 Setting Basic Assessment Rates.

2.0 Classification Structure 

WorkSafeNB classifies each employer based on the employer’s primary business activity, regardless of the occupation of individual workers.

Similar employers are grouped into industries using the NAICS. Once grouped into industries, WorkSafeNB combines like industries into industry groups based on their similarity of:

  • Business activity;
  • Nature of work; and
  • Risks.

WorkSafeNB classifies employers by industry, industry group, and rate group for the purpose of establishing assessment rates. These groupings provide for fairness of cost distribution and stability of rates.

WorkSafeNB’s employer classification system also ensures that:

  • The composition of the industry groups and rate groups are current and continue to be appropriate;
  • New employers can be accommodated within the system and assigned to the appropriate industry, industry group, and rate group; and
  • Employers who compete against each other are classified in the same industry, and ultimately are subject to the same basic assessment rate.  

3.0 Determining an Employer’s Classification

An employer account will be established with WorkSafeNB upon receipt of a completed Application for Coverage form in accordance with Policy 23-100 Employer Registration.

As part of the registration process, employers are required to provide a detailed description of their operations. WorkSafeNB uses this information to determine the employer’s industry classification. 

First, WorkSafeNB reviews the information provided by the employer to determine the nature of the business activities.

Then WorkSafeNB looks at the NAICS Codes Manual to determine if it contains a similar description. The NAICS codes are used to identify the distinct industries operating in the province. WorkSafeNB uses the NAICS code and its description of activities, as the primary tool to assign employers to an industry. 

WorkSafeNB assigns the NAICS code that best represents the primary business activity described by the employer.

In situations where the NAICS code description of activities does not specifically encompass all the business activities for a particular industry, WorkSafeNB will apply the guidelines provided in section 4 of this document. 

WorkSafeNB may review the occupations of the employer’s workers as an indication of the type of business activity.

3.1 Notice of Change in Business Activity

Employers are responsible for notifying WorkSafeNB of any change in their business activities or the addition of any new business activities. 

If an employer fails to notify WorkSafeNB of a change to, or addition of, a business activity, WorkSafeNB may reassess the employer retroactively to the date of the change.

4.0 Special Classification Considerations

The WC Act does not provide for special exceptions for the classification of assessed employers. 

Generally, employers are not assigned multiple classifications.

The sections below outline WorkSafeNB’s classification of employers in situations where clear direction cannot be obtained through the use of NAICS codes.

4.1 Capital Construction

If an employer undertakes capital construction, using its own workers or unregistered sub-contractors, to expand, modify or replace facilities necessary for the operation of the business, this activity will be classified separately from the normal business activity. 

4.2 Classification of Employer Affiliates

Employers are considered to be affiliated, even though they are separately registered when:

  • There is a degree of common ownership; and
  • They are operating businesses that are contributing to the production of common goods/services.

Separately registered employers are considered to have a degree of common ownership when:

  • They are owned by members of the same family; or
  • One employer who owns controlling interest (more than 50%) also owns controlling interest in the other employer’s company.

For the purpose of this policy, members of the same family may include:

  • Spouse, son, daughter; stepson, stepdaughter;
  • Father, mother, stepfather, stepmother;
  • Brother, sister, half-brother, half-sister; stepsister, stepbrother;
  • Grandfather, grandmother, grandson, granddaughter.
  • Niece(s), nephew(s); and/or
  • In-laws.

Employers may also be considered affiliated when there is a degree of common ownership and the businesses share employees, or there is an indication of employees or assets that transfer from one company to the other.

Employer affiliates receive the same classification and are combined for accident history and rate setting purposes.

If an employer’s business activities are supportive of multiple business activities, then classification is done using the criteria specified under subsection 4.5 Supportive Business Activity.

4.3 Operations in More Than One Jurisdiction

If an employer operates business activities partly in New Brunswick, and partly outside this province, then the employer will be classified on the basis of the business activity conducted within New Brunswick.

For example, an out-of-province manufacturer with a New Brunswick retail sales outlet will be classified based on the retail activity.

4.4 Multiple and Intermingled Business Activities

WorkSafeNB may assign a single employer multiple classifications if:

  • The employer is involved in more than one primary business activity; and
  • The primary business activity would be separately classified if it were the employer’s only activity.

WorkSafeNB will review each activity to determine if the employer will be assigned multiple classifications. Examples of factors that WorkSafeNB may consider include:

  • Whether more than 50% of the revenue is generated from non-affiliated customers;
  • The kinds of products or services that the business activity produces or provides;
  • Whether the product or service is used in the employer’s principal business activity;
  • Whether the business activity is a retail store or wholesale outlet;
  • Whether less than 50% of the goods being sold are provided by affiliated manufacturing divisions, and whether retail or wholesale activity is incidental to manufacturing;
  • Whether the business activity is performed by specific personnel as their sole function; and
  • Whether each business activity has the same personnel performing functions for each one, but at different times of the year. 

WorkSafeNB will combine activities into one classification when an employer has multiple business activities and the personnel spend time intermingling (i.e., working between these multiple business activities).  

The highest rated classification will be used if it accounts for at least 40% of the intermingled group of activities. 

Personnel, who intermingle between two or more business activities, will be assigned to the highest rated activity, unless 90% or more of their time is spent in another activity.           

4.5 Supportive Business Activity

WorkSafeNB determines if the business activity is supportive and should be assigned the classification of the employer’s primary business activity. Supportive business activities include, but are not limited to:

  • Design, including drafting & engineering, research & development related to goods produced/intended to be produced;
  • Operation of a plant to produce power/heat for employer’s use;
  • Operation of maintenance or repair shops for servicing/repairing employer’s vehicles/ equipment;
  • Inventory control;
  • Manufacture of packaging/packing materials for packing of goods produced by employer;
  • Printing or lithography directly onto, or for use on, employer’s goods;
  • Warehousing or distribution of employer’s goods;
  • Transportation of an employer’s personnel or goods (includes transportation carried out before the manufacture of a product);
  • Wholesaling and retailing of employer’s goods;
  • Security of employer’s premises;
  • Administration related to employer’s operations (includes owner and office personnel);
  • Maintenance of employer’s facility;
  • Installation of employer’s goods and products;
  • Warranty repairs carried out by an employer on employer’s goods;
  • Marketing, promotion, or communication related to employer’s goods or services;
  • Training of personnel relating to employer’s business activities; and
  • Any operations carried out entirely or partly for the employer’s personnel, including cafeterias, commissaries, parking lots, or medical, recreational, or day care facilities.

Supportive of more than one classification

When a business activity supports two or more classifications, WorkSafeNB assigns the activity to the classification group with the highest basic assessment rate.           

WorkSafeNB will do this when the activity comprises at least 40% of all the classifications that are being supported.           

A number of indicators can be examined in order to determine what meets the 40% criteria. These are:

  • Revenue/Gross Profit - an indicator of an activity’s economic importance. Projected figures, e.g., a new business, should not be used;
  • Payrolls - an indicator of the number of workers and amount of time spent in each activity being considered; and
  • Units of Production - an indicator to use if revenue criteria are distorted by special circumstances, e.g., normal production versus special order. 

4.6 Out-of-Province Administration 

For more information on the classification of an employer with administrative staff assigned to operations outside New Brunswick, see Policy 23-305 Administration of Out-of-Province Operations.

4.7 Management Company 

A management company is a distinct and separate business entity having effective financial control of one or more associated companies, and sharing the following characteristics:

  • Sets policy direction for the associated companies;
  • Shares a director(s) in common with the associated companies; and
  • Staff normally only consists of directors and office personnel.         

Management companies are assigned to the same classification as their associated companies; they are normally combined with the associated companies for accident cost history and rate setting purposes.           

5.0 Effective Date of Classification Change           

WorkSafeNB may change an employer’s classification when there has been:

  • An error in classification;
  • An omission / misrepresentation of information supplied by the employer;
  • A change in the employer’s operations; or
  • A change to WorkSafeNB’s classification policy.

New Business Operation

In the case of a new business operation, the effective date of the classification is the date on which the new business begins operations.

Existing Business Operations

The following table indicates the effective date of classification changes, based on the reason for the reclassification.

 Effective Dates for Reclassifications              

  Higher Rate Group Lower Rate Group
Classification error January 1st of the following year Retroactive to the date the error was made subject to limitations in this policy.

Omission / misrepresentation by employer

Retroactive to the beginning of period for which the omission or misrepresentation was made January 1st of the current year
Changes in operations January 1st of the following year January 1st of the current year
Change to policy January 1st of the following year January 1st of the current year

WorkSafeNB has the authority to determine classifications and make adjustments to classifications. There are situations that arise in the classification process:

  • That result in borderline classifications that may change on appeal; or
  • When information supplied by the employer is incomplete, whether intentional or not.

If an employer’s business activity is reclassified to a lower rate group in order to correct an error made by WorkSafeNB, then the reclassification will be made effective retroactively to the date the error was made, subject to the following limitations:

  • The complete information to allow a proper classification was made available to WorkSafeNB, however, an incorrect classification was made; or
  • WorkSafeNB did not detect an incorrect classification during the course of an audit.  

No retroactive corrections will be made for more than three years from the 1st of January of the year that the error was detected, i.e., the correction will be made for the current year, minus three years, for a total of four years.


Workers’ Compensation Act (RSNB 1973, c W-13)

31(2), 34(2)(a), 34(2)(b), 34(2)(c), 34(2)(d), 34(2)(e), 34(2)(f), 34(2)(g), 34(2)(h), 34(2)(I) and 34(2)(j)


50, 51, 53(3), 53(9)(a), 53(9)(b), 53(9)(c), 53(9)(d), 54(1)(a), 54(1)(b), 54(1)(c), 57(1) and 59(1)

Case Law

On September 20, 2000, the New Brunswick Court of Appeals in Saint John Shipbuilding, Ltd. vs. WHSCC interpreted Section 54(1) as providing the Commission with wide discretion in making the assessments contemplated by Section 54(1).

Accident – includes a wilful and intentional act, not being the act of a worker, and also includes a chance event occasioned by a physical or natural cause, as well as a disablement caused by an occupational disease and any other disablement arising out of and in the course of employment, but does not include the disablement of mental stress or a disablement caused by mental stress, other than as an acute reaction to a traumatic event. (WC Act)

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

Assessment premium – is equal to the assessment rate multiplied by $100 of assessable payroll.

Industry – refers to the whole or any part of any industry, operation, undertaking or employment within the scope of the WC Act; and in the case of any industry, operation, undertaking or employment not as a whole within the scope of Part I of the WC Act means any department or part of such industry, operation, undertaking or employment as would, if carried on by itself, be within the scope of the WC Act. (WC Act)

North American Industry Classification System (NAICS) – a common framework for the production of comparable industry statistics by the statistical agencies of Canada, Mexico, and the United States. As a reference manual, the NAICS provides a classification structure that includes industry definitions and examples to clarify the content of each industry. (Statistics Canada – North American Industry Classification System, 2002)

Standard Industrial Classification (SIC) – Statistics Canada’s former framework for collecting, compiling and disseminating economic statistics for groups of businesses that are engaged in similar activities. 

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

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