Newfoundland and Labrador Employer Guide

Transcription

1 Newfoundland and Labrador Employer Guide

2 The information in this guide provides the reader with general information about the Workplace Health, Safety and Compensation Commission. It does not cover every issue or exception. If you want to learn more about workers compensation, return-to-work obligations and injury prevention, please refer to the relevant legislation and regulations which are printed by the Queen s Printer, or visit our website at: Updated March 2013

3 Table of contents Why register with WHSCC? Who must register Fishing industry Logging industry Exclusions How do I register? What if I do not register? How much will it cost? How do I pay my assessments? Managing your account Special coverage Industrial classification system Hiring contractors Information needed to register Late registration Cost of injury Commission estimate Assessments Assessment rates Assessable earnings Deductions Paying assessments Payment methods Collection and legal action Annual reporting Quarterly reporting (fish buying and pulpwood & sawlog harvesting) Payroll adjustments Changes to your business activities Restructuring Contacts Change of ownership Closing your operation Records to be kept Optional personal coverage (OPC) Householder coverage Student coverage Out-of-province coverage Classification system Multiple classification Base assessment rates PRIME Hiring individuals Hiring non-incorporated companies Hiring incorporated companies Liability for assessments Clearance letters Connect web portal Contract work Legal transactions How to request a clearance letter

4 Table of contents (continued) Assessment audits Injury costs Financial audits - frequently asked questions Transfer of injury costs Second Injury Relief Injury prevention Prevention Services Occupational Health and Safety Committees/ Worker Health and Safety Representatives/ Workplace Health and Safety Designates Occupational Health and Safety programs Ergonomics Young workers When an injury occurs Worker s responsibility Employer s responsibility Compensation Services Benefits and assistance available to injured workers Return to work legislation Wage-loss benefits Health care Early and safe return to work Re-employment obligation Re-employment penalties and payments ESRTW advice and support Return to work program Labour market re-entry (LMR) Elements of an effective program Penalties for employer non co-operation On-the-job-training Employment readiness Academic upgrading/formal training Entrepreneur assistance Extended earning loss benefits Recurrence Subsequent Reports Permanent functional impairment (PFI) award Dependency benefits Investigations Employer access to file information

5 Table of contents (continued) Vendor numbers Employers Advisors Requesting a review Internal review External review Viewing your file When a workplace injury occurs 3 forms should be sent to the Commission Employer s Report of Injury Form /32 Contact Information Assessment Services Department Other frequently used numbers Fax numbers/toll free numbers

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7 Why register with WHSCC? The workers compensation system in Newfoundland and Labrador (NL) is a no-fault insurance system that protects employers and workers. Employers registered with the Workplace Health, Safety and Compensation Commission (the Commission) pay assessments that fund the system, and in return they cannot be sued for the costs of a work-related injury, illness or fatality. Who must register The Workplace Health, Safety and Compensation Act (the Act) requires all employers performing work in NL to register with the Commission. Almost all workplaces in this province are covered under the Act. All incorporated entities operating in NL must register with the Commission. Coverage is mandatory for all workers, including the owner, directors or managers, even if the owner is the only worker. A non-incorporated entity is not required to register if the only workers are the proprietor or partners. However, as soon as a non-incorporated entity hires a worker or sub-contracts work in this province, it is required by law to register with the Commission and pay assessments on the earnings of that worker and to report sub-contractors annually. The proprietor or partners of a non-incorporated business are not automatically covered under the Act. This means they cannot automatically receive benefits from the Commission in the event of a work-related injury. However, if the owners of a nonincorporated entity wish to be covered, they may voluntarily apply for coverage under the Optional Personal Coverage Program. Registration is also required where a business (the principal) sub-contracts work in the province, even if the business itself has no direct workers in NL. Fishing industry Registration requirements and the methods of assessment differ for some employers in the fishing industry. The three main industry components for consideration include: fish buying, fish harvesting and fish processing. Fish buying Fish buyers must register with the Commission and pay assessments on the value of fish purchased from commercial fishers. Fish purchase accounts must be opened by: fish plants that purchase fish either directly or indirectly from commercial fishers unless the fish is acquired from another processing establishment; commercial buyers who purchase fish directly from commercial fishers and who do not resell the fish to a fish processing plant; or, managing owners or persons employing crew members on a boat, vessel or ship engaged in the fishing industry in NL, who land part of the boat s catch outside the province. Fish harvesting A commercial fisher is automatically covered by the Commission if he/she is: a master or member of a crew of a licensed commercial fishing vessel; a master or member of a crew of a vessel which is engaged in fish packing, fish collecting or fish buying for commercial sale or use; or, any person who, in the opinion of the Commission, contributes to the catching or landing of fish for commercial sale or use in the province of NL. As commercial fishers are generally covered by the assessments paid by Page 2

8 fish buyers, vessel owners or fishing enterprises, they do not normally have to register with the Commission. A commercial fisher who is engaged in the maintenance or minor repair of the fishing vessel or equipment during the fishing season or in the off-season, is covered under the Act, as these activities are considered incidental to the fishing operations. However, there are several instances where a commercial fisher or fishing enterprise would be required to register with the Commission. These include: commercial fisher or fishing enterprise hires a person who is not a commercial fisher to engage in onshore activities such as maintenance or minor repairs; commercial fisher or fishing enterprise involved in the construction of its fishing vessel or doing major repairs on that vessel; or, if the vessel catch is not sold to a fish buyer required to register with the Commission (e.g., the fish is sold outside of the province). In this situation, the person who engaged the master or crew of the fishing boat, or the person or organization that transmitted the crew share of the sales, must register with the Commission. This may be the vessel owner, fishing enterprise or the person or organization that controls or decides where the fish is sold. Fish processing Employers who operate a fish processing plant or a factory freezer vessel must also register with the Commission and pay assessments based on the payroll of their workers. An employer operating a fish processing plant will have two accounts with the Commission one for their plant operations and one for their fish purchases. Logging industry Like fishers, registration requirements and the methods of assessment differ for some employers in the logging industry. The two main industry components for consideration are harvesting and processing. Wood harvesting Wood harvesters (cutters or loggers) pay assessments based on the volume (cubic meters) of wood cut. The person or firm who owns the cutting permit or cutting rights to the land on which wood is cut must register and pay the assessments. Wood processing Employers engaged in other aspects of the forestry industry, such as sawlog and pulpwood handling and processing, must register and pay assessments based on the payroll of their workers. These employers will have two accounts with the Commission one for their forestry operations and one for their wood harvesting. Exclusions Entities employing individuals under the following situations are not required to register with the Commission: employment by a person in respect of construction or renovation of a private residence, where the residence is or shall be used as a private residence of that person; employment by a person in respect of a function in a private residence of that person; and professional sports competitors. However, coverage may be obtained in these situations through the Householder or Optional Personal Coverage Programs. Page 3

9 How do I register? An employer can register by completing a registration application and faxing or mailing it to the Commission. A registration application and instructions can be obtained from our website at: or from one of the Commission offices. For inquiries or assistance, please contact one of our employer registration representatives at: (709) , or toll free in Canada at: Information needed to register In general, you will need the following information when you register: 1. the complete legal name of your business or if you are registering under a partnership or proprietorship, the legal names of the business owners; 2. your incorporation number and date if you operate a limited company; 3. copy of your Certificate of Incorporation and Notice of Directors if you operate a limited company; 4. description of your business activity and industry; 5. estimate of your payroll if you employ workers; 6. start date of operations; 7. names and contact information of the proprietor, all partners, or directors; 8. payroll information for prior years of operation; and, 9. name(s), contact information and contract values for any sub-contractors used. What happens when a registration application is received? When an employer registers with the Commission, a seven digit firm number is assigned. This number identifies the employer and should be provided on all correspondence and payments sent to the Commission or when you contact us to discuss your account. Once you are registered you will receive a letter and invoice confirming your registration. What if I do not register? All employers are required by law to register with the Commission and pay assessments based on their workers earnings. Failure to register may result in the following financial penalties: Late registration The late registration penalty can range from a minimum of $50 to a maximum of $2,000 per year, depending on the assessment amount for each year. The employer is also required to pay assessments for the years the business operated but was not registered. Cost of injury In the event of a work-related injury, an employer who is not registered may, in addition to owing unpaid assessments, be held liable for the total cost of the injury. Depending on the severity of the injury, this could be extremely costly for the employer. Commission estimate An employer who does not register with the Commission may be assessed based on estimated earnings determined by the Commission. How much will it cost? Assessments The amount an employer pays the Commission each year is called an assessment. Employers pay assessments based on the earnings of their workers (full-time, part-time and casual workers and directors of incorporated companies), except those workers excluded by regulation (see exclusions on page 3). In general, your annual assessment is determined by your assessment rate and your assessable earnings. Assessments are calculated based on assessment rates per $100 of assessable earnings. Page 4

10 Assessable earnings are replaced by alternate units of measurement for those employers involved in pulpwood/sawlog harvesting and fish buying. Employers who are eligible for experience rating and/or the PRIME program may also have their assessments adjusted through refunds or charges depending on their occupational health and safety practices and claims cost experience. Employers in the construction industry pay an additional levy which is collected by the Commission on behalf of the Newfoundland and Labrador Construction Safety Association (NLCSA). The NLCSA, in partnership with the Commission, has implemented this levy to provide funding for the NLCSA to work with the construction industry to promote occupational health and safety. Assessment rates Because different industries experience different levels of injury costs, they have different assessment rates. Industries with lower cost experience have lower assessment rates, and industries with higher cost experience have higher assessment rates. The classification process and the calculation of base assessment rates are described in the section titled Industrial Classification System (see page 14). Assessable earnings This is the amount that you must report and pay assessments on each calendar year. Essentially, this amount is your workers gross earnings, less deductions allowed by the Commission for that year. Employers who sub-contract work may also be assessed on the labour portion of the contract. Note: You must retain a record of your payroll information, including supporting documentation for deductions for six years so that it can be verified by the Commission. There is a minimum assessment of $50 that an employer must pay in a calendar year. You may also incur financial penalties if you are late registering, reporting or paying for any year. The following are some types of earnings that must be included when reporting assessable earnings: #1. SAMPLE CALCULATION Annual Assessment Example: the 2011 base rate for a gasoline station is $1.48 for every $100 of payroll. This means that an employer with an annual payroll of $50,000 will pay an assessment of $740 in Assessment Rate/100 x assessable payroll = Annual Assessment $1.48/100 x $50,000 = $740 Figure #1 provides a sample Annual Assessment Calculation. gross salary, gross hourly earnings, overtime, retroactive pay increases; director earnings, fees and bonuses; shareholder dividends where the owner chooses to be remunerated for their services with a share of profits; vacation pay, work-related and discretionary bonuses, tips and gratuities; commissions from employment; sick pay, up to 13 consecutive weeks; gifts, education allowances, etc. Generally, all taxable benefits are assessable. For a complete list of items to be included in assessable earnings, contact the Commission s Assessment Services Department. Page 5

11 Deductions Three types of deductions that can be made from the gross earnings paid to your workers include: excess earnings; earnings reported to other Canadian workers compensation boards; Human Resources Skills Development Canada (HRSDC) and the Department of Human Resources, Labour and Employment (HRLE) wage funding eligible for blanket coverage. Excess earnings The Commission insures payroll to a maximum annual amount per worker. This amount is referred to as the maximum assessable earnings. This amount is adjusted each year according to the Consumer Price Index (CPI). If any of your workers earnings exceed this maximum for any calendar year, you can claim the amount above the maximum as an excess earnings deduction on your annual Employer Payroll Statement (see figures #2 and #3 below). To obtain further information on maximum assessable earnings, please refer to our website at: or contact the Assessment Services Department. Earnings reported to other Canadian workers compensation boards The workers compensation boards of Canada have an agreement in place to avoid duplicate assessments for employers whose workers are employed in more than one Canadian jurisdiction. If your firm is registered in NL and you were required to register and pay assessments in another Canadian jurisdiction for some of your workers earnings, you may be entitled to a deduction. This deduction is reported when you complete your annual Employer Payroll Statement (see figure #4). HRSDC and HRLE WASC funding reports and pays assessments directly to the Commission for wages under some of its funding programs. A deduction is permitted on your annual Employer Payroll Statement for wage subsidy #2. Maximum Assessable Earnings $48,425 $49,295 $50,379 $51,235 $51,595 #3. SAMPLE CALCULATION Maximum assessable earnings and deduction Employee name Gross earnings J. Smith $88,500 M. Jones $75,000 Total deduction - excess earnings (sum excess earnings) Excess Earnings (Gross earnings less $51,595) $36,905 $23,405 $60,310 Note: When calculating maximum assessable earnings for individuals who worked for your firm in both this province and another Canadian jurisdiction where assessments were paid in both jurisdictions, do not include the earnings paid for work outside of NL in your calculation of the maximum assessable for this province. Page 6

12 funding under the following HRSDC or HRLE funding programs: Job Creation Partnerships; Labour Market Partnerships (LMP); Employment Assistance Services (EAS); Youth LMP Career Focus Skills Link SWASP Canada Summer Jobs (not-for-profit firms only) If HRSDC or HRLE reimbursed you for earnings paid to individuals under any of these programs, you can deduct these earnings on your annual Employer Payroll Statement since HRSDC or HRLE has already reported these earnings and paid assessments to the Commission. You may not deduct earnings paid under any other federal or provincial funding programs (e.g., Targeted Wage Subsidy) as your firm is responsible for paying the assessment on those earnings (see figure #5). How do I pay my assessments? Paying assessments Current year assessments are due on April 1 of each year. Prior year assessments, or current year assessments invoiced after April 1, are due within thirty (30) days of the invoice date. Employers may contact us to request a deferred payment plan if they find it difficult to pay their full current year assessment. If assessments are not paid on or before the due date, the employer will be charged interest at the end of each month on the outstanding balance. The interest rate is set on January 1 each year at a rate of prime plus 5 percent. An interest free deferred payment plan is available to employers who had less than $54,000 in assessments in the previous year. A $50 fee will be charged for payments returned by the employer s bank. The Commission has an automatic lien on all assets of an employer for unpaid assessments. In addition, the directors of an incorporated company may be held liable for the outstanding assessments and legal action can be taken. The Commission will pursue collection and legal action against employers who do not pay their assessments. #4. SAMPLE CALCULATION Deduction for earnings reported to other Canadian boards Employee name Gross earnings Earnings reported to other Canadian boards Jane Doe $17,000 $5,000 Jon Hancock $22,000 $8,000 Ron Smith $40,000 Total deduction - earnings reported to other boards (sum earnings reported to other Canadian boards) $4,000 $17,000 #5. SAMPLE CALCULATION HRSDC or HRLE deduction for eligible wage funding Employee name Funding Program Gross earnings Eligible program? HRSDC/Service Canada wage funding (eligible funding program) John Doe Skills Link $18,675 $8,675 Jane Smith Career Focus $2,400 $1,200 Total deduction - HRSDC or HRLE Canada eligible wage funding (sum eligible HRSDC or HRLE Canada wage funding) $9,875 Page 7

13 Payment methods Pre-authorized debit payment plan This is the easiest way to ensure your payments are made on time. Payments are withdrawn from your bank account on the date(s) and in the amount(s) that you authorize. You must contact us to set up a payment plan or whenever a revision to an existing plan is needed during the year to cover your new balance. Mail Simply return the perforated portion of your invoice or statement with your cheque or money order. In person You can pay by Interac, cheque, money order or cash at one of our offices: St. John s Forest Road Corner Brook 2 Herald Avenue Grand Falls-Windsor 26 High Street Financial institutions If you pay your account through a financial institution, you should check to determine the number of days your payment must be made prior to your due date to ensure the payment reaches us on time. You can pay in-person at most financial institutions by presenting your invoice or statement with your payment. Contact your financial institution to see what electronic payment services they offer. When setting up an electronic payment, it is important that you select the NL WORKPLACE HEALTH, SAFETY & COMP COM. Otherwise your payments may go to another province and you will be charged interest. Deferred payment plans You may request a deferred payment plan that will allow you to pay your current year assessment on an installment basis within the current year. You must contact us to arrange the payment plan before your payment is due. All prior year assessments must be paid in full within 30 days of the invoice date. To be eligible for any deferred payment plan, employers must have submitted payroll statements with the required information for all years, provided a reasonable estimate for the current year and have an annual assessment of $50 or more. Failure by an employer to meet their payment plan may result in collection and legal action being commenced by the Commission. Employers with an annual assessment of less than $54,000 in the previous year Once approved by the Commission, these employers may pay their current year assessment and levy by monthly installment payments from April 1 to October 1 on the first of each month by pre-authorized debit only. No interest will be charged from April 1 to October 1 if employers comply with this payment schedule. Employers who default on any payment in this schedule will be charged interest monthly on the outstanding balance until such time as any missed payments have been made and the account is on track again with the original payment schedule. Employers with an annual assessment of $54,000 or more in the previous year Once approved by the Commission, these employers may pay installments from April 1 to December 31. Interest will be charged monthly on the outstanding balance. Payments may be made by either pre-authorized debit or post-dated cheques, paid either: quarterly the first of each quarter; monthly the first of each month; Semi-monthly the first and fifteenth of each month; bi-weekly every two weeks on the same day; weekly the same day each week. For further information regarding payment arrangements contact us at: , or toll free in Canada at: Page 8

14 Collection and legal action The Act gives the Commission the legal right to collect assessments from employers who are required to register for workers compensation coverage in this province. Through legislation, the Commission automatically has a lien on all assets of an employer for unpaid assessments. The Commission is not required to go to court to take action on that lien. When an employer does not pay their assessments or make suitable payment arrangements our collection staff may visit, phone or write the employer in an attempt to make a payment arrangement that is agreeable to both the employer and the Commission. If an agreement cannot be reached, we will proceed with legal action to collect the outstanding balance. Legal action can include garnishing bank accounts, third party attachments and seizure and sale of company assets which could impact your credit rating. The cost of such legal action is the responsibility of the employer. In the case of incorporated companies, if the corporation fails to pay its assessment, the directors of the corporation at the time of default are jointly and individually liable to pay the assessment. In the event that we pursue a director in relation to the outstanding assessments, the Commission may execute the same legal actions against the directors as it did against the company. It is important that you contact us to discuss your payment options. Managing your account An important part of the Commission s relationship with employers is maintaining accurate information about each firm. By having the right information, we are able to calculate fair and accurate assessment rates and to correspond with employers about issues and opportunities that affect their firm. Therefore, employers are responsible to notify the Commission of any changes to their operation throughout the year, including: Annual reporting Annual reporting helps the Commission maintain accurate information about a firm. Most employers are assessed on payroll and must submit their annual employer statements to the Commission by February 28 each year. Failure to complete and submit these forms by February 28 will result in forfeiture of your PRIME refund(s) and a delay in reporting penalty, which ranges from $50 to $2000 depending on the assessment value for that year (see figure #6). In early January, a package is sent to each registered employer. The package contains the following statements: employer payroll statement; occupational health and safety statement(s); employer contractor statement. The Employer Payroll Statement is a mandatory form and is used to:report your actual assessable earnings for the previous year; provide an estimate of assessable earnings for the coming year; identify if your firm hired contractors and/ or will hire contractors; determine your eligibility for PRIME refunds; and identify changes to your business information. The Occupational Health and Safety Statement is a mandatory form and is used to identify information about your firm s workplaces; to monitor compliance with occupational health and safety legislative requirements in NL; and to verify your firm s entitlement to PRIME refunds. The Employer Contractor Statement is a mandatory form if you hire contractors and is used to report each contractor s name, mailing address, telephone number, type of work performed, total contract value and labour value. Page 9

15 #6. Delay in Reporting Penalties Assessment Amount Penalty $ 50 - $ $50 $ 1,000 - $ 4, $100 $ 5,000 - $ 49, $500 $ 50,000 - $ 99, $1,000 $ 100,000 and over...$2,000 Quarterly reporting (fish buying and pulpwood & sawlog harvesting) Employers involved in either fish buying or pulpwood and sawlog harvesting, must report quarterly and are subject to quarterly late reporting penalties. The quarterly statements are mailed out to employers in these industrial classifications 30 days before the reporting deadlines. Failure to meet the quarterly reporting deadlines will result in late reporting penalties (see figures #8 and #9 on page 11) and for employers in pulpwood and sawlog harvesting, it will result in a forfeiture of their PRIME refund(s). Payroll adjustments In addition to completing the annual Employer Payroll Statement, you are also required to update your estimate throughout the year. We recognize that your number of workers or workload can change during the year. If you need to adjust your current year s payroll estimate, you must advise us in writing. Failure to do so may result in an underestimating penalty when you file your Employer Payroll Statement in the following year (see figure #7). If the actual earnings reported by the employer for the prior year is 25 per cent more than the estimate, an underestimating penalty will be charged. The penalty is calculated by subtracting 125 percent of estimated earnings from the actual earnings and multiplying by the assessment rate for the year. The penalty will be 10 per cent of that assessment (see figure #7). If you have a Deferred Payment Plan, you will need to contact us to have it updated when your payroll changes. Changes to your business activities Any change to your business activities may affect your classification and the rate that you pay. #7. SAMPLE CALCULATION - Underestimating penalty For example, (assuming a rate of $3.18 per $100 of payroll) an employer who provides a $100,000 estimate and does not update their estimate throughout the current year will receive a penalty of $ when they report their actual payroll of $230,000 on their Employer Payroll Statement. Assessment based on Employer s Actual Payroll Assessment based on Payroll estimate x 125% Difference $230,000 x 100,000 x $3.18/ % x $3.18/100 $7, , , Underestimating Penalty $3,339 x 10% $ Page 10

16 #8. Quarterly Reporting Requirements Statement Reporting period Reporting deadline 1st Quarter January 1 - March 31 April 15 2nd Quarter April 1 - June 30 July 15 3rd Quarter July 1 - September 30 October 15 4th Quarter October 1 - December 31 January 15 #9. Late Reporting Penalties: Quarterly Assessment Amount Penalty $ $ $12.50 $ $ 1, $25.00 $ 1, $ 12, $ $ 12, $ 24, $ $ 25, and over $ Restructuring If your business has been incorporated, unincorporated, or has been restructured in any other way, it is important that you contact us as it may change your reporting requirements. Contacts You are asked to provide us with the names of individuals that we contact for various purposes at the time of registration or when setting up for the web. If any of these individuals leave your organization, it is important that you advise us and provide the name of the new person who will be filling that role. Otherwise individuals who have left your organization may still be able to access or obtain information on your account. It is also important that you inform the Commission of any changes to your mailing/site addresses or telephone numbers in order for us to have your most up-to-date contact information. Change of ownership You should inform the Commission if your business has been purchased or transferred to a new owner or if you are the new owner. A new owner may be responsible for any unpaid assessment amounts of the previous employer. You can request an audit to ensure you are aware of all liabilities. Closing your operation You should contact the Commission as soon as possible if your firm ceases business operations. You will have to report your firm s actual payroll, in writing, from January 1 of the current year to the date operations ceased. We will then adjust your assessment accordingly. We may send an auditor to review your accounting records so that final adjustments can be made to the account. If your actual payroll is less than originally estimated, you may be entitled to a refund. Records to be kept Employers are required to maintain accurate financial records including records for all employees and information related to contracts. These records must be retained for six years so that they can be verified by the Commission. Page 11

17 Special Coverage Optional personal coverage (OPC) This coverage can be applied for by proprietors, partners and independent operators in accordance with the following terms: 1. Premiums for the period of coverage must be paid in full at the time of application. 2. Coverage is in effect from the date of receipt of the application and payment and approval by the Commission or from the coverage date requested in the application, whichever is latest. 3. Coverage automatically expires on December 31 of each year, or on the date specified on the application, whichever is earliest. 4. In the event of a work-related injury, proof of earnings must be submitted with a claim for lost-time benefits. Benefits will be based on the actual amount of earnings loss, but in no case will exceed the amount of coverage requested or the maximum compensable earnings specified by the Act. 5. The maximum coverage purchased cannot exceed the maximum compensable earnings specified by the Act (e.g., for 2011, the maximum coverage is $51,595 per year or $ per day). 6. The minimum coverage is $12, per year or $32.88 per day and the maximum period of coverage is January 1 to December 31. The minimum period of coverage is 28 days. There is also a nonrefundable minimum assessment of $50. Figure #10 provides a sample calculation for Optional personal coverage. To obtain personal coverage, contact the Commission and complete an independent operator questionnaire. If it is determined that you are an independent operator, the Commission can send you an optional personal coverage application form to complete and return with the appropriate premium. Note: All optional personal coverage forms must be signed by the applicant. For new applicants, please contact an Employer Registration Representative at: (709) For renewal of existing coverage, please contact an Employer Assessment Representative at: (709) Householder coverage Householder coverage is non-compulsory coverage that can be applied for by a householder when hiring other individuals to do work in or around the residence of the householder in accordance with the following terms: 1. Premiums for the period of coverage must be paid in full at the time of application. 2. Coverage is in effect from the date of receipt of the application and payment and approval by the Commission or from the coverage date requested in the application, whichever is latest. 3. Coverage automatically expires on December 31 of each year, or on the date specified on the application, whichever is earliest. 4. Coverage is only extended for the worker(s) listed on the householder coverage application form. #10. SAMPLE CALCULATION Optional Personal Coverage Example: the 2011 base rate for plumbing is $2.66 for every $100 of payroll. This means that a plumber who has been deemed by the Commission to be an independent operator and would like to purchase the maximum optional personal coverage for the minimum period of time would pay a total assessment of $ in Amount of Daily Coverage x Number of days x Assessment Rate/100 = Total Premium $ x 28 days x 2.68/100 = $ Page 12

18 5. The minimum period of coverage is 28 days and the minimum coverage is $ The maximum coverage is the maximum compensable earnings as specified by the Act (e.g., for 2007, the maximum compensable is $48,425 per year per worker or $ per week), and the maximum period of coverage is January 1 to December 31. There is a non-refundable minimum assessment of $ In the event of a work-related injury, proof of earnings must be submitted with a claim for lost-time benefits. Benefits will be based on the actual amount of earnings loss, but in no case will exceed the amount of coverage requested or the maximum compensable earnings specified by the Act. Student coverage If you are directly paying students to work in your business, they are considered to be your workers. You must pay the Commission assessments on their earnings and they are covered in the event of a work-related injury. If your students are not being paid by your company but are on a work-term from any of the educational institutions listed below these students are covered under the Act by the provincial Department of Education in the event of a work-related injury. The employer does not have to pay assessments and is protected from liability under the Act. Memorial University of Newfoundland College of the North Atlantic Centre for Nursing studies, Eastern Health Care Corporation Western Regional School of Nursing, Western Health Care Corporation a School as defined by The Schools Act, 1997 If you are hiring students and the funding is coming from HRSDC/Service Canada, the students are covered under the Act. You are required to include these earnings on your Employer Payroll Statement and you may be allowed to deduct the amount of HRSDC/Service Canada wage funding from your total payroll (see HRSDC/Service Canada wage funding on page 6). If you allow individuals who are on a federal-government program or the Student Work and Services Program (SWASP) to complete unpaid, on-the-job training at your business, you should check with the Commission to determine whether these students are covered under the Act. If students are participating in an unpaid work-term from a private educational institution or out-of-province educational institution, they are not covered under the Act. Therefore, the employer is not protected from liability, and a civil action may be possible in the event of a workplace injury. If students do not fall into one of the previous scenarios, or you are not sure which scenario best describes your situation, contact the Assessment Analyst at: (709) Out-of-province coverage Section 51 of the Act provides compensation for the workers of an employer in NL who are injured outside the province in the course of their employment. Generally, in order for coverage to be extended, the following conditions must be met: 1. The employer must be registered with the Commission, have a base of operations in the province, and continue to employ persons in the province while the worker is employed outside the province. 2. The worker will have worked for Page 13

19 the employer in this province prior to being assigned outside and will continue to work for the employer upon their return to NL. 3. The residence and usual place of employment of the worker is NL. 4. The worker remains on the payroll of the employer in NL while employed outside and assessments must be paid on those wages. 5. The worker and/or his/her dependents are not entitled to compensation under the law of the place where the injury occurs. It is important for employers to check with the workers compensation authorities (if applicable) in the jurisdiction where the worker is sent to determine if registration is required in that jurisdiction. 6. The work outside the province is of a temporary nature. 7. The employer must not have a permanent place of business in the other jurisdiction. Cases outside these guidelines will be considered on an individual basis. Even though the Commission extends compensation coverage to the workers of an employer in NL while working outside this jurisdiction, the immunity from suit protection provided by the Act is only valid inside the boundaries of NL. Requests for out-of-province coverage can be faxed to: (709) or inquiries can be directed to the Assessment Analyst at: (709) The request must include: the employer s name; firm number; worker(s) name(s); worker(s) address(es); the duration of the work outside the province; the jurisdiction where the work will be performed and confirmation that outof-province conditions have been met. Industrial classification system Classification system The Commission s classification system is based on Statistics Canada s Standard Industrial Classification (SIC) system, which has been modified to better reflect the business environment in NL. All registered employers are assigned to a Newfoundland Industrial Classification (NIC) code based on the description of industry they provide on their registration form. This classification encompasses all work incidental to the production of goods and services provided. Incidental is where an operation, regardless of whether separated by location or payroll, exists to service the primary industry of the firm. There are over 600 NIC codes; however, for many of these, the payroll and cost experience are not stable enough to allow a fair assessment rate to be calculated. Because of this, the Commission organizes the NIC codes into industry groups. The Commission currently has 80 industry groups. In creating industry groups, we consider two main factors: similarity of business activity and cost experience. The claim cost experience for each NIC code is examined every year to ensure that the code is still in the appropriate industry group. If the cost experience changes significantly, the NIC code may be moved to a more appropriate industry group. Multiple classification If an employer is operating in two or more distinct industries, the Commission may consider classifying the employer in two or more separate NIC codes. Employers who qualify for multiple classification will have two or more employer accounts. Page 14

20 We permit separate NIC code classifications only on the basis of industrial undertaking, not on the basis of the workers occupations. Separate NIC codes are not permitted if the operation or activity is a supportive, inescapable or ancillary part of the firm s primary industry. For example, a manufacturing firm which maintains a sales division or sales outlet to sell its own products is not permitted a separate sales category; rather the sales are considered an inescapable part of the firm s manufacturing operation. To qualify for multiple classification, your firm must meet the following criteria: the operation must be one that is performed by specific personnel as their sole function; separate payroll records must be kept for each operation; the operations must generate revenue independently of each other; the services of each operation must be offered to the general public or to non-affiliated companies; the operation must not be an incidental or a supportive part of the firm s primary industry. Please note that the primary responsibility to advise the Commission of a change in industrial classification or other aspects of the business rests with the employer. If you need further assistance, contact our Financial Analyst at: (709) Base assessment rates Base assessment rates for each industry group are established each year based on an analysis of cost experience for injuries that occurred in the five previous years. For example, for the 2012 rates, cost experience for injuries that occurred between 2006 and 2010 were used. Costs in 2011 were not used because the rates were calculated in 2011 and the year was not complete. However, adjustments made in 2011 prior to the rates being calculated and relating to payments made between 2006 and 2010 are included. Employers typically receive confirmation of their base assessment rate for the following year in October or November of the current year. Assessment rates by NIC code are available in the Commission s Assessment Rate Book, which is published annually. The Rate Book can be obtained by contacting a Commission office in St. John s, Grand Falls-Windsor, or Corner Brook. A copy is also available on our website at: PRIME PRIME is the Workplace Health, Safety and Compensation Commission s new employer incentive program. The program has two parts: the Practice Incentive and Experience Incentive. Practice Incentive The Practice Incentive recognizes employers for their good practices in the areas of occupational health and safety and return to work through a 5 percent refund on average annual assessments. Employers who meet PRIME s Practice Incentive requirements will be eligible for further refunds in Part II of PRIME, the Experience Incentive. The Experience Incentive recognizes employers for reduced accidents and injuries in their workplaces. Your first step is to comply with PRIME s Practice Incentive requirements. In early January, you and all other employers in the province will receive an Employer Payroll Statement. On this statement, you will be asked to answer questions concerning your health and safety and return-to-work practices in your workplace(s). There are five questions: 1. Do you have policies in occupational health and safety and return to work? 2. Do you have a trained health and safety committee(s) and/or representative(s)/designate(s)? Page 15

21 3. Do you have an injury reporting system? 4. Do you have the foundation of an occupational health and safety program? 5. Do you have the foundation of a return-to-work program? All employers must answer the first three questions, medium-sized employers must answer the first four and large employers must answer all five. To determine your category and your specific Practice Incentive requirements, go to and click on PRIME. Experience Incentive Employers who meet PRIME's Practice Incentive requirements will be considered eligible for further refunds in Part II of PRIME: the Experience Incentive. Only those employers who meet their Practice Incentive requirements can move on to receive refunds under the Experience Incentive. The work you do to earn a five per cent practice refund should lead to a healthier, safer workplace and getting injured workers back to work quickly and safely. The result should ultimately be reduced workplace accidents, injuries and lower claim costs. How the Experience Incentive works The Commission will take into account your past payroll assessments and industry classification and assign your organization an experience incentive range for the current year. This range is an estimate of the Commission's expectation of your claim costs in the year. Your range will be communicated through your annual payroll assessment invoice and your monthly PRIME status reports. Page 16

22 If your total claims costs fall below the bottom of that range at the end of the year, you will receive a refund; if your costs are higher than the top of the range, you may be required to pay a charge. If your costs fall within the range, there will be no refund or charge applied. Even if you are not eligible to receive a refund under the Experience Incentive because you did not earn the Practice Incentive, your firm will still be subject to charges, if applicable, for having total claims costs higher than the top of the range. Further details on the Experience Incentive, including your claims cost range for the year, will be sent to you after we receive your Employer Payroll Statement information. Hiring contractors Hiring individuals If you hire individuals under contract, they may be considered your workers. The Commission has exclusive jurisdiction to determine which individuals are independent operators and which individuals are workers. Please call: (709) when you hire an individual under contract to determine the individual s status with the Commission. If it is determined that they are your worker, you must report and pay assessments on the labour portion of the contract. As with any worker, you cannot deduct the assessment amount from your payment to them. If it is determined that they are an independent operator, you will not be charged assessments on the labour portion of the contract. Independent operators do not receive mandatory coverage under the Act but they may apply for optional personal coverage. If the individual does not have optional personal coverage for the full period of your contract, they have the right to file a civil suit against you in the event of a work-related injury. Hiring non-incorporated companies If you hire a non-incorporated company, coverage may not exist for the owners of that company, if they are the ones performing the work for you. However, they may apply for optional personal coverage. Under the Act, these companies are only required to register if they have employees and/or sub-contract work. Hiring incorporated companies All incorporated entities operating in NL must register with the Commission. Coverage is mandatory for all workers, including the owner, directors or managers, even if the owner is the only worker. Liability for assessments Under the Act, an employer (known as the principal) can be held liable for the assessments owing by their contractor/ sub-contractor on the labour portion of a contract of service. Contracts of service are defined as those services that are part of the principal s primary industry. For example, a contract of service would exist when a horticultural company sub-contracts out tree pruning. When the contractor/sub-contractor is not registered with the Commission or is registered with the Commission but has not met their reporting or payment requirements, the principal will be held liable for insuring the workers of the contractor/sub-contractor and paying the related assessments. If your contractor/sub-contractor is not registered or is not in good standing with the Commission, you are permitted, under Section 120 of the Act, to withhold payment from them for the assessment amount that the Commission will charge you on the labour portion of the contract (at the contractor/subcontractor's rate). You can contact us at: and provide us with the contract information to obtain this amount. To avoid being charged assessments for your contractors/sub-contractors, you should obtain a clearance letter from the Commission each time you Page 17