Do You Have to Provide Workers’ Compensation Coverage?

In Canada, one of the first areas of the employment relationship to be regulated was Workers’ Compensation, with the first Workers’ Compensation Boards created during WWI. There are now Workers’ Compensation Boards in every province and territory in Canada, while federally-regulated employers are required to provide wage loss replacement benefits equivalent to the Workers’ Compensation Board that would apply, if employment were provincially regulated.

WCB coverage is a compromise.

Both employees and employers benefit from the relative certainty provided by a provincially administered fund that spreads insurance risk among employers of the same class.

Employers benefit because their liabilities for workplace accidents and illnesses are limited to the premiums paid. Employees benefit because they don’t have to pursue employers for damages in the courts and because the benefits available don’t rely solely on their own employer’s ability to pay.

With the exception of the federal jurisdiction, where it’s permissible for employees to co-pay wage loss replacement plan premiums, WCB premiums are fully employer paid.

Does this mean that in every other jurisdiction, every employer must pay WCB premiums on behalf of every employee?

The first step in answering this question is to determine which jurisdiction applies. For WCB purposes, either the employment is federally regulated or it is regulated by one of the provinces or territories.

Employments that are federally regulated are those listed in section 2 of the federal Canada Labour Code. These include specific industries, such as banking or broadcasting, as well as specific transportation activities, such as trucking or railroads that span provincial or international boundaries.

For a complete description view Employment Standards Jurisdiction – Which One Applies? You can also find links to each provincial and territorial Workers’ Compensation Board here.

For all other employers, employment is normally subject to WCB coverage in the province where the employment physically occurs. This may be different than the province of employment for source deductions, if this later is where payroll is processed.

For example, Lucille’s payroll is processed from her employer’s office in Mississauga, Ontario. Lucile lives and works in Manitoba and does not report for work to any permanent establishment of her employer. On this basis, Lucille’s province of employment for source deduction purposes is Ontario, but Manitoba has jurisdiction over employment standards and WCB coverage.

Where a province or territory has jurisdiction, the next step is to see if the employer is required to register with the WCB in that jurisdiction. Although WCB is the generic abbreviation, some jurisdictions have departed from the traditional “Workers’ Compensation Board” name.

For example, in Ontario this is the Workplace Safety and Insurance Board (WSIB) and in BC this is WorkSafeBC. A full list of WCBs is available here.

There isn’t a single rule in all jurisdictions that governs which employers must register, and for which employees premiums must be paid. Instead, every WCB has its own rules that govern the collection of premiums and the benefits provided. So, while the following describes general requirements, employers with any doubts should confirm with their own WCB whether they fall into one of the exceptions described below.

The general rule is that all employers subject to provincial jurisdiction have to register with that jurisdiction’s WCB.

For example, in BC, Ontario, Quebec, New Brunswick and Newfoundland and Labrador, there are only very limited exceptions from these requirements. In Ontario, some of the very few exceptions include employment in veterinarian or dentist offices. In New Brunswick, employers in the fishing industry with less than 25 employees are exempt from WCB coverage.

In jurisdictions where not all employers have to register with the WCB, the WCB maintains lists of the specific industries where WCB coverage is mandatory versus those where coverage is not required.

For example, in Alberta and Manitoba employers that provide professional services are largely exempt from WCB requirements. In Saskatchewan, certain kinds of farming operations are excluded, such as dairy farms and farms that raise only pigs or poultry. In Nova Scotia, work on ships or boats, where these fall under provincial jurisdiction, are largely exempt from WCB coverage. In PEI, exemptions apply for those employers engaged in farming or fishing.

Where WCB coverage is not mandatory, based on the employer’s industry, there may be facilities for employers to opt into WCB coverage.

For example, Saskatchewan and Manitoba permit employers operating in industries where coverage is not mandatory to register with the WCB, pay premiums and provide employees with WCB coverage.

Where some industries are exempt from mandatory WCB coverage, it’s important to note that these exemptions are rarely written right into the legislation itself.

In some cases, the WCB concerned has direct control over listing industries where WCB coverage is mandatory versus those where it is not. In other cases, changes require the government concerned to amend the regulations that define the lists of mandatory or excluded industries.

These lists are subject to change over time because the economy changes and new industries are always developing.

Written by Alan McEwen

Alan McEwen is a Vancouver Island-based HRIS/Payroll consultant and freelance writer with over 20 years’ experience in all aspects of the industry.

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