Decision #112/99 - Type: Workers Compensation
Preamble
An Appeal Panel review was held on July 22, 1999, at the request of the employer.
Issue
Whether or not the employer must pay a late filing penalty of $625.00 to the board.
Decision
That the employer must pay a late filing penalty of $625.00 to the board.
Background
Each year, all registered employers are required to file their annual statement of workers' earnings with the Board on or before February 28th. This statement requires them to provide actual workers' earnings for the previous years and an estimate of workers' earnings for the current year. Employers who do not provide their annual statement by February 28th are charged a late filing penalty. This penalty is based on 5% of the current year's assessment. Employers who do not provide their annual statement by April 30th are arbitrarily assessed and charged a 10% late filing penalty. The penalty can be assessed up to a maximum of $5,000.00
Effective January, 1997, the Board offered a quarterly reporting system to 500 larger firms as a pilot program. Under this system, employers are required to report actual workers' earnings on a quarterly basis. Employers were required to submit actual workers' earnings by the 15th day of the month subsequent to each quarter. For the 4th quarter, employers were required to report by the 20th day of January, 1998. Prior to each reporting deadline, forms are mailed to employers on the first day of the month. For example, forms due April 15th were mailed on the first day of April and so on. In 1998, in response to the concerns of employers, the quarterly due date was changed from the 15th of the month to the 20th of the month.
Where employers fail to provide workers' earnings within the due date, they are arbitrarily assessed and charged a late filing penalty of 5%. If the employer submits the form after the last working day of the month then they are charged a penalty based on 10% of the employer's quarterly assessment.
In 1997, the project was extended and offered to all firms with payrolls greater than $250,000. The project was again extended in 1998 with offers and applications sent to employers with payrolls greater than $150,000. This employer applied and was accepted into the new system in March of 1998.
In the fourth quarter of 1998, the employer filed their quarterly report on January 29th, 1999. The form was due January 20, 1999. Accordingly, the employer was charged a late filing penalty of $1250.00.
On February 4, 1999, the Chief Financial Officer contended the employer was late in filing its statement because it was their year-end and the information was not available until January 23, 1999. The Chief Financial Officer also stated that they must compile the earnings of 500 multijurisdictional truckers and allocate them among various provinces. In addition, they had time constraints with year end accounting and payroll.
In a letter, dated April 12, 1999, the Assessment Committee decided to waive 50% of the penalty imposed on the late filing charge. The late filing penalty was dropped from $1250.00 to $625.00. In reaching this conclusion, the Assessment Committee stated the following:
"In the case of the appellant, the committee understands the employer's concern regarding the late filing penalty. That is, the employer has had no prior history of default, the report was submitted shortly after the due date and was involved in their year end at the time. However, the Committee is obligated to ensure their decision falls within the provisions of Board policy and procedure. Notwithstanding the employer's good history and response time, the Committee is of the opinion the employer's year end was not beyond the employer's control based on Board policy and procedure."
On May 17, 1999, the employer appealed the Assessment Committee decision and requested a non-oral file review by the Appeal Commission. The file review was convened on July 22, 1999.
Reasons
According to section 60.8(6) of The Workers Compensation Act (the Act) the Appeal Commission is bound by the policies of the Board of Directors. Policy 35.40.10 allows the WCB the discretion to grant relief of late filing penalties up to 100% of the penalty amount where the cause of the default was beyond the control of the employer, the employer does not have a prior history of default, the employer has cooperated fully with the WCB, and the default does not extend beyond 60 calendar days.
In addition, we do not find that the cause of the recent default was beyond the control of the employer. Therefore, the employer must pay the late filing penalty of $625.00 to the WCB.
Panel Members
R. W. MacNeil, Presiding Officer
A. Finkel, Commissioner
R. Frisken, Commissioner
Recording Secretary, B. Miller
A. Finkel, Commissioner
R.W. MacNeil - Presiding Officer
(on behalf of the panel)
Signed at Winnipeg this 10th day of August, 1999