Public Decisions | The Appeal Commission

Decision #37/99 - Type: Workers Compensation

Preamble

An Appeal Panel review was held on February 15, 1999 following receipt of an appeal from the employer.

Issue

Whether the employer must pay a late filing penalty of $65.23 to the board.

Decision

That the employer must pay a late filing penalty of $65.23 to the board.

Background

The employer in this case is registered on the Workers Compensation Board (WCB) quarterly system wherein they are required to submit their quarterly reports and payments to the WCB no later than the 20th of the month following the end of the quarter. Failure to provide the above results in a late filing penalty of 5% of the employer's assessment and if received after the end of the month following the end of the quarter, 10% of the arbitrary assessment.

In this particular case, the WCB received payment in the amount of $652.29 on November 13, 1998 with the employer's report of worker's earnings being received on November 20, 1998. The due date for this information was October 20, 1998. As the report and payment was received subsequent to October 31, 1998, the employer was assessed a late filing penalty in the amount of $65.23.

The employer disagreed with the late filing penalty and filed an appeal with the Assessment Review Committee. The employer appealed on the basis that they had not received the quarterly statement for the third quarter and therefore should not be subject to the penalty.

On December 17, 1998, the Assessment Review Committee considered the employer's appeal and determined that the employer must pay the late filing penalty of $65.23. In rendering this decision, the Assessment Review Committee stated the following:

"The Quarterly system was implemented to allow employers to report actual workers' earnings after each three month period. Responsibility for filing the Quarterly Earnings Report and paying the assessment lies with the employer. Employers have been informed of their responsibilities under the quarterly system on more than one occasion. In this particular case, the employer was informed of the quarterly requirements on November 21, 1997 and March 9, 1998. The letter dated March 9th provided an example of the Quarterly Earnings Report and the Account Statement. As well, a calendar outlining the deadline dates on the new system was provided."

The Assessment Review Committee reviewed WCB Policy 35.40.10 which allows the WCB to grant relief of the late filing penalty based on certain criteria. In this case, as the employer was found to have a prior history of default within the past two years, it was determined that the late filing penalty could not be reduced.

In January, 1999, the employer appealed the Assessment Review Committee's decision to the Appeal Commission. On February 15, 1999, the Appeal Panel met to discuss this case.

Reasons

The issue in this appeal is whether the employer must make payment of the late filing penalty of $65.23 to the Workers Compensation Board (WCB). The relevant subsection of the Workers Compensation Act (the Act) is Section 86 which provides for penalties for failure to make returns, failure to pay assessments and for relief from penalties.

Subsection 86(3) states:

Relief from penalties

86(3) Notwithstanding anything in this section, the board, if satisfied that the default was excusable, may in any case relieve the employer in whole or in part from liability under this section.

The relevant WCB regulation in this appeal are regulation 280/91 as amended by 242/92, Interest, Penalties and Financial Matters.

Relevant WCB policy is Section 35. 40.10, Relief from Penalties and/or Interest Charges. The policy states in part:

"The WCB may grant relief of the penalty which would otherwise be imposed under subsection 86(1) according to the following criteria:

A. Policy

1. The WCB may grant relief of the penalty which would otherwise be imposed under Subsection 86(1) according to the following criteria:

b) A default will generally be considered excusable and relief of up to 50% of the penalty amount may be provided where the period of default is less than 30 calendar days, the employer does not have a prior history of default, and has cooperated fully with the WCB.

c) A default will generally be considered excusable and relief of up to 100% of the penalty amount may be provided 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."

File information indicates that the employer commenced participation in the WCB Quarterly Earnings Reporting Program on January 1, 1998. This mechanism allows a employer to submit reports of workers earnings and pay assessments to the WCB on a quarterly basis. The WCB Assessment Department notified employers participating in this program in "The 1998 WCB Quarterly Earnings Report Completion Guide" of the requirement to submit Quarterly Earnings Reports and Payments by the following specific dates:

The employer's third quarter assessment was due on October 20, 1998. As the WCB Assessment Department did not receive the employer's report and assessment, an arbitrary assessment of the employer's third quarter earnings was made. The employer was sent its account statement on October 30, 1998 notifying that its Quarterly Earning report had not been received and a arbitrary assessment of $652.29 was made. The employer was charged a 10% late filing penalty based on the arbitrary assessment.

File information indicates that the employer was previously charged a late filing penalty for submitting its 2nd quarter report 15 calendar days past the due date. As a result, the employer was charged a late filing penalty of $65.22. The penalty was later reduced by 50% to the $33.61 by the WCB Assessment Committee as the employer had no prior history of default.

We note that the employer applied to participate in the Quarterly Earnings Reporting Program and a WCB Quarterly Earnings Report Program Completion Guide was sent out in early April 1998. The WCB Assessment Department notified the employer in letters dated November 21, 1997 and March 9, 1998 of the requirement to submit payment and the report of workers earnings by a specified date otherwise late filing penalties would be assessed. Penalties would be assessed at 5%, if the assessment was received after the 20th and before the end of the month, or 10% if the assessment was received after the end of the month the report was due.

The employer has argued that it did not receive its third quarterly statement so the employer could not file. The only information received from the WCB was the employer's account statement, which was paid. The employer requested that the penalty be credited to its account.

We find that the employer was given adequate notice of the requirements and deadlines to submit reports and payments to the WCB. We further find that the appropriate penalties for late filing were specifically outlined to the employer in two separate letters and also clearly outlined in the Quarterly Earnings Report Completion Guide. The file indicates a prior history of default in the 2nd quarter.

After reviewing the file and the applicable policy and regulations concerning late filing, we find that the employer was appropriately assessed the late filing penalty and as a result of prior history of default, would not qualify for any relief of penalties. Therefore, the employer's appeal is denied.

Panel Members

D.A. Vivian, Presiding Officer
P. Challoner, Commissioner
R. Frisken, Commissioner

Recording Secretary, B. Miller

D.A. Vivian - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 24th day of February, 1999

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