Decision #172/18 - Type: Workers Compensation


The employer is appealing the decision made by the Workers Compensation Board ("WCB") that the employer is required to reimburse the WCB for retroactive premiums and penalties. A file review was held on November 14, 2018 to consider the employer's appeal.


Whether or not the employer is required to reimburse the WCB for retroactive premiums and penalties.


The employer is required to reimburse the WCB for retroactive premiums and penalties.


The employer contacted the WCB on November 6, 2017 to enquire about registration with the WCB. The employer was advised that it was not registered for WCB coverage and asked to provide the current year's, along with the past five years' payroll information. The WCB calculated the previous five years' retroactive premiums and penalties, as allowed under the Act, and provided the employer with an account statement showing the outstanding amount on December 7, 2017.

On December 14, 2017, the employer requested that the WCB reconsider the retroactive assessment, including the late filing penalties. The employer noted that he was new to his position and had just discovered that the employer had not previously registered with the WCB. He felt that as the employer had voluntarily disclosed to the WCB that they were not previously registered, they should not be required to pay the retroactive premiums and penalties. The employer further felt that the WCB should have an obligation to contact employers who are not registered to determine eligibility.

The WCB advised the employer, on January 9, 2018, that there was no change to their previous decision. The WCB further advised that pursuant to WCB Policy 35.05.10 Reporting and Verifying Payroll, the employer was to register with the WCB within six months of employing workers. The registration was to be effective the date an employer begins employing workers and could include, where applicable, retroactive registrations of up to five calendar years, plus the current year.

The employer appealed the WCB's decision to the WCB Assessment Committee on February 26, 2018 stating again the employer had voluntarily disclosed to the WCB that they were not registered and should only be required to pay the current year's outstanding premiums and not the retroactive premiums and penalties.

On March 21, 2018, the WCB's Assessment Committee advised the employer they were upholding the WCB's decision regarding prior year assessments and penalties. The Assessment Committee confirmed that the employer had been registered with the province's Corporations Branch in 2003 and it was reasonable to assume that the employer was employing workers prior to 2012, with payroll that the WCB was not assessing at the time. It was further noted that the workers of this firm were entitled to the benefits and services of the WCB since their initial date of hire and that the employer would have also been protected from legal action under the provisions of The Workers Compensation Act ("the Act"). The Assessment Committee further found that it was unfair for them to adjust the number of years of retroactive assessment for this employer, as the WCB applies retroactive assessments and penalties to other firms who neglected or failed to register as employers hiring workers. The Assessment Committee noted that no acceptable reason for the employer's non-compliance was provided.

The employer filed an appeal with the Appeal Commission on June 15, 2018. A file review was arranged.


Applicable Legislation and Policy

The Appeal Commission and this panel are bound by the Act, regulations and policies of the WCB Board of Directors.

Subsection 80(1) of the Act sets out the requirement of employers covered by the Act to furnish the WCB with an estimate of their payroll for the following year and at the close of the year furnish certified copies of the payroll.

Subsection 86(1) of the Act provides "Where a) an employer refuses or neglects to furnish the board, within the prescribed time, with a payroll return or other statement required under subsections 80(1)…the employer is subject to an administrative penalty under Subsection 109.7(1)."

Subsection 80(7) provides that where, for any reason, an employer liable to assessment is not assessed in any year, the employer is nevertheless liable to pay to the board the amount for which it should have been assessed; and payment of that amount may be enforced in the same manner as the payment of an assessment may be enforced.

WCB Policy 35.05.10, Reporting and Verifying Payroll (the "Policy") provides the principles to guide the WCB in establishing and collecting assessments from any employer, business or independent contractor who has coverage under the various provisions of the Act.

The Policy provides, in part:

Worker Coverage: Reporting Responsibilities for Employers

Under The Workers Compensation Act (the Act) employers are responsible for advising the WCB when employing workers. Based on the employer's activities, the WCB will determine if the employer is required to cover their workers (mandatory industries), or if they have the option of providing coverage for their workers (optional industries).

Mandatory Coverage

Employers in mandatory industries are responsible for providing payroll information to the WCB for the purpose of determining premiums. Employers need to provide payroll information to the WCB at the outset of employing workers and annually thereafter.

Penalties and Interest: Worker Coverage

Penalties for Late Reporting of Workers’ Payroll

Employers in mandatory industries are required to advise the WCB when they begin employing workers. If they do not advise the WCB within the prescribed time, a late reporting penalty will be applied to their account for each calendar year workers were employed.

Employers in mandatory industries as well as employers in optional industries who have elected optional coverage are required to report workers' payroll annually. If they do not provide their payroll information by the prescribed date, a late reporting penalty will be applied to their account. Late reporting penalty amounts are based on the employer's premium and are prescribed by Regulation. Penalties will not be adjusted for subsequent variations to the employer's payroll.

The Administrative Guidelines under the Policy provide, in part:

These guidelines outline the obligations and timelines employers are required to meet when registering/reactivating their account, reporting payroll and providing business information to the WCB. They also detail the penalties and interest that apply to Assessment Accounts that do not meet these obligations and timeframes.

Mandatory Coverage for Workers

For employers in industries not listed in Regulation 196/2005 of the Act, coverage is required and as such is referred to as "Mandatory" coverage. Coverage for the workers in these industries is in effect, regardless of the status of the employer's Assessment Account.

Registration/Reactivation of Mandatory Coverage

A business engaged in a mandatory industry should advise the WCB before they begin employing workers, but must advise the WCB within 6 months of employing workers. Their WCB registration/reactivation is effective the date they begin employing workers, and where applicable, will include retroactive registrations/reactivations of up to five (5) calendar years, plus the current year. In cases of employer misrepresentation, the WCB has the discretion to extend this period of retroactivity.

Late Registration/Reactivation: Mandatory Coverage

Businesses employing workers for more than six (6) months prior to contacting the WCB will be subject to a 5% late reporting/filing penalty in each calendar year they employed workers and did not advise the WCB. The 5% penalty is based on the premiums charged. This includes a penalty in the current year unless the registration/renewal occurs between January 1 and the 2nd working day in March - then no late-reporting/filing penalty will be applied for the current year.

Employer's Position

The employer's submission to the Appeal Commission provided:

The background to our appeal is stated in earlier appeals. We are asking for leniency in retroactively applying premiums for 5 years on the basis that as the incoming CFO I did the right thing by notifying the WCB in good faith when I realized that the company was not registered with the WCB. Policy 35.05.10 does state a retroactive period of up to 5 calendar years implying that there is the possibility of discretion in this regard. There are no doubt other companies out there that are operating without being registered with the WCB. It would be beneficial to all concerned if the WCB publicly offered companies a period of amnesty giving them the opportunity to come forward and ensure that they are properly registered with the WCB without being penalized with retroactive assessments.

In a February 26, 2018 letter to the WCB Assessment Committee the employer's representative noted that:

• the new CFO of the employer determined that the employer had not been paying WCB assessments. He contacted WCB and advised the WCB of the situation;

• the employer then provided the WCB with all the necessary information going back to 2012;

• the WCB proceeded to assess the employer retroactively to 2012;

• the employer found the WCB's actions to be very punitive, given it had voluntarily contacted the WCB to apprise it of the situation;

• the employer believes that the WCB has some responsibility to contact Manitoba companies that are not already registered;

• the employer is an early stage Manitoba based business with limited financial resources trying to employ Manitobans and grow its business;

• having to pay retroactive premiums and penalties is not helpful to the employer;

• the employer asked that it be assessed for 2017 and not prior years, given it had no claims;

• the employer noted that the WCB made no attempt to provide any latitude to the existing WCB policy.


This is an appeal by an employer regarding payment of assessment premiums and late payment penalties. The circumstances in this case are that an officer of the employer determined that the employer had not been complying with its statutory duty regarding the reporting of payroll. He advised the WCB of this and as a result, the WCB calculated the premium due for the years that payroll had not been provided and penalties for late payment.

The employer is seeking leniency in the retroactive assessment of premiums and related late filing penalties by the WCB which arose from the employer's failure to report payroll. For the employer's appeal to be approved, the panel must find that it has the jurisdiction or capacity within the Act or policies to forgive the payment of assessment premiums and the related penalties, and that this is an appropriate case to exercise such authority.

The panel notes that Section 80(7) of the Act provides that where for any reasons an employer liable to be assessed is not assessed, the amount that the employer would have been assessed is continuing liability of the employer.

The employer's argument is, in essence, that it has been forthcoming in reporting its failure to provide information to the WCB and its failure to pay the related liability (premiums and penalties) and therefore it should be released from responsibility for payment of this liability.

Upon consideration of the Act and policy, the panel is unable to find a basis upon which to forgive or write-off the assessment owed by the employer for the years during which it operated and did not pay assessments. The panel also finds that it does not have authority to forgive or write-off the penalties which have been assessed to the employer for its failure to pay assessments. The panel finds the language of the Act and policy applicable to this appeal are mandatory regarding the employer's obligations.

The panel finds that the premiums and the penalties are a continuing liability and were properly assessed.

The employer's appeal is dismissed.

Panel Members

A. Scramstad, Presiding Officer
A. Finkel, Commissioner
M. Kernaghan, Commissioner

Recording Secretary, J. Lee

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

Signed at Winnipeg this 7th day of December, 2018