Decision #10/20 - Type: Workers Compensation
The employer is appealing the decision made by the Workers Compensation Board ("WCB") that the firm is required to pay the late payment interest charge. A file review was held December 18, 2019 to consider the employer's appeal.
Whether or not the firm is required to pay the late payment interest charge.
The firm is required to pay the late payment interest charge.
On March 7, 2019, the firm was sent a statement indicating a payment was due March 31, 2019.
On April 5, 2019, the firm was issued another statement indicating an outstanding balance along with a late payment interest charge due a payment not being received by March 31, 2019.
The firm contacted the WCB on April 18, 2019 and requested that the interest charge be removed from their account as they had not received the statement until the first week of April and had paid in full on April 9, 2019. The firm received the second statement with the late payment interest charge noted after April 9, 2019.
A WCB Assessment Account Representative (AAR) advised the firm on April 18, 2019 that the late payment charge could not be reversed. Pursuant to WCB policy, the firm had a prior late payment interest penalty assessed on September 10, 2018 and relief from the penalty was available under the policy only if the firm had no prior history of any late or non-reporting penalties in the previous two calendar years.
On May 15, 2019, the firm requested the Assessment Committee reconsider the April 18, 2019 decision as the statement was not received before the due date and previous late payments were the result of administrative errors.
At a meeting on May 23, 2019, the Assessment Committee denied the firm's request for relief, noting the statements were printed and mailed out by the WCB on March 7, 2019, and that the firm had been penalized the previous year for late payment of premiums. The Assessment Committee reviewed the policy and concluded that relief by reversing the charge could not be granted as the firm had a previous late payment interest charge.
The firm filed an appeal with the Appeal Commission on June 6, 2019. A file review was arranged.
Applicable Legislation and Policy
The Worker's Compensation Act (the Act) establishes the process for providing notice to an employer of an assessment due from time to time in s 81 and specifically, in s 81(7) sets out that any notice that an assessment is due may be sent by mail to the employer and is deemed to be given on the date on which the notice is posted. The Act goes on to provide authority in s 86(2) for the WCB to charge interest to employers who have neglected to pay an assessment or any part of it, at a rate and on terms prescribed by regulation. Section 86(3) provides discretion to the WCB to grant relief from liability to employers for penalties on unpaid assessment amounts, if satisfied that the default was excusable.
WCB Policy 35.05.20, Paying and Refunding Premiums (the Policy) further outlines the expectations of the WCB with respect to payment of assessment premium. The policy provides:
Late Payment Interest Charges
Employers are required to pay premiums based on the timeframes set by the WCB. A late payment interest charge will be applied when employers do not pay premiums within the required time. The interest charge is based on a percentage of the outstanding balance that is past due and is prescribed by Regulation. The charge will be added to the employer’s account.
The Administrative Guidelines to this policy outline that generally, the date the WCB receives payments is the date used to determine whether interest applies. Dates payments were mailed or submitted through a financial institution are not considered. The subject of when relief of late payment interest penalties will be considered is also addressed in these Administrative Guidelines, as follows:
Relief of Late Payment Interest
Assessment Accounts that receive late payment interest charges can request the WCB reconsider application of the charges. Requests for reconsideration should include the reason(s) for the late payment, and why the WCB should consider adjusting the interest.
The WCB will consider providing relief of late payment interest when:
1. The employer's payroll information has been received, and
2. The employer does not have a prior history of default, and
• Assessment accounts with any late or non-reporting penalties or late payment interest charged to their Assessment Account in the two prior calendar years are considered to have a history of default. If any of these penalties or interest were reversed entirely, they should not be considered part of the history of default.
3. The employer has cooperated fully with the WCB, and
• The Assessment Account is in good standing with the WCB.
• If this is the only criteria the Assessment Account has failed to meet to obtain relief of their late payment interest, the employer may request reconsideration again once their Assessment Account is in good standing.
4. If the late payment interest is more than $25.00, the cause or reason for the delay was beyond the control of the employer. This would include:
• The death or serious illness of an employee, an owner, or a family member of the owner(s) of the business.
• A natural disaster (e.g., flood or fire), where the employer has been directly impacted.
If the employer is not satisfied with the initial decision they may request the Assessment Committee review their reconsideration submission.
The employer's position is outlined in the Notice of Appeal submitted June 6, 2019. The employer acknowledges that it previously made a late payment and takes responsibility for that incidence. However, the employer states that in this instance, the notice of assessment was not received until after the date the payment was due and therefore it could not have made payment within the period required. The employer believes it should not be penalized for something outside of its control and therefore the interest charge assessed by the WCB should be reversed and the record of this late payment be cleared.
The question for the panel to consider is whether or not the employer is required to pay late payment interest charge. In order to find for the employer, the panel would have to determine that the employer is entitled to relief from liability for the interest penalty imposed and that the default was excusable. The panel was not able to make that finding.
The Act allows for relief from liability for penalties imposed for unpaid assessment payments where it is determined that the default in payment was excusable. The WCB Policy on Paying and Refunding Premiums, established by the Board, provides for the consequences of late payment or failure to pay premiums assessed against an employer. The Policy clearly sets out that if the employer does not remit payment by the due date, the WCB will apply interest and the interest charge will be added to the employer's account.
The Administrative Guidelines to the Policy provide guidance to the WCB in how the Policy will be applied in practice. The Administrative Guidelines outline the circumstances under which the WCB will consider granting requests from employers for relief from the obligation to pay late payment interest charges. These circumstances allow for discretion in circumstances including where the employer does not have a prior history of default, which is further described in the Guidelines as including assessment accounts with any late or non-reporting penalties or late payment interest charged to the account in the prior two calendar years.
The panel reviewed the employer's recent assessment account payment history as set out in the appeal file reviewed and noted the following:
• The firm made late payments throughout 2015 and interest penalties were applied on each late payment.
• In 2016, the firm made two late payments, with interest penalties applied.
• The firm made all premium assessment payments on time in 2017.
• In 2018, the firm made one late payment, with interest penalty applied.
The interest penalty in question is from 2019, when the firm made one late payment on the account, result in the application of an interest penalty of $6.14 being applied on April 5, 2019. With respect to this incident, the panel noted that the firm advised WCB on April 18, 2019 that the statement of account dated March 7, 2019 and due March 31, 2019 was not received until the "first week of April" in 2019. The firm indicated that it made payment thereafter on April 9, 2019 and subsequently received notice of the interest penalty applied on April 5, 2019.
The firm requested on April 18, 2019 that WCB remove the interest charge from its account on the basis that the statement was only received after payment was due. The panel noted that the Act sets out that notice of assessments owing can be sent by mail and that the notice is deemed to be given on the date on which the notice was posted. The file records here indicate that the assessment notice for payment due March 31, 2019 was dated March 7, 2019. The panel considers this notice to have been provided well in advance of the payment due date.
As noted above, the Policy does permit the removal of the interest penalty charge where the employer does not have a prior history of default, defined as no late or non-reporting penalties or late payment interest charged to the account in the prior two calendar years. Here, the file discloses that the employer does have a prior history of default in the previous two calendar years. Specifically, the employer made a late payment in 2018 and was charged late payment interest as a result. Therefore, the employer is not eligible, under this provision of the Policy, to have the interest penalty removed.
The panel did not find, and the employer did not suggest, that any other of the potential circumstances for removal of the penalty were applicable here.
The panel concluded, on the basis of the evidence reviewed and on a balance of probabilities, that the firm is required to pay the late payment interest charge.
The appeal is dismissed.
K. Dyck, Presiding Officer
J. Witiuk, Commissioner
M. Kernaghan, Commissioner
Recording Secretary, J. Lee
K. Dyck - Presiding Officer
(on behalf of the panel)
Signed at Winnipeg this 5th day of February, 2020