Accidents can happen in any workplace and when they do, the employer is reliable for medical bills and other expenses. Workers’ compensation helps protect employees from spending their own money when they are recovering from injuries on the job. Here’s a guide to understanding workers’ compensation in Canada.
Principles of Workers’ Compensation in Canada
Workers’ compensation in Canada began after Mr. Justice William Meredith appointed a royal commission to study the concept. The commission produced a document, titled the Meredith Report, which outlined the basics of Canada’s workers’ compensation system, most of which still exists in some form today. Those principles are:
- No-fault compensation. Employees are compensated for injuries no matter who is at fault.
- Collective liability. All employers share the cost of workers’ compensation through a common fund.
- Security of payment. Payment comes from an independent fund to guarantee that compensation is always available.
- Exclusive jurisdiction. The compensation board is the only authority on claims.
- Independent board. The compensation board is non-political and focused only on the needs of the employees and employer.
How Workers’ Compensation in Canada Works
Each province regulates workers’ compensation differently, so understanding how it works depends on the province in which you do business. The process starts when you register your business with the provincial Workers Compensation Board (WCB). Each province has different regulations surrounding who has to register.
Generally, unincorporated businesses without employees do not have to register. However. this isn’t always the case. In the Northwest Territories, you need to register with the WCB to get a business license, even without employees. In British Columbia, you must register if you are building your own home or if you regularly hire domestic workers like gardeners or housecleaners. Even if your business is not required to register with the WCB, you can receive optional coverage.
To register with the WCB and receive premiums, you must provide a complete description of your business activities. Premiums are given in rates of dollars per every $100 in payroll and differ depending on both industry and province. For example, in 2016 the province of Alberta had an average rate of $1.12 per $100, but Nova Scotia’s average assessment rate was $2.65. In 2009, the average assessment rate in Yukon was $3.00.
Your rate also depends on your experience rating, which is determined by the number of accidents and claims your company has. The safer your business, the lower your assessment will be. The more workers’ compensation claims you get, the more expensive your assessment will be.
Benefits of Workers’ Compensation in Canada
The benefits employees receive from the WCB can be complicated and can vary from province to province. These, however, are the most common benefits:
- Health care payments, sometimes including transportation, housing, and clothing
- Wages lost until full recovery
- Permanent disability if the employee is never able to return to work
- Survivor benefits, including a lump sum and sometimes annuity benefits
- Rehabilitation, both physical and mental
Who receives coverage by the WCB also differs from province to province. In Alberta, directors of a business are not automatically covered, but you can get optional coverage for them. In New Brunswick, however, you have to turn in a list of everyone who receives payment from your corporation no matter the age. So, if you run a small business and pay your children to do small jobs, even they are covered. In some cases, even contractors are covered by your WCB premiums.
This kind of complexity makes understanding local workers’ compensation laws incredibly difficult. If you’re expanding into Canada, consider finding a partner who knows the details of provincial law to guide you through the process to help you save time and money.
Velocity Global’s team of experts are available to help you with your expansion into Canada. Reach out to start exploring how a global partner can make your expansion simple and stress-free.