For most employers in Ontario, paying insurance premiums to the
Workplace Safety and Insurance Board ("WSIB") is part of
the cost of doing business. To a large extent, the premiums owing
the WSIB are determined based on the employer's insurable
earnings, which, in turn, are commonly and understandably believed
to be the pay by hourly rates or salary received by its employees.
That said, and what come as a surprise to many employers, is just
how broad of an approach the WSIB takes in regards to what
constitutes "insurable earnings" for purposes of
In a document titled, Determining Insurable Earnings, dated
February 2, 2008, the WSIB took to setting out what it considers is
included as an insurable earnings. Stating its position, the WSIB
noted that an employer's insurable earnings can be determined
by looking to the amounts reported on employees' earnings
statements and any income reported in box 14 of their T4 slips as
gross earnings. This includes, among other things, income derived
Honorarium (greater than $500)
Room and Board
Employers that have not been properly calculating their
insurable earnings for purposes of calculating the WSIB premiums
could find themselves owing the WSIB significant amounts of money
in unpaid premiums. Pursuant to the legislation, not only does the
WSIB have the power to require employers pay "additional
premiums in an amount sufficient to rectify any previous
error" dating back two years, the WSIB may also direct the
employer to pay to the WSIB itself an amount equal to those same
For example, the WSIB sends a Notice of Audit Visit to Acme Inc
stating that a WSIB auditor will visit the employer on October 4,
2010. Acme requests a postponement of the visit until January 4,
2011 and the WSIB auditor agrees. The WSIB auditor visits Acme on
January 4 and discovers that Acme has underreported its insurable
earnings back to January 1, 2005 because Acme failed to include
room and board in calculating its employees' earnings. Acme is
liable to the WSIB for unpaid premium amounts. The audit being
concerned, initially, with the 2010 reporting, Acme's exposure
extends back to 2008. This means that as part of the Acme audit
review, the WSIB auditor will advise Acme to adjust its 2010
insurable earnings' reporting accordingly, and require a debit
adjustment for the unpaid premiums for the two prior years.
While the legislation does provide the WSIB with discretion to
adjust the amounts of monies owing where it is satisfied that any
incorrect calculations were not intentional and there was an honest
desire to pay the correct amount, there is no requirement on the
part of the WSIB to do so. Given that changes in the WSIB's
position respecting premium calculations can have significant
consequences to employers, employers are well-advised to remain
current on such affairs. Despite the legislation requiring the WSIB
notify employers of these types of changes, the legislation also
states that the failure on the part of an employer to receive any
such notice does not excuse them from payments being made in
accordance with the current manner of calculation required by the
WSIB. To this end, there is a significant onus placed on employers
to ensure they are operating in accordance with the current WSIB
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