THE WORKPLACE SAFETY AND INSURANCE BOARD
APPEALS RESOLUTION OFFICER DECISION
DECISION NUMBER: 20170008
DATE: January 18, 2017
ACCOUNT: XXXXX
FIRM: XXXXX
OBJECTING PARTY: XXXXX
REPRESENTED BY: Self
HEARING: Hearing in Writing
HEARD BY: K. Azzopardi, Appeals Resolution Officer
ISSUE
The employer objects to the 2014 and 2015 Period Reconciliation not Reported (PRNR) charges on its Workplace Safety and Insurance Board (WSIB) account.
BACKGROUND
The employer first contacted the WSIB to register its operations in 1976. The employer is in the business of Siding Work.
When contacting the WSIB in June 2016, the employer was advised the account was not in good standing given that insurable earnings had not been reported. Payments were being made to the WSIB, however, the appropriate remittance forms had not been completed. Once explained, the employer provided the outstanding insurable earnings and the 2014 and 2015 years were reconciled.
The employer wrote a letter dated July 18, 2016 requesting penalties and interest be reversed.
The Account Specialist wrote the employer on August 26, 2016 and advised that charges in the amount of $3942.33 (comprised of Debit Interest and Premium Not Reported charges for 2014, 2015 and 2016) would be reversed. The PRNRs for 2014 and 2015 totaling $4106.34 were confirmed.
The employer objected to the decision confirming PRNR penalties via the Objection Form dated August 31, 2016.
I spoke to the employer on December 7, 2016 at which time S.S. agreed to a hearing in writing and confirmed the issue under objection. Further verbal submissions were made for review.
The issue is now before me for consideration.
AUTHORITY
14-03-12 Reconciliation
11-01-03 Merits and Justice
“Guidelines for Cancelling/Revising Non-Compliance Penalties or Interest.” dated August 26, 2008.
ANALYSIS
I have reviewed the account file and considered the arguments provided with the Objection Form and verbal submissions.
The objection is allowed in part based on application of the Workplace Safety and Insurance Act (WSIA), operational policy the aforementioned guidelines and my assessment of the evidence.
My analysis of this case goes back to 2014 and includes assessments up to and including August 31, 2016. Since that time, the employer submitted actual reconciled figures for 2014 and 2015.
The Account Specialist allowed cancellation of the Debit Interest and Premium Not Reported (PNR) charges for 2014, 2015 and 2016 totaling $3942.33 in a letter dated August 26, 2016. The remainder 2014 and 2015 PRNR charges in the amount of $4106.34 were confirmed.
The premiums for 2014 and 2015 were as follows:
2014 $ 18,824.61
2015 15,282.10
TOTAL PREMIUMS $34,106.71
The 2014 PRNRs ($3250.54) and 2015 PRNRs ($855.80) have been paid to date.
The employer submits that the interest should be cancelled since: they are a “small business and it is difficult to work through the red tape” and “little companies get lost in the shuffle.” Moreover, the employer states although she understands the penalties were explained on the statements, she read the balance as zero and “didn’t think anything of it.”
I do not believe it is the WSIB’s responsibility to get an employer to comply with their legal obligations to report and pay. It is not up to a creditor to pursue its debtor and, if unsuccessful, to absolve the debtor of all responsibility for not making good on his or her debts.
However, decisions under WSIB policy must be made considering all of the merits and justice of the case. The WSIB’s merits and justice rules say that a decision-maker can exempt an employer from a policy where applying the policy “would lead to an absurd or unfair result that the WSIB never intended.” Therefore, if it would be absurd or unfair, and against the WSIB’s intentions, to charge the amounts issued under this employer’s account, I can revise them.
The policy relating to PRNR penalties do not provide a guideline for cancellation or adjustment. In fact, policy 14-03-12 states:
Non-submission of Reconciliation form
If a form is not received by its due date, the WSIB calculates a premium for the reconciliation period and charges a penalty of one per cent of the calculated premium, up to a $1,000 maximum, for each month the Reconciliation form is not filed past the due date. The WSIB does not adjust this penalty once an employer submits the form with the reconciled premium.
However, over and above these policies, the WSIB does in fact consider the reality of the case. Its practice, which in my view is reasonable and represents the WSIB’s intentions, is set out in guidelines dated August 26, 2008 titled: “Guidelines for Cancelling/Revising Non-Compliance Penalties or Interest.” Those guidelines indicate that, for each filing penalty, “revision is acceptable if the penalty is not reasonable. This is defined as the penalty amount exceeding 10% of the annual actual assessment. The guidelines also allow for a decision maker to cancel or revise penalties as an opportunity to educate and build a relationship with the employer.
The 2008 practice guideline noted above allows a decision-maker to consider the cancellation of PRNR’s when:
- There has been a change in reporting frequency, i.e. quarterly to monthly, different from the prior year which has resulted in the issuance of a Reconciliation Form. As a result, the employer may be unaware of their obligation to complete a reconciliation. This is a one-time only cancellation.
- Form received on time but not processed by the due date. Delays in processing can also be the result of turnouts and suspense reports.
- There was a situation beyond the employer's control, such as an error / delay in processing within the banking system, a postal strike, fire, or flood that caused a delay in reporting.
- Penalties issued for premium remittance periods after the date of closure.
- Payment for reconciled difference is received by the due date and employer says remittance form sent with payment.
- Bank agent (lock box) error (delay in processing).
- For reasons / situations other than the above, cancel if: the employer has provided a reasonable explanation about why their obligation was not met and there has been a pattern of "filing compliance". Filing compliance is defined as not more than one instance in the last two calendar years of failing to meet revenue reporting obligations (reconciliation, period payroll amounts) and action taken / education given to prevent a further occurrence. Exclude from the count of occurrences situations that relate to errors or are beyond the employer's control.
Even though I find no justification for cancelling the penalties as requested by the employer, there is a basis for reducing some of them. The 2008 guidelines indicate that PRNRs may be revised if “the penalty is not reasonable” This is defined as the penalty amount exceeding 10% of the annual actual assessment.” The total of the 2015 PRNRs ($855.80) that were charged to the employer were not greater than 10 per cent of the annual actual payroll assessment. However, the PRNRs for 2014 do cross that threshold of reasonableness. By my calculation, which is to be confirmed by the operating area before implementing my decision, $1368.05 in PRNRs is to be cancelled. The following is my calculation:
2014
Actual assessment: $ 18824.61
10 per cent: 1882.46
PRNRs charged: 3250.51
Amount beyond 10 per cent: 1368.05
The employer has demonstrated a pattern of “good payment” to date to the extent that payments for premiums were made. As such, I find that in the specific circumstances, the 2014 PRNR charges should be revised to 10 per cent of the year’s premium. Therefore, the PRNR’s should be revised to $1882.46 for 2014. The 2015 PRNR’s do not exceed 10 per cent of the annual premiums.
As a final note, I understand that this is a small business that claims it was “lost in the shuffle.” However, a business owner has the obligation to comply with all relevant statutory requirements including the WSIA. I note resources were available to the employer to research its obligations either by telephone or the WSIB website.
In considering “the merits and justice of the case,” the fact that the employer has been granted a reduction of 2014 PRNRs should not be used as a precedent concerning its responsibilities. The reduction of penalties is now part of “the case” and the employer’s firm file. The guidelines from 2008 that I have applied in this decision refer to using the principles of cancellation:
Where appropriate, staff should be using these opportunities to educate the employer about their obligations, provide solutions to eliminate the circumstances from happening again and demonstrate fairness in managing their customer base.
Any future decision-maker will have to decide whether they think those purposes have now been served.
CONCLUSION
The 2014 PRNR’s are to be reduced to ten percent of the actual premiums for 2014. Therefore, the total PRNR’s for 2014 should be reduced to $1882.46.
The employer’s objection is, therefore, allowed in part.
DATED January 18, 2017
K. Azzopardi
Appeals Resolution Officer
Appeals Services Division