APPEALS RESOLUTION OFFICER DECISION
DECISION NUMBER: 20250030
OBJECTING PARTY: Employer
REPRESENTED by: SELF
HEARING: HEARING IN WRITING
HEARD by: M. LA CIVITA, appeals resolution officer
DATED: JANUARY 24, 2025
ISSUES
The employer is objecting to the February 5, 2024 decision of the WSIB’s Employer Account Services Division, which registered their account, and assessed premiums, retroactively to January 1, 2020.
The employer is seeking their account activation date be changed from January 1, 2020 to January 1, 2024, and that premiums only be assessed from 2024.
BACKGROUND
In 2022, the Workplace Safety and Insurance Board (WSIB) identified the employer as potentially having an obligation to register based on information provided via an information sharing agreement with the Canada Revenue Agency (CRA).
The WSIB wrote to the employer on December 21, 2022 indicating that based on information the employer had provided to the CRA, the employer should also be registered with the WSIB. The letter explained that most businesses in Ontario with employees (including family members and sub-contractors) must register within 10 days of hiring, and indicated, “To register your business and/or receive answers to your questions, please contact the WSIB’s Registration Centre.”
On July 4, 2023, the WSIB wrote to the employer again, reiterating the information within the December 21, 2022 letter, adding that it was important for the employer to contact the WSIB regarding their registration requirement.
The WSIB again wrote to the employer on February 5, 2024 indicating it had identified the employer’s business as being potentially non-compliant with the registration requirements of the Workplace Safety and Insurance Act (WSIA). The letter noted that there had been three unsuccessful attempts to contact the employer (twice by letter, and once by telephone), and as the WSIB had received no response, it had created a WSIB account for the employer’s business and, as applicable under section 78(6) of the WSiA, had determined the employer’s premiums based on the payroll information provided to the CRA.
The letter informed the employer of their right to appeal the decision, by notifying the WSIB in writing, no later than August 5, 2024.
On February 5, 2024, a WSIB Account Specialist (AS), within the Employer Account Services Division wrote to the employer that their account had been registered effective January 1, 2020, under NAICS Code 453993, Cannabis Stores, Class I4. The communication also advised the employer’ of their right to appeal the classification decision.
The employer telephoned the WSIB in regards to the registration on March 7, 2024. Then, on April 5, 2024, the employer submitted an electronic registration (eReg) form to the WSIB, but as noted on file by an AS, the employer’s account had already been registered. The employer’s submitted eReg form documented that the employer had first hired workers in 2020, and that their primary business activity was ‘Cannabis Retail’.
On July 11, 2024, the employer made verbal and written requests for their account registration date to be changed from 2020 to 2024, saying that they had been diligent in registering and staying up to date with their WSIB obligations in 2024. However, they were unaware of the requirement to enrol in previous years. They indicated that the business had experienced a significant decline, as evidenced by their gross payroll, and that continuing to operate with additional debt would be overwhelming. Thus, they requested a reconsideration of the balances (premiums assessed) for prior years.
A different AS reconsidered and upheld the February 5, 2024 decision on July 25, 2024, and provided the employer an Objection Form for completion should they wish to proceed with a formal appeal.
The employer emailed their completed Objection Form to the WSIB on August 4, 2024. The form, which was dated July 31, 2024 signalled the employer’s objection to the February 5, 2024 decision that registered the employer’s account, and assessed its premiums, effective January 1, 2020.
The AS acknowledged receipt of the employer’s objection via email on September 17, 2024, indicating that they were in the process of referring the objection to the WSIB’s appeals department.
The employer’s objection was referred to the WSIB’s Appeals Services Division (ASD), where the employer was asked to complete and submit a Hearing Request Form to specify as to what type of hearing they wished the ASD to consider. The employer originally returned an unsigned form to the ASD, and upon request, submitted another form, which was signed, but did not indicate whether the employer was seeking a hearing in writing, or an oral hearing. The form noted only that if an oral hearing was approved, they planned to bring no witnesses.
Upon consideration of the hearing request form and the issue under appeal, I wrote to the employer on November 25, 2024 to advise that their objection would be resolved via a hearing in writing, and I allowed the employer 30 days to provide additional information/written submission pertaining to the appeal.
The employer has submitted no additional information to date, and as a result, the appeal is before me for review.
AUTHORITY
Legislation:
Section 75(1) of the Workplace Safety and Insurance Act, 1997
Section 78(6) of the Workplaces Safety and Insurance Act, 1997
Operational Policy Manual:
Published:
14-02-02, Registration
April 9, 2021
14-02-06, Employer Premium Adjustments
April 4, 2023
ANALYSIS
I have carefully considered all of the available information, legislation and relevant operational policies in reaching this decision, and have denied the employer’s appeal.
As explained under Policy 14-02-02, Registration, an employer is a person who has carried on, or is carrying on, a Schedule 1 or Schedule 2 business activity covered mandatorily or by application, and is the person in law who is responsible for the business obligations and liabilities to the Workplace Safety and Insurance Board (WSIB).
According to section 75(1) of the Workplace Safety and Insurance Act, 1997 (WSIA), every Schedule 1 and Schedule 2 employer shall register with the Board within 10 days after becoming such an employer. Policy 14-02-02 clarifies that employers that are mandatorily covered under Schedule 1 and Schedule 2, such as the employer, must contact the WSIB and provide information about their business within 10 calendar days of the date the first worker begins employment. They must also provide a completed registration form to the WSIB by the final day of the month following the month in which the first worker began employment. The WSIB will then register the employer, assigning them an account and determining the effective date of the account.
Employers who fail to meet all WSIB registration requirements are subject to non-compliance interest, charges and/or prosecution; however, an exemption from such non-compliance interest, charges and/or prosecution is available to non-compliant employers who, while remaining undiscovered by the WSIB, come forward to voluntarily disclose and correct their non-compliance.
Under Policy 14-02-06, Employer Premium Adjustments, when an employer comes forward voluntarily to disclose and correct previously unreported or under-reported insurable earnings, they are required to report and pay up to 12 months of premium adjustments retroactive from the date of disclosure. However, the 12-month retroactive premium adjustment is not applicable to employers who have been identified by the WSIB before their voluntary disclosure as the result of:
- the WSIB's information exchange agreements with the Canada Revenue Agency (CRA) or other authorities or administrations
- Stakeholder Compliance Services referrals
- audit notifications and discoveries
- Action Line referrals (anonymous telephone calls)
- revenue recovery activities
- decisions resulting from worker status reviews, or
- any other means of identification.
In the employer’s case, their requirement to register with and pay premiums to the WSIB was identified by the WSIB as part of an information exchange agreement with the CRA. Therefore, a 12-month retroactive premium adjustment is not applicable.
The February 5, 2024 letter, as issued by the Director of the WSIB’s Employer Account Services Division, identified the employer as potentially non-compliant with the registration requirements of the Workplace Safety and Insurance Act (WSIA), and indicated that an account had been created for the employer. The letter also communicated that the WSIB had taken action under Part VII, Section 78(6) of the WSIA to determine the employer’s premiums based on the payroll information they provided to the CRA in 2020 and 2021.
In circumstances involving employer non-compliance, Policy 14-02-06, Employer Premium Adjustments, allows debit adjustments to an employer’s account for any prior year. Whereas, in circumstances not involving employer non-compliance, Policy 14-02-06 limits debit or credit premium adjustments to employer accounts back to January 1 of the third prior year in the event of corrections or revisions to the earnings of non-registered employers. Therefore, even in accepting, as the employer has argued, that the employer was unaware of their requirement to register with the WSIB, the policy establishes that premium adjustments would be allowed retroactively to the third prior year.
In the appeal before me, the WSIB first identified the employer as potentially having an obligation to register in 2022. In a letter dated December 21, 2022, from the WSIB’s Chief Employer Services Officer, the employer was informed of the obligation, for most businesses in Ontario, to register, and was invited to register their business and/or to contact the WSIB with their questions. Then on July 4, 2023, in a letter from the WSIB’s Vice-President of Employer Account Services, the employer was reminded of the December 21, 2022 letter regarding their need to register with the WSIB, and was advised of the importance of contacting the WSIB.
Although the employer did not register their account or contact the WSIB upon receipt of these letters, it remains that the WSIB did notify the employer of the requirements for registration as early as 2022, and therefore, as I see it, 2022 is the date of notification, or the current year, with respect to premiums applicable to the employer’s account. Consequently, Policy 14-02-06, would allow premium adjustments to the employer’s account retroactively to January 1, 2019, i.e., to January 1 of the third prior year.
However, as the employer did not hire workers until 2020, it stands to reason that the employer’s premium adjustments would be limited to 2020. Therefore, I find the February 5, 2024 decision to register the employer’s account and apply employer premium adjustments retroactively to 2020, was made in accordance with the relevant and applicable WSIB policy and, thus, must be upheld.
As always, every decision made by the WSIB must be based on the merits and justice of the case, taking into account all of the facts and circumstances relating to the case. However, the obligation to decide each case on the basis of merits and justice does not authorize me to disregard relevant provisions of the WSIA or of WSIB policies. There may be rare cases where the application of a relevant policy would lead to an absurd or unfair result that the WSIB never intended, but I do not find this to be the case here.
I have considered the employer’s position, as expressed on their Objection Form, that they have operated in good faith in 2024, and that they were not aware of the requirement for mandatory coverage for their retail business. However, the letters of December 21, 2022 and July 4, 2023 both included links to the WSIB’s website, which contains information about employer registration, coverage, and classification. The website also houses the WSIB’s Employer Classification Manual which identifies the business activities and coverage status of each classification code.
In support of the employer’s position that they were unaware of their obligation to register, the shareholder has brought forth that they voluntarily registered an affiliated entity with the WSIB, despite the fact that the entity’s business did not require compulsory coverage. Nevertheless, having done so does not excuse this employer of fulfilling their responsibilities, as a business operating and employing workers in Ontario. Their workers had a right to claim for benefits in relation to work-related injuries, and would have been granted benefits, as merited, upon reporting such work-related injuries to their health care providers and/or to the WSIB itself.
The onus was on the employer to inform themselves of their obligations to the WSIB and to their workers. Moreover, as I see it, the existence of an affiliated registered employer, should have served to remind the employer to respond to the WSIB’s requests for registration by either registering, or at least, by telephoning the WSIB’s Registration Centre to make inquiries as to their coverage status.
The employer is also seeking an adjustment in their account effective date, from January 1, 2020 to January 1, 2024, and thus a reduction in their premiums, on the basis of financial hardship resulting from changes within their industry. According to the employer, due to regulatory changes implemented in Ontario in 2020, the retail cannabis industry became very saturated with competitors, which caused the employer’s business to decrease significantly from 2020 to 2024, in terms of location, staff, and overall revenue. They add that the business is restructuring in an attempt to save its last location, but that it is currently operating week to week, and cannot afford the retroactive premiums.
While I appreciate and sympathize with the employer’s situation, the employer’s account file indicates the WSIB has extended relief to the employer in the form of a phased payment plan. As noted under WSIB Policy 14-04-04, Collections Based on Financial Hardship, if an employer can demonstrate financial hardship, the WSIB may allow an employer to pay debts owed to the WSIB using a phased payment plan. In applicable circumstances, the WSIB sets the terms and conditions of the plan based on a financial risk analysis of the employer, using information provided by the employer. In the employer’s case, the WSIB allowed and implemented a phased payment plan based on the employer’s payment proposal and financial statements, as submitted on August 2, 2024, and to date, the employer has upheld the terms of the payment plan. Nevertheless, should the employer have questions or concerns with respect to the payments or the plan, I urge them to contact the WSIB’s Collections Department.
As pertains to the decision before me, which is the February 5, 2024 decision regarding the effective date of the employer’s account registration and premium adjustments, I am bound to follow the directives of the WSIA and the policies of the WSIB. As I find there are no exceptional circumstances that would allow me to depart from policy in this appeal, I am upholding the February 5, 2024 decision of the Employer Account Services Division, which registered the employer’s account and assessed their premiums retroactively to 2020.
CONCLUSION
The employer’s objection is, therefore, denied.
DATED January 24, 2025
M. La Civita
Appeals Resolution Officer
Appeals Services Division