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99/02/19-04
THE WORKERS' COMPENSATION BOARD OF BRITISH COLUMBIA
RESOLUTION OF THE PANEL OF ADMINISTRATORS
Re: Assessment Penalties
WHEREAS:
Pursuant to Section 82 of the Workers Compensation Act, RSBC 1996, Chapter 492 and amendments thereto (the "Act"), the Panel of Administrators must approve and superintend the policies and direction of the Workers’ Compensation Board (the "Board"), including policies respecting compensation, assessment, rehabilitation and occupational safety and health;
AND WHEREAS:
Sections 38, 40, 47 and 49 of the Act authorize the Board to impose penalty, interest and other charges on employers for failure to comply with the remittance requirements;
THE PANEL OF ADMINISTRATORS RESOLVES THAT:
- The penalty and interest charges under sections 38(2), 40(2) and 49(1) of the Act are set at a rate of 8% per annum.
- The penalty charge under section 47(1) of the Act for failure to pay an assessment on time is set at a rate of 8% per annum.
- The penalty charge under section 47(1) of the Act for an overdue (outstanding) amount is initially set at a rate of 1% per month after 30 days. The Vice-President of Finance/Information Services is authorized to adjust this rate twice annually to maintain the annualized penalty rate at no less than 6 percentage points above the Bank of Canada prime rate.
- The penalty charge under section 40(2) of the Act will be calculated on the amount of the last remittance.
- There is a minimum charge of $25 under sections 38(2) and 40(2) of the Act.
- There is no minimum charge under sections 47(1) and 49(1) of the Act.
- There is no maximum charge under sections 38(2), 40(2), 47(1), and 49(1) of the Act.
- Under Assessment Policy Nos. 40:50:20 and 40:50:50, the Board may take into account any other circumstances for reducing or cancelling a penalty or interest charge which the Board considers are consistent with the Act and with the purpose of these penalty or interest charges.
- Under Assessment Policy No. 40:50:50, the Committee may reconsider
a previous decision:
- where there is significant new evidence, or
- where critical evidence was obviously overlooked, or
- where there was a clear error of law or policy in the previous decision.
- The Board Minutes which constitute BC Reg. 146/82 are repealed.
- The attached amendments to the Assessment Policy Manual are approved and take effect September 7, 1999.
- This resolution is effective September 7, 1999 and applies to all penalty,interest and other charges imposed after that date under sections 38, 40, 47 and 49 of the Act.
DATED at Richmond, British Columbia, September 7, 1999
| By the Workers' Compensation Board |
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| DON COTT, CHAIR, PANEL OF ADMINISTRATORS |
The Workers’ Compensation Board of British Columbia
Order of the Panel of Administrators
Re: Penalty Assessments Regulation
The Panel of Administrators of the Workers’ Compensation Board orders that Board Minute dated April 5, 1982, Re: Penalty Assessments, filed April 15, 1982 and published in the British Columbia Gazette, Part II, as B.C. Regulation 146/82 is repealed, effective September 7, 1999.
| By the Workers' Compensation Board |
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DON COTT, |
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ASSESSMENT OPERATING POLICY
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POLICY NO. 40:50:10 |
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PAGE 1 OF |
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SUBJECT: PENALTIES, INTEREST AND OTHER CHARGES |
DATE: |
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REPLACES ISSUE DATED: JAN/95 |
The Act authorizes the Board to charge penalties, interest and claim costs against employers who fail to provide payroll information and/or pay their assessments on time. The Board collects these penalties and other charges as assessments.
The main purpose of these penalties and other charges is to enforce
the assessment regulations with a monetary sanction against defaulting
employers help ensure that employers comply with their
remittance requirements, by imposing a monetary sanction on employers
who are in default. A secondary reason is that nonNon-compliance
represents a cost to the Board accident fund which,
in fairness to the employers who do meet their obligations, should be
borne by the delinquent employers themselves.
Sections 38, 40, 47 and 49 of the Act provide for the following types of penalties and other charges used by the Board.
1. Penalties that may be charged to employers who fail to submit their payroll or other information and/or their assessment payments on time. These penalty charges are authorized by Sections 38(2), 40(2) and 47(1).
2. Interest that may be charged to employers who under-remit, under-report, or pay less than they actually owe. This interest charge is authorized by Section 49(1).
3. Claim costs that must be charged when an employer is in default and an injury or occupational disease occurs to one of its workers during the period of default. Section 47(2) imposes this charge, although Section 47(3) says the Board may reduce or cancel this charge.
4. A penalty that may be charged to an employer's account when an amount remains overdue (outstanding) for 28 days or more after the original default. This penalty charge arises under Section 47(1). Note that there are two types of penalty charges under Section 47(1).
Further details about these penalties and other charges are set out in the policies that follow. Other sections of the Act relating to compensation or prevention standards may also result in additional sums being charged and collected as assessments.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 40:50:20 |
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PAGE 1 OF |
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SUBJECT: |
DATE: |
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REPLACES ISSUE DATED: MAY/98 |
- Circumstances that can result in a penalty charge
A penalty under Section 38(2) may be charged when an employer fails to meet the requirements in Section 38(1) to keep, in the province, particulars of the employer's payroll and/or to furnish payroll or other information to the Board as required.
A penalty under Section 40(2) may be charged when an employer fails to meet the requirements in Section 40(1) to make a return and remit an assessment on time.
A penalty under Section 47(1) may be charged when an employer fails to pay an assessment on time, in circumstances where the employer is not required to make a return at the same time.
Any assessment payments or payroll reports received after the due date are overdue, and the Board may apply the appropriate penalty charge against a delinquent employer at any time after the due date.
2. The amount of the penalty
The penalty charge under the above provisions is 8% of the amount due or estimated to be due. In order to calculate the estimated amount due, the Board may use the amount that the employer paid in the previous remittance period, or any other amount the Board considers appropriate.
3. Minimum and Maximum
These penalties are subject to a minimum charge of $25. There is no maximum amount on any of these penalties.
4. Review of a penalty
An employer can make a request in writing to the Assessment Department to have any of the above penalty charges reduced or cancelled. However, penalties for failure to remit or report will be reduced or cancelled only in limited circumstances; in the normal course, penalties will be sustained on review. The Board can cancel or reduce a penalty charge for the following reasons:
1. Error on the part of the Board.
2. Correct payment received but improperly coded.
This normally applies to a remittance being coded as unidentified cash,
. Bbut it could also include a subcontractor's
remittance paid on a prime contractor's account where the Employer Service
Representative is satisfied the payment should properly have been put
on the subcontractor's account.
3. Penalty assessments applied charged
after the cancellation date, except if they apply it
applies to a period in which an assessment liability exists
before the cancellation date.
4. Death of a family member, partner, proprietor, principal or accountant within the last period for which a remittance would normally be due.
5. Loss, destruction or theft of payroll records within the last three months prior to the penalty imposition.
6. Non-return of a remittance stub form
where there was a "nil" amount owing, either because of a nil payroll
for the period or because there was a sufficient credit in the account
to cover the assessment payable for the period. This reason will only
be accepted upon written declaration from the firm, its representative
or an Assessment Officer of the payroll figures from January 1 to the
end of the period being penalized.
7. Issued cheques which have failed to arrive;,
where the cheque ledger is received or a copy of it submitted showing
the cheque stubs immediately preceding and subsequent where
and it can be reasonably ascertained the WCB cheque
was issued within two weeks of the due date.
8. Where a remittance payment is received in
an Area Office or by an Assessment Field Officer on or prior to the
day before the cash cut-off date, it will be considered to have
been received by the Board. If an assessment penalty was applied, consideration
will be given to cancelling it once it is brought to the Unit’s
attention. Remittances received on or after the Cashier’s cut-off
date (regardless of whether it is the end of the month or not) will
be penalized and those penalties will be sustained.
8. Any other reason which the Board determines is consistent with the Act and the purpose of these penalties.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 40:50:30 |
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PAGE 1 OF 1 |
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SUBJECT: INTEREST |
DATE: |
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REPLACES ISSUE DATED: JUN/93 |
1. Circumstances that can result in an interest charge
The Employers must pay the full amount of the
remittance an assessment when it is due in order
to satisfy their payment obligations. An interest charge under
Section 49(1) may be applied when an employer under-remits, or pays less
than the employer actually owes to the Board.
2. The amount of the interest charge
The interest charge is 8% of the amount unpaid, or estimated to be unpaid. The Board may use the amount the employer paid in the previous remittance period to estimate the amount of the deficiency, or any other amount the Board considers appropriate. The interest charge is added to the amount of the deficiency and forms part of it.
3. Minimum and Maximum
There is no minimum or maximum amount on this interest charge.
4. Review of an interest charge
An employer can make a request in writing to the Assessment Department for a review of an interest charge. The Board will reduce or cancel interest charged against an employer where it is determined that the interest charge was imposed as the result of a material error of fact, law or policy by the Board.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 40:50:40 |
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PAGE 1 OF |
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SUBJECT: |
DATE: |
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REPLACES ISSUE DATED: MAR/95 |
1. Circumstances in which the costs of a claim are charged
Normally, when a worker is injured, the costs of the worker’s claim are charged to the subclass to which the worker’s employer belongs. However, Section 47(2) says the employer must pay the Board the full costs of a worker’s claim if, at the time of the worker’s injury or occupational disease, the employer has failed to register or provide payroll information to the Board under Section 38(1) or has failed to pay an assessment or part of an assessment. Section 47(3) gives the Board some discretion to reduce or cancel this liability.
2. The amount of the charge
This charge is generally the total cost of the worker’s injury or disease (health care payments, wage-loss benefits, rehabilitation costs, pension award, etc.). The amount may be reduced or cancelled under Section 47(3)(see below).
3. Minimum and Maximum
There is no minimum and maximum charge, although the amount charged is never greater than the total cost of the claim.
4. Review of the charge
An employer can make a request in writing to the Assessment Department to have this charge reduced or cancelled. Section 47(3) says the Board may reduce or cancel this charge, if the Board is satisfied that the employer’s default was "excusable".
The cost of injury assessmentcosts of a claim will
not be applied charged in the following cases
circumstances:
1. WCB error.
2. Employer initiated contact with the Board prior to the injury with a view to registration, providing that the employer has supplied the information required to proceed with a registration within 30 days of the original contact with the Board.
3. Employer is already registered (e.g. proprietorship incorporating where the proprietorship is currently registered).
4. Employer is a labour contractor who, under current
practice policy, would be considered a worker
if not registered.
5. The claim is for health care benefits only and the health care benefit costs are $100.00 or less.
- Employer has mailed an Employers' Registration Form that is postmarked prior to the date of injury.
- Any other circumstances which the committee considers are consistent with the Act and the purpose of this charge.
The final decision as to whether or not the delinquency charge
will be levied the costs of a claim will be charged against
an employer, the amount, and whether that amount will be reduced or
cancelled is made by a committee comprised of the Director of the
Assessment Department or Manager, Assessment Policy of the
Assessment Department and the General Counsel and Secretary to
the Board or delegate. The committee may determine its own procedures.
Pursuant to Section 96(2) of the Act, the committee can reopen and redetermine
any matter it has previously considered where there is significant new
evidence, or where critical evidence was obviously overlooked (as contrasted
with being considered and rejected), or where there was a clear error
of law or policy in the previous decision. Decisions of the committee
can be appealed to the Appeal Division.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 40:50:50 |
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PAGE 1 OF |
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SUBJECT: PENALTY CHARGE ON OVERDUE (OUTSTANDING) AMOUNTS |
DATE: |
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REPLACES ISSUE DATED: JUN/87 |
1. Circumstances that can result in this penalty charge
A penalty under Section 47(1) is charged when an employer has an overdue account (outstanding balance) for 28 days or more. This is the second type of penalty that can be charged under Section 47(1). It applies to all continuing overdue amounts. It is in addition to any penalty, interest or other charge that is imposed on the employer under the provisions set out elsewhere in this manual.
This penalty charge is imposed on the outstanding balance, until the overdue amount is paid in full.
2. The amount of the penalty
As of the effective date of this policy, this penalty is set at a rate of 1% per month, calculated on a per diem basis on a 28 or 35 day cycle, depending on the number of weeks in the calculation period. The penalty charge is calculated on the amount outstanding, or estimated to be outstanding, at the end of the cycle, and it is added to the outstanding amount and becomes part of it. The Board may estimate the amount due from the amount the employer paid in the previous remittance period, or by any other method the Board considers appropriate.
The Vice-President, Finance/Information Services may adjust the rate for this penalty, effective January 1 and July 1 of each year, to a monthly rate which reflects an annualized rate of at least six percentage points above the Bank of Canada prime rate.
3. Minimum and Maximum
There is no minimum or maximum amount on this penalty charge.
4. Review of penalty charge
An employer may make a request in writing to the Assessment Department for a review of the above penalty charge. In order to ensure that penalty charges will be applied in a fair and consistent manner, they will be reduced or cancelled only in exceptional circumstances. These circumstances include:
1. When the employer's account is cancelled and the balance consists of penalty charges only (all other outstanding amounts have been paid), and the balance is less than $15.00.
2. When the employer's account is active and all current assessments have been paid, and the balance consists of penalty charges only totalling less than $15.00.
3. When an amended payroll figure for a
previous year has been submitted reducing the assessment for
that year a remittance period, the any
penalty charges relating to that assessment may be reduced accordingly;
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4. When a non-remitting penalty
for failure to remit is cancelled, the penalty charges relating
to that penalty are also cancelled (see Section 40:50:20).
5. When penalty charges are applied to an account after the bankruptcy or receivership dates.
6. When a penalty charge is applied as the result of a Board error.
7. In order to facilitate the preparation
of the computerized Statement of Account by the first of the month,
the Board uses a "cash cut-off" of a few days before the end
of the month. If a payment is received in one of the Board's Area Offices
or by an officer in the field on or before the day prior to the monthly
cut-off, any penalty charges levied as a result of that payment not
being processed in the Head Office by the cut-off date are also cancelled.
7. Any other reason which the Board determines is consistent with the Act and the purpose of this penalty.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 40:50:60 |
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SUBJECT: PENALTY ASSESSMENT FOR INFRACTION OF SAFETY REGULATIONS |
PAGE 1 OF 1 DATE: REPLACES ISSUE DATED: JUN/93 |
The Act provides for the charging of a penalty assessment
for firms failing to comply with Accident Prevention Regulations. These
penalties are based on a percentage of the firm's assessment, depending
on the severity of the infraction. These penalties are levied by the Prevention
Division, and the only involvement of the Assessment Department is to
apply them to the billing system and to collect the charge from the employer.
Any enquiries related to these penalties should must
be forwarded to the Prevention Division.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 40:50:70 |
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SUBJECT: FIRST AID & SAFETY TRAINING PENALTY ASSESSMENT — SPECIAL RATE |
PAGE 1 OF 1 DATE: REPLACES ISSUE DATED: JUN/93 |
An employer who is required to install or maintain first-aid equipment and service, and who fails, neglects or refuses to make such provision, is liable for a special assessment rate. The Prevention Division determines the amount by which the employer's basic assessment rate will be increased, and advises the Assessment Department by memo. The only involvement of the Assessment Department is to apply the special rate to the assessment billing system, and to make any reductions or cancellations of the special rate upon subsequent instructions from the Prevention Division.
Any enquiries regarding this special rate must be forwarded to the Prevention Division.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 40:50:80 |
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SUBJECT: LATE RETURN OF EMPLOYER’S INJURY REPORT (FORM 7) PENALTY ASSESSMENT |
PAGE 1 OF 1 DATE: REPLACES ISSUE DATED: JUN/93 |
In the event of an injury to one of the employer's workers, the employer must complete an Employer's Injury Report and return it to the Board within three days (in most cases). Under Section 54(8) of the Act, the Claims Adjudicator has the authority to impose a penalty assessment on an employer who fails to comply with this requirement. The involvement of the Assessment Department is limited to applying this penalty to the account of the employer and collecting the charge. Any enquiries must be referred to the Claims Adjudicator involved.
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ASSESSMENT OPERATING POLICY
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SUBJECT: CONTACTING A DELINQUENT EMPLOYER |
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POLICY NO. 70:20:10 |
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PAGE 1 OF 1 |
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DATE: |
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REPLACES ISSUE DATED: |
If an employer has not paid an outstanding assessment
within 60 days from the date the assessment was originally made,
an overdue penalty charge of 6-1/2% is levied against the account for
28 days or more, a penalty charge may be applied as provided for in Section
40:50:50. Shortly after the Statement of Account is mailed to the
employer advising that the overdue penalty has been applied, a computerized
"First Letter" is sent to the employer stating that the matter of the
outstanding balance has been referred to the Collections Section for their
attention. The "First Letter" informs the delinquent employer that if
the account is not satisfied by the 25th day of that month (or the first
business day after the 25th), the Collections Section will proceed with
whatever steps it deems necessary to effect settlement.
Each month, the Collections Section receives a computer listing of overdue accounts classified by the dollar amount outstanding and the geographic area of the province in which the employers are registered. These accounts are assigned to the various Collections Officers on a geographic area and dollar amount outstanding basis.
Once a Collections
Officers hasve received their monthly overdue
accounts lists, they will begin a process known as "working" the accounts.
The first step in "working" an account is to examine the balance
to ascertain whether any inapplicable penalty assessments or overdue penalty
charges should be cancelled. After this is done, an attempt is made to
contact the delinquent employer by letter or by telephone, with the purpose
of collecting the outstanding balance or obtaining a firm commitment as
to payment of the balance. If a Collections Officer is "working" an account,
the Officer may decide to visit the firm personally if previous attempts
to contact the employer have been unsuccessful or if the employer has
been uncooperative. The purpose of a personal visit is the same as contacting
the delinquent employer by letter or by telephone, except that the Collections
Officer can identify any assets used in the business for possible future
legal action and obtain various other pieces of information in a personal
visit.
If the employer has not satisfied the account or made satisfactory arrangements to do so in the course of "working" an account, the Collections Officer will consider taking alternate steps to collect the outstanding balance, including legal action. However, before any such action can be taken, the delinquent employer should have received a minimum of the computerized "First Letter" and a manual "Final Letter", in addition to the monthly statements. The "Final Letter" usually gives the delinquent employer 10to15 days to satisfy the account, after which the Board may obtain a Judgment and exercise whatever rights it may have to enforce that Judgment without further notice to the delinquent employer.
40:50:00
S E C T I O N 40:50:00
PENALTY ASSESSMENTS
:10 Section 40(2) — Non-Return
of Remittances Penalties, Interest & Other Charges
:20 Penalty Charge for Under-Remitting
Penalty Charges for Failure to Remit
:30 Penalty Charges on Outstanding
Assessments Interest Charge for Under-Remitting
:50-:40 Cost
of Injury Prior to Registration
:50 Penalty Charge on Overdue (Outstanding) Amounts
:40:60 Penalty Assessment for
Infraction of Safety Regulations
:60:70 First Aid and Safety Training
Penalty Assessment - Special Rate
:70:80 Late Return of Employer's Injury
Report (Form 7) Penalty Assessment
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SECTION 70:10:00 - PENALTY CHARGES ON OUTSTANDING
BALANCES
Section 47(1) of the Act states that if an assessment
levied on an employer is not paid when it becomes due, the defaulting
employer is liable to and will pay as a penalty a percentage on the outstanding
assessment. When applied to a defaulting employer's account, these penalty
charges become enforceable in the same manner as the assessment itself.
When an assessment is levied on an employer,
the employer is informed by means of a computerized Statement of Account.
If the assessment liability is not satisfied within 25 days after the
original statement date, the overdue account is subject to a penalty charge
of 5% plus 1% for each additional month of default. However, after the
initial 25-day period has expired, the employer receives a computerized
"reminder" statement and a further grace period of 25 days before penalty
charges are applied. If the liability is not satisfied by the end of the
grace period, a penalty charge of 6% (5% + 1%) is applied and the account
is then subject to penalty charges of 1% per month thereafter on the unpaid
balance.
In order to be an effective means of ensuring
that assessments are paid by employers when they are due, penalty charges
must be applied on a fair and consistent basis. In view of this, penalty
charges may be cancelled only in exceptional circumstances. These may
include:
1. When the employer's account is cancelled
and the balance consists of penalty charges only (all other outstanding
amounts have been paid), and the balance is less than $15.00.
2. When the employer's account is active
and all current assessments have been paid, and the balance consists
of penalty charges only totalling less than $15.00.
3. When an amended payroll figure for a
previous year has been submitted reducing the assessment for that year,
the penalty charges relating to that assessment may be reduced accordingly;
4. When a non-remitting Penalty Assessment
is cancelled, the penalty charges relating to that penalty is also cancelled
(see Section 40:50:10).
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5. When penalty charges are applied to an
account after the bankruptcy or receivership dates.
6. When a penalty charge is applied as the
result of a Board error.
In order to facilitate the preparation of the
computerized Statement of Account by the first of the month, the Board
uses a "cash cut-off" of a few days before the end of the month. If a
payment is received in one of the Board's Area Offices or by an Officer
in the field on or before the day prior to the monthly cut-off, any penalty
charges levied as a result of that payment not being processed in the
Head Office by the cut-off date are also cancelled.
The Manager or Assistant Manager of the Collections
Section has the sole authority to approve the cancellation of penalty
charges up to a maximum of $50.00 per employer. Any request for a review
of penalty charges over $50.00 by an employer must be made in writing,
and such a request is considered by a committee comprised of the Collections
Manager or Assistant Manager, the Director of the Assessment Department
(or delegate) and the Director of the Finance Department (or delegate).
THIS IS NOW IN 40:50:50