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Order ending exemption for certain non-resident employers and workers from the application of Part 3 of the Workers Compensation Act
2001/03/20-02
THE WORKERS' COMPENSATION BOARD OF BRITISH COLUMBIA
RESOLUTION OF THE PANEL OF ADMINISTRATORS
Re: Order ending exemption for
certain non-resident employers and
workers from the application of Part 3 of the Workers Compensation Act
WHEREAS:
Pursuant to Section 82 of the Workers Compensation Act ("Act"), RSBC 1996, Chapter 492 and amendments thereto, the Panel of Administrators ("Panel") must approve and superintend the policies and direction of the Workers Compensation Board ("Board"), including policies respecting compensation, assessment, rehabilitation and occupational safety and health, and must review and approve the operating policies of the Board;
AND WHEREAS:
Pursuant to Section 2(1) of the Act, the Governors by order dated February 7, 1994 exempted from the application of Part 1 of the Act,
non-resident employers and workers temporarily working in British Columbia, who would have been excluded by Policy 20:30:40 of the Assessment Policy Manual prior to January 1, 1994, provided they are covered in another jurisdiction that provides compensation for occupational injuries and diseases;
AND WHEREAS:
The Board’s current policies relating to this exemption are provided in Policy No. 20:10:20 and 20:30:40 of the Assessment Policy Manual;
AND WHEREAS:
During 1999, the Workers Compensation (Occupational Health and Safety) Amendment Act, 1998 ("Amendment Act") was generally brought into force;
AND WHEREAS:
The occupational health and safety provisions in Part 1 of the Act were thereby repealed and a new Part 3 was added containing provisions dealing with occupational health and safety;
AND WHEREAS:
Section 27 of the Amendment Act provided that a person who was exempted from the application of Part 1 of the Act when Part 3 came into force, was also exempted from the application from Part 3, unless the Board ordered otherwise;
AND WHEREAS:
Under Section 106 of the Act, the definitions of "employer" and "worker" for purposes of Part 3 do not include "a person exempted from the application of this part by order of the board";
AND WHEREAS:
The current exemption for non-resident employers and workers from the application of Part 3 is not consistent with the broad purposes of Part 3;
THE PANEL OF ADMINISTRATORS RESOLVES THAT:
The exemption from coverage under the Act for non-resident workers and employers temporarily working in British Columbia, who have been excluded by the Governors’ order dated February 7, 1994 and by Policy No. 20:30:40 of the Assessment Policy Manual, is ordered ended in respect of its application to Part 3 of the Act.
Policy No. 20:30:40 of the Assessment Policy Manual is amended as shown in Appendix A.
Policy No. 20:10:20 of the Assessment Policy Manual is amended as shown in Appendix B.
The above order and policy amendments are effective August 1, 2001.
DATED at Richmond, British Columbia, April 17, 2001.
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By the Workers' Compensation Board
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| MAUREEN NICHOLLS, CHAIR PANEL OF ADMINISTRATORS |
APPENDIX A
Assessment Policy Manual Amendments
[Deletions Struck Through, Additions in Bold Italics]
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ASSESSMENT OPERATING POLICY
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POLICY NO. 20:30:40 |
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PAGE 1 OF 3 |
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SUBJECT: TEMPORARY EMPLOYERS |
DATE: MAY/98 |
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REPLACES ISSUE DATED: NOV/94 |
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The Assessment Department must administer registration requirements for two types of temporary employers: firms from outside the province who operate in B.C. on a temporary basis, and B.C. residents who become employers for short-term projects only. These are discussed below:
1. Out-of-Province Employers
Certain employers with no place of business in the province who temporarily carry on business in B.C., but do not employ a B.C. resident, are have been exempted from coverage under Part 1 of the Act by order of the Governors of the Board. (see policy 20:10:20).
If an employer does not meet the "temporary" criteria, registration and payment of assessment is required when the employer first comes into B.C.
In the trucking industry, the following criteria outline what is considered trucking in British Columbia . The criteria are:
(a) hauling between B.C. points, or
(b) hauling out of B.C., or
(c) being incorporated in B.C., or
(d) employing B.C. workers.
(A non-British Columbia firm hauling goods into the province, dropping them off and dead-heading out is not regarded as being in the trucking industry in the province regardless of the number of trips they make.)
If an employer is in the trucking industry in B.C., they may be exempted from the provisions of Part 1 of the Act under Section 2 (1) if:
(a) they are not incorporated in B.C., and
(b) they do not employ B.C. workers, and
(c) they are not hauling between B.C. points, and
(d) they haul goods out of B.C. six or less times per calendar year, and
(e) they have coverage in another jurisdiction that provides compensation for occupational injuries and diseases.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 20:30:40 |
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PAGE 2 OF 3 |
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SUBJECT: TEMPORARY EMPLOYERS |
DATE: OCT/99 |
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REPLACES ISSUE DATED: NOV/94 |
An employer who qualifies as an "independent firm" under Policy 20:30:20 and who hauls goods (or intends to haul goods) out of B.C. seven or more times per calendar year must register.
The determination of whether an out-of-province firm in all other industries is carrying on business in B.C. "temporarily" is made on the basis of the number of occasions the firm comes (or intends to come) into the province:
(a) If the firm comes (or intends to come) into the province for a total of 15 or more days per year, registration is required regardless of the number of occasions the firm comes into the province.
(b) If the firm comes (or intends to come) into B.C. for a total of ten to fourteen days as the result of three or more visits within the year, registration is required.
(c) If the firm comes (or intends to come) into B.C. for a total of ten to fourteen days as the result of one or two visits within the year, registration is not required.
(d) If the firm comes (or intends to come) into British Columbia nine days or less within the year, registration is not required regardless of the number of visits.
It must be noted that if an out-of-province employer establishes a place of business in B.C. or employs B.C. residents, that employer must register with this Board. The assessment of out-of-province employers is covered in Section 40:20:20 of this manual.
Responsibility For Out-of-Province Contractors Working In BC:
Where a contractor hires a labour contractor (determined by the labour contractor's activities in B.C.- see Policy 20:30:20 for a definition of labour contractor) from out-of-province to work in B.C., the contractor is responsible for the labour contractor's coverage unless the labour contractor is registered with the B.C. Board. This policy applies regardless of the amount of time the labour contractor spends in B.C. or the number of trips the labour contractor makes into B.C.
All contractors should be aware that under Section 51 of the Workers Compensation Act, a contractor and the person or firm he/she is doing work for are both liable for any WCB assessment that their sub-contractors fail to remit to the Board.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 20:30:40 |
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PAGE 3 OF 3 |
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SUBJECT: TEMPORARY EMPLOYERS |
DATE: MAY/98 |
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REPLACES ISSUE DATED: NOV/94 |
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2. Short-Term Projects (Temporary Accounts)
If a person becomes an employer under the Act for the duration of a short-term project only, registration with the Board is required, (subject to 20:10:20) and the Assessment Department will frequently establish a "Temporary Account" to provide coverage for the workers of that project. The most common example of a project of this nature is where an individual hired workers for the construction of that individual's own home.
A Temporary Account is only established if the project is of a non-recurring nature and will not be over one year in duration, and if an estimate of assessable payroll for the project can be reasonably established by the employer or the Assessment Department.
When a Temporary Account has been established, the employer is immediately billed for an assessment based on the estimate of payroll obtained at the time of registration. The employer also receives an Employer's Payroll and Contract Labour Report at the time of registration, which must be completed and returned to the Board when the project has been completed. The assessment for the project is then adjusted according to the figure contained on the report, and the employer will either pay an additional assessment if the original estimate was too low or receive a refund if it was too high.
APPENDIX B
Assessment Policy Manual Amendments
[Deletions Struck Through, Additions in Bold Italics]
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ASSESSMENT OPERATING POLICY
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POLICY NO. 20:10:20 |
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PAGE 1 OF 7 |
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Subject: Exemptions from Coverage |
DATE: Nov/94 |
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REPLACES ISSUE DATED: JUN/93 |
EXEMPTIONS
The Governors of the Workers' Compensation Board have approved criteria for the exemption from coverage of employers or workers.
The following will apply to all exemptions:
1. The Governors will, as a matter of policy, decide whether general exemption orders will be made under Section 2(1) of the Act. In making their decisions, the Governors will have regard, among other considerations, to the following principles:
(a) Section 2(1) creates a scheme of universal coverage, with exemptions being granted for exceptional industries or occupations whose circumstances do not fit the purpose and intent of the Act.
(b) Exemption orders will only be made in respect of industrial or occupational groups. An exemption order will not be granted to an individual person or to a business unless the person or business constitutes the entire industrial or occupational group.
(c) Although the following principles underlie the purpose and intent of the Act, an industry or occupation will not be automatically exempted because one or more of the principles do not necessarily apply:
(i) prevention of injuries and occupational diseases,
(ii) compensation is paid for earnings losses resulting from injuries and diseases up to a maximum wage rate, medical expenses are reimbursed and rehabilitation provided,
(iii) coverage is limited to employment relationships and activities,
(iv) compensation is no fault and in lieu of the right to sue,
(v) compensation is a cost of production for the products and services marketed by the employer, not a charge on the taxpayer, and
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ASSESSMENT OPERATING POLICY
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POLICY NO. 20:10:20 |
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PAGE 2 OF 7 |
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Subject: Exemptions from Coverage |
DATE: Nov/94 |
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REPLACES ISSUE DATED: JUN/93 |
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(vi) collective liability of classes of employers for compensation and other costs of the system.
(d) The following circumstances will not by themselves be sufficient to result in a general exemption order being made:
(i) wishes of employers and workers,
(ii) size of the employer's operations,
(iii) coverage through private disability plans, or
(iv) degree of risk of injury.
(e) Since the wcb is a tribunal charged with administering a statute, principles of good public administration should be applied.
2. The wcb Vice-President, Financial Services, or wcb officers designated in writing by the Vice-President, Financial Services, may, on request, grant or terminate voluntary coverage for an individual person or business by varying the Governors' general exemption order. This will, however, be limited to situations where making the variance would be consistent with the reasons for which the exemption order has been made.
The Governors have made the following general exemptions from coverage:
1. A person employed by the owner or occupier in or around a private residence, otherwise than for the purpose of the owner's or occupier's trade or business, or employed in serving the personal needs of the owner or occupier or their family is exempt where:
(a) the person is regularly employed for a definite or indefinite period on a weekly, monthly or similar basis for an average of less than
(i) 8 working hours per week, or
(ii) 15 working hours per week and the person is employed caring for children in the period immediately preceding and following school;
or
(b) the person is employed to do a specific job or jobs involving a temporary period of less than 24 working hours.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 20:10:20 |
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PAGE 3 OF 7 |
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Subject: Exemptions from Coverage |
DATE: Nov/94 |
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REPLACES ISSUE DATED: JUN/93 |
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It has been a fundamental assumption of workers' compensation that the cost of compensation is a cost of production and that these costs will be passed on to the purchaser of the product or the user of the service.
In the case of the homeowner or occupier who neither produces a product or service, the costs could not be passed on.
The exemption for domestic workers is based on two main factors, namely number of hours worked, and regularity of work. It assumes that the longer the hours worked and the more regular the hours, the more likely an employment relationship will exist, and vice versa. It exempts regularly employed persons working less than 8 hours a week and other persons doing a job lasting less than 24 hours. This assumes that a lesser number of hours worked regularly may suffice to establish an employment relationship than would be required for one isolated period of employment.
For regularly employed persons looking after children before and after school, 15 hours is substituted for 8 hours. This is to deal with what is probably the most common situation in which householders employ persons. The concern here is with the ability of the Board to administer coverage and limiting the extent of the Board's intrusion into the home.
This exemption would also ease the burden on the homeowner or occupier who casually hires grass mowers, baby sitters, repairers, and other service people for trying to determine compensation requirements and bearing the costs of their coverage.
2. Both spouses involved in an unincorporated business are exempt where one or both own the business. "Spouses" includes common law and same sex spouses.
examples:
(a) Where spouses are partners in the business (independent operators) and wish to have coverage for themselves, they may apply for Personal Optional Protection (see 20:50:10 - 20:50:50).
(b) Where spouses are paid workers in the business and wish to have coverage they may apply for a variance to the general exemption (voluntary coverage). If accepted, they will have coverage based on their actual earnings.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 20:10:20 |
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PAGE 4 OF 7 |
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Subject: Exemptions from Coverage |
DATE: Nov/94 |
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REPLACES ISSUE DATED: JUN/93 |
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Common-law spouse is defined as:
People who are not married but are known in the community as being spouses, and
(a) where there is a child from the relationship, having lived together for at least one year.
(b) where there is no child from the relationship, having lived together for at least 3 years.
Same sex spouse is defined as:
People of the same sex who are known in the community as being spouses and who have lived together for a period of at least three years, unless a child has resulted from the relationship (adoption, etc.) whereupon one year.
Spouses operating in a business raise difficulties regarding the determination of whether a employer/employee relationship exists, or whether it is a partnership.
Spouses have been exempted but not children as it is reasonable to assume that the spouse will have a role in managing a business, that the children will not have.
3. Non-resident employers and workers temporarily working in British Columbia, who are excluded by Policy 20:30:40 of the Assessment Policy Manual, are exempt, provided they are covered in another jurisdiction that provides compensation for occupational injuries and diseases.
Some workers and employers are excluded from coverage under the b.c. Act as a matter of constitutional law and others as they have no attachment to B.C. industry.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 20:10:20 |
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PAGE 5 OF 7 |
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SUBJECT: Exemptions from Coverage |
DATE: MAY/96 |
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REPLACES ISSUE DATED: Nov/94 |
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Examples of this:
(a) Consulates and trade delegations from foreign countries. They have no attachment to B.C. industry and are not considered employers for the purposes of B.C. or Canadian law.
(b) Air crew of a foreign carrier who are on turn-around in B.C. for a short period of time. They are not considered to have an attachment to B.C. industry (see British Airways vs. wcb, also policy 20:10:31).
(c) Experts or subcontractors from other Canadian jurisdictions who are in b.c on a temporary basis and who do not employ B.C. residents, and who are also covered by their home jurisdiction for workers' compensation.
It would be very difficult for these employers to determine their responsibilities and for the Board to effectively administer these very short term attachments to the B.C. work force. (see Policy 20:30:40)
However, unless required as a matter of constitutional law, the exemption described in this section does not apply to the occupational health and safety provisions in Part 3 of the Act.
4. Professional sports competitors (athletes)
It is the aim of the Workers' Compensation Board to prevent injuries and to regulate and ensure compliance by B.C. industry with those regulations.
1. To regulate most sports would mean changing the rules in order to reduce risk. This would result in changes to the method of play and therefore the game itself which would in many cases eliminate the attraction of the game to the customers.
This exemption does not apply to non-competing workers of a sports team (coaches, management, trainers or other support staff).
5. A Personal Financial Holding Company that complies with ALL of the following criteria
It is an incorporated body;
The only workers are the shareholders of the company;
No activities are carried out by the company except the management of the shareholders’ own personal financial investments, the assets of which consist solely of the following:
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ASSESSMENT OPERATING POLICY
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POLICY NO. 20:10:20 |
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PAGE 6 OF 7 |
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SUBJECT: Exemptions from Coverage |
DATE: MAY/96 |
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REPLACES ISSUE DATED: Nov/94 |
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(a) investments in publicly traded stocks and bonds, mutual funds, or limited partnerships where the company has no say in day to day management of the partnership.
(b) interest bearing financial instruments such as GICs, savings bonds, treasury bills or certificates for deposit.
(c) non-revenue producing land, buildings, or equipment where there is no development, construction, or direct rental activity.
The company invests only in its own assets and the assets of its principals.
A limited company which is granted an exemption under this policy must comply with all these terms at all times. If a company changes its activities, the principals of the company must immediately notify the Board for a reconsideration of its exempted status.
The Assessment Department is responsible for determining whether companies are exempted or not, based on the circumstances of each individual case.
Requesting Variance from Exemption:
1. Owners or occupiers of a private residence who are exempted by the Governors resolution (Schedule A of the Governors' Exemption Resolution, February 7, 1994) wishing to cover their workers, may do so by writing to the Assessment Department, completing a Voluntary Registration Form.
2. The employed spouse of a proprietor may request a variance from exemption by completing a Voluntary Application Form. If accepted by the Assessment Department, the proprietor will be assessed for the spouse on the actual earnings of the spouse, and coverage will remain in effect until cancelled by either the Board or the spouse.
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ASSESSMENT OPERATING POLICY
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POLICY NO. 20:10:20 |
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PAGE 7 OF 7 |
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SUBJECT: EXEMPTIONS FROM COVERAGE |
DATE: Nov/94 |
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REPLACES ISSUE DATED: JUN/93 |
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3. A non-resident employer exempted by Schedule A of the Governors' Resolution (see Policy 20:30:40 of this manual) may write to the Assessment Department, requesting a variance from exemption (voluntary coverage).
Requests for Exemption from Coverage:
1. Where an employer or individual wishes to apply for an exemption from coverage, they must write to the Assessment Department, stating their reasons for wishing an exemption.
The request will be reviewed, taking into consideration the issues stated in the Governors' Exemption resolution of Feb. 7, 1994 (See Exemption).
Where there are no extenuating circumstances, the request will be denied and the employer or individual notified in writing.
Where there are extenuating circumstances, the request, along with the Assessment Department's findings, will be referred to the Vice-President, Financial Services, who will decide whether to grant the exemption or deny the request.
2. Where an association, union or other group which represents an entire industry or group of workers, wishes to apply for exemption from coverage, they must write to the Policy and Research Department requesting an exemption and providing their reasoning. The Policy and Research Department will research the request and present the request along with their findings to the Governors for their consideration.