WORKERS' COMPENSATION A Guide For New Brunswick Employers - WorkSafeNB

DEFINITION OF AN “EMPLOYER”Under the WC Act of New Brunswick, an “employer” is: Every person having in their service under contract of hire or apprenticeship, written or oral, expressed or implied,any worker engaged in any work in or about an industry. A municipal corporation, commission, committee, body or other local authority established or exercising anypowers or authority with respect to the affairs or purposes, including school purposes, of a municipality. A person who authorizes or permits a learner to be in or about an industry for the purposes mentioned in thedefinition “learner”. A deemed employer. The Crown in right of the Province of New Brunswick, and of Canada, and any permanent board, commission, orcorporation established by the Crown in right of the Province of New Brunswick, or of Canada, in so far as they, oreither of them, in their capacity as employers, submit to the operation of this Act.DEFINITION OF A “WORKER”The WC Act of New Brunswick states that a “worker” means a person who has entered into orworks under a contract of service or apprenticeship, written or oral, expressed or implied,whether by way of manual labour or otherwise, and includes: A learner. An emergency services worker within the meaning of any agreement made under the EmergencyMeasures Act between the Government of Canada and the Government of New Brunswick in whichprovision is made for compensation with respect to the injury or death of such workers. A member of a municipal volunteer fire brigade. A person employed in a management capacity by the employer, including an executive officer of acorporation, where that executive officer is carried on the payroll.6

Coverage and Reporting cont’dWORKSAFENB CoverageMore than 14,500 businesses in New Brunswick arecovered by workers’ compensation insurance – a systemthat operates on the principle of collective liability foremployers.What are the advantages of coverage withWorkSafeNB?Workers’ compensation insurance offered throughWorkSafeNB is designed to compensate injured workersand protect employers from being sued by workers whoare injured on the job. A worker covered by workers’compensation, in exchange for compensation andrehabilitation services provided by WorkSafeNB, has noright of legal action against other employers or workerswithin the compensation system. The inability to suerelieves both employers and workers from the financialrisks associated with workplace injuries and illnesses.How do I know if I need workers’ compensationinsurance?Under the WC Act, all employers with three or moreworkers at any time during the year must register forcoverage with WorkSafeNB. These workers may befull-time, part-time, casual workers or non-registeredcontractors, subcontractors or brokers. This is referred toas mandatory coverage.Exception: An employer in the fishing industry mustregister for mandatory coverage when 25 or moreworkers are employed.principal will not be granted voluntary coverage. Theprincipal is responsible for all such subcontractors.What other types of coverage are available?Once mandatory or voluntary coverage is established,personal coverage may be requested for (i) a non-salariedofficer of a limited or incorporated company and (ii)a proprietor, partners and spouses of a proprietor orpartner. The coverage requested may not be less than 12,000 or greater than the maximum annual assessableearnings.Note: To determine loss of earnings, WorkSafeNB usesthe lesser of personal coverage purchased and actualearnings.How are contractors hired by my businesscovered?Contractors and subcontractors who are not individuallyregistered with WorkSafeNB are considered to be yourworkers for the purposes of workers’ compensationinsurance, since these contractors will meet the definitionof “workers” in this situation.What if I am self employed?Personal coverage is also available for self-employedindividuals if they have two or more work contracts.The coverage requested may not be less than 12,000 orgreater than the maximum annual assessable earnings.Can I apply for workers’ compensationcoverage even if I do not require mandatorycoverage?When fewer than three workers are employed, voluntarycoverage may be requested. Employers are eligiblefor voluntary coverage if they have two or more workcontracts (for example, not working exclusively for oneprincipal contractor). Payment of the assessment mustaccompany the application. Exception: An employer withfewer than three workers working exclusively for one7

Coverage and Reporting cont’dCONTRACTORS FROM NEW BRUNSWICKIf your business has awarded a contract to a NewBrunswick contractor, one of the following two situationswill apply:Unregistered ContractorIf the contractor you are doing business with is notregistered with WorkSafeNB because they employ fewerthan three workers, you (as the contractor’s principalemployer) will be assessed for their coverage, based onthe gross amount of the contract.Registered ContractorIf the contractor you are doing business with requiresmandatory coverage with WorkSafeNB due to the numberof workers they employ, you may not be assessed for theircoverage. However, the principal may be liable for anyunpaid assessment of a registered broker or contractor(please see Clearance Certificates, p. 14).What about students and part-time workers?If you are registered for coverage for workers’compensation insurance, all your workers are coveredwhether they are a full-time, part-time, temporary orcasual workers.Who is not covered?CONTRACTORS FROM OUTSIDENEW BRUNSWICKThe WC Act does not cover domestic servants, ArmedForces personnel, professional athletes and members ofthe RCMP. If your business is either a proprietorship orpartnership, spouses and children residing with you under16 years of age are not covered.If the contractor you are dealing with is outside ofNew Brunswick, this contractor must register withWorkSafeNB if:Can I recover my costs for workers’compensation coverage? They have three or more workers; and The duration of the job exceeds five days.Workers’ compensation is an employer expense andcannot be deducted from workers’ wages or salaries.However, an exception to this rule is outlined below.If the contractor is not required to register, you willbe responsible for their coverage, as noted in theUnregistered Contractor section (see above).Coverage InquiriesIf you are unsure of your coverage, callAssessment Services at 1 800 999-9775.8To avoid being assessed for unregistered out-of-provincecontractors, you should request a letter from the workers’compensation board or commission where the contractoroperates. This letter should indicate that the contractor’saccount is in good standing and that coverage hasbeen extended while work is being conducted in NewBrunswick. A copy of the letter should be submittedwith the list of contractors reported on the Form 100 –Employer Payroll Report to avoid further assessment inNew Brunswick.COST RECOVERY FROM UNREGISTEREDCONTRACTORSIf you are doing business with an unregistered contractor,you will be assessed for their coverage based on thegross amount of the contract. You are allowed to deductor recover the portion of the assessment for labour andmaterials, hired equipment, courier or mail service andjanitorial services from the contractor. Labour-onlycontracts cannot be charged back.

Coverage and Reporting cont’dWhat if I want to cancel my coverage?The following reasons most frequently apply tosituations where a business must close its account withWorkSafeNB: Going out of business. Business status change (please see Factors AffectingCoverage, p. 10).If my company is going out of business, how doI close my account?You can cancel your account with WorkSafeNB at any timeif your business has no workers. You will need to adviseWorkSafeNB in writing, and supply actual assessableearnings information up to the date of your businessclosure. With this information, WorkSafeNB can close youraccount and perform a final calculation of your premiumfor the calendar year that just ended to ensure that youhave not been over or undercharged for your coverage.Can I cancel coverage due to staff reductions orbusiness status change?Once you have obtained compensation coverage, itcannot be cancelled during the calendar year (January 1to December 31).If you need to set up a new account to reflect a newbusiness structure (such as going from a proprietorship toan incorporated or limited company), you need to adviseWorkSafeNB of the actual payroll from January 1 to thedate of business status change. You will need to completea new application form under the incorporated or limitedname. Afterwards, a new employer number will beassigned.If the account closure is due to a reduction in staff, youwill only be allowed to close the account on December31. When you receive your Form 100 in January of thefollowing year, you will have to indicate the actualassessable earnings for the previous year, and thatcoverage is not requested for the upcoming year sincethe business is no longer in a position that requiresmandatory coverage.The assessed premium for a contract is calculatedusing the following guide:Assessed PremiumThe assessed premium for a contract is calculated using the following guide:Labour only. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% of the contract valueJanitorial service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80% of the contract valueLabour and materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50% of the contract valueCourier and mail service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40% of the contract valueHired equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25% of the gross earnings for each worker,not to exceed the yearly maximum(includes trucks and/or brokers, tractors, backhoes, skidders, etc.)Therefore, if your business has an agreement with a contractor to provide snow removal services totalling 2,000, theassessment amount will be derived using 25% of the contract value, or 500 multiplied by your assessment rate. You areentitled to recover 100% of that assessed premium from the contractor.9

Coverage and Reporting cont’dFactors Affecting CoverageA number of factors can affect your WorkSafeNBcoverage. These are outlined below.WORKERS’ COMPENSATION COVERAGEWorkers’ compensation is in place for your workers fromthe time they arrive on your property or job site until thetime they leave (provided they are there for work-relatedpurposes).Are my workers covered when travelling?If one of your workers is in an accident while travellingto and from their usual place of employment, they arenot covered by workers’ compensation. However, if theworker is injured while travelling at your request andnot during their daily commute, they may be covered.WorkSafeNB reviews each case individually.Are my workers covered while working outsideof New Brunswick?Workers’ compensation insurance coverage may beextended beyond New Brunswick in cases where a workeris employed by a New Brunswick employer and workstemporarily outside the province.There are two types of coverage a New Brunswick workercan receive when working outside of the province:TEMPORARY COVERAGE FROM THERECEIVING JURISDICTIONThe employer must find out from the receivingjurisdiction (commission or board of destination) whethercoverage is mandatory in that jurisdiction. If it is, theemployer must obtain temporary coverage in thatjurisdiction. When coverage in the receiving jurisdictionis not mandatory, WorkSafeNB can recommend thatcoverage be extended.10EXTENDED WORKSAFENB COVERAGETo apply for extended WorkSafeNB coverage, theemployer must: Be a registered WorkSafeNB employer. Maintain a business operation within the province ofNew Brunswick. Provide WorkSafeNB with a written request forcoverage with the names of the workers to becovered. Ensure that these workers are included and reportedin the payroll.To qualify for this coverage, the worker’s usual placeof employment must be within the province of NewBrunswick.Notification processIn either of the above cases, the employer must provide awritten request – before the worker leaves New Brunswick– to WorkSafeNB, or the board in question. It mustcontain the names of the workers requiring coverage,their destination and corresponding time period.

Coverage and Reporting cont’dWORKERS’ COMPENSATION INSURANCE COVERAGE MAY BE EXTENDEDBEYOND NEW BRUNSWICK IN CASES WHERE A WORKER IS EMPLOYEDBY A NEW BRUNSWICK EMPLOYER AND WORKS TEMPORARILYOUTSIDE THE PROVINCE.IMMUNITY ISSUESIt is important to note that an extension of coverage forworkers temporarily outside New Brunswick does notprovide either employers or workers with immunity fromlitigation outside the province. Only registration with theother jurisdiction provides such immunity.What if my worker is injured while workingoutside of New Brunswick?If you are not required to register, or are not grantedregistration in the province where the accident occurred,your worker’s claim must be made with WorkSafeNBregardless of the accident province.If your worker is covered by workers’ compensation inthe accident province and in New Brunswick, the workercan choose to receive compensation benefits from oneprovince or the other, but not both.To apply for benefits from another province, the workermust sign a Form of Election (affidavit) indicating that theyare not applying for benefits in New Brunswick.There are some instances where neither one of thesesituations applies. In such cases, decisions on specificclaims are based on individual circumstances.When are my workers not covered?Injuries or occupational diseases that are not work-relatedare not covered by workers’ compensation insurance. Ifthe injury was caused by the worker’s serious and wilfulmisconduct, the worker may not be eligible for benefits.11

RegisteringTo establish workers’ compensation coverage, you mustregister your business with WorkSafeNB. The followingsections include information that will guide you in thisprocess.When should I open an account withWorkSafeNB for workers’ compensationcoverage?No. Some unregistered New Brunswick businesses andentrepreneurs request WorkSafeNB coverage becauseit is a required component of a tender opportunity.WorkSafeNB can only extend coverage to businesses thatmeet the requirements (number of workers) outlined inthe WorkSafeNB Coverage section of this publication.NEW EMPLOYERSWhat are the benefits of registration?New employers who qualify for mandatory coveragemust register with WorkSafeNB within 15 days of the firstday of operation, and must provide specific informationabout their operations and an estimate of the assessableearnings for the calendar year.If you are required to register for workers’ compensationcoverage with WorkSafeNB, and you do not, you exposeyourself and your business to the risk of litigation byworkers who may be injured on the job.GROWING BUSINESSESWhat if an accident happens at my job sitebefore my coverage is established?Employers who qualify for mandatory coverage as aresult of hiring their third worker must register withWorkSafeNB within 15 days of when the third workerstarts, and must provide specific information about theiroperations and an estimate of the assessable earnings forthe calendar year.Should a work-related accident occur before registration,WorkSafeNB might charge you the full cost of the accidentand make a retroactive assessment to the date coveragebecame mandatory. Depending upon the severity of theinjury, this could be extremely costly for you.CONTRACTORS FROM ANOTHERJURISDICTIONIf you are a contractor from another jurisdiction, whoemploys three or more workers, and the job you havebeen hired to complete will exceed one week, youmust register with WorkSafeNB for coverage usingthe Application for WorkSafeNB Coverage form. If thesecircumstances do not apply to your situation, you are notrequired to register for coverage.12Can I open an account in anticipation ofbusiness and staffing increases?

Registering cont’d NEW EMPLOYERS WHO QUALIFY FOR MANDATORY COVERAGEMUST REGISTER WITH WORKSAFENB WITHIN 15 DAYS OF THE FIRSTDAY OF OPERATION.What information do I need to provide to openan account?To open an account for workers’ compensation coveragewith WorkSafeNB, you must complete an Application forWorkSafeNB Coverage form.The application form will ask you for an estimate of yourassessable earnings for the calendar year. If the businessstarts operating that year, the estimate only beginswith the first day of operation. If three workers will notbe working between January 1 and December 31, theestimate should only include the time that three workerswill be working. In the case of voluntary coverage, theestimate begins when you apply for coverage. Thisapplication can be downloaded and printed online.It will also ask you to provide a description of yourbusiness. It is extremely important to be as detailed aspossible, because this information is used to determinethe assessment rate code for your business.What information will I receive fromWorkSafeNB?When WorkSafeNB receives your new application forregistration, an employer number will be assigned toyour business. This number identifies you, and should beprovided on all future correspondence and payments sentto WorkSafeNB.FACTORS AFFECTING YOUR ACCOUNTThere are a variety of business circumstances that willaffect your WorkSafeNB coverage. If your businessexperiences any of the following scenarios, please contactWorkSafeNB immediately.What if my company changes its structure?If your company changes its structure (for example,incorporates), it may be considered a new employer forWorkSafeNB

Who pays for workers' compensation? New Brunswick's participating employers pay for workers' compensation. Registered employers are grouped according to industry and associated risk, and are assessed a premium based on their rate group and yearly payrolls. Employers cannot collect compensation contributions from workers.