Heavily-legislated area requires wealth of knowledge from payroll
Workers’ compensation is just one of the many heavily-legislated areas payroll professionals have to contend with on a regular basis.
The area has so many questions around it that the Canadian Payroll Association (CPA) holds seminars to run through the basics of it. At the association’s recent annual conference in Edmonton, the Workers’ Compensation Board (WCB) of Alberta presented about the basics of the workers’ compensation. The seminar drew many questions, said WCB spokeswoman Jennifer Dagsvik.
Payroll professionals wanted to know about coverage for subcontractors, reporting of insurable earnings and how to avoid underestimating premiums and having to pay penalties, she said.
Workers compensation is different in every jurisdiction, she said.
Assessable earnings vary from jurisdiction to jurisdiction. Each area sets its own premium rates and the reporting varies from province to province, depending on whether the jurisdiction requires annual or monthly remittances, said Dagsvik.
That’s what makes it a particularly difficult area for payroll professionals who have employees in multiple provinces.
Because workers' compensation is a legislated insurance for most industries in Canada, it’s important payroll professionals understand the requirements involved with assessing wages and paying the required premiums, said Tina Beauchamp, CPA payroll consultant.
Not knowing the requirements could have devastating consequences for a company.
“One of the impacts it can have on their company is, oftentimes when you’re doing business, a customer may require clearance certificates and if your account is not in good standing, you haven’t been paying your premiums, that will slow that up, which will have an impact on the whole organization,” she said.
It could also slow down an employee’s claim for benefits, she said.
Payroll professionals have to make sure they’re aware of what wages are assessable. In some areas this will include taxable benefits, said Beauchamp.
Premiums are another area which varies from jurisdiction to jurisdiction. When premiums are due and whether they are based on the actual payroll or an estimate that is reconciled on an annual basis are some of the factors to be considered, she said.
Estimates, which are calculated by the payroll department, have to be accurate. If there is a shortfall in the estimate, and the company has to pay the difference at the end of the year, it could mean the company could end up paying penalties or interest.
“So if anything happens in your business throughout the year, say you increase or decrease the amount of employees, you need to reassess those estimates,” she said. “If you know that certain things are going to happen in your business, that you’re going to grow or you’re going to have some shutdowns, that will impact the amount of that estimate."
When Beauchamp gets questions from payroll professionals about workers' compensation they are usually about whether certain earnings are assessable, she said.
Sometimes when a company creates a new payment for employees that is out of the ordinary, like a different kind of bonus, payroll professionals will call her to see if it's an assessable payment.
Many professionals process payroll for employees in many areas of the country, so they need to make sure they are up to date on the legislation in every province and territory they are processing for, she said.
“If you are multi-jurisdictional that’s when you want to make sure you understand for each jurisdiction in your payroll system, make sure you indicate which earning types are assessable in that jurisdiction,” she said.
The area has so many questions around it that the Canadian Payroll Association (CPA) holds seminars to run through the basics of it. At the association’s recent annual conference in Edmonton, the Workers’ Compensation Board (WCB) of Alberta presented about the basics of the workers’ compensation. The seminar drew many questions, said WCB spokeswoman Jennifer Dagsvik.
Payroll professionals wanted to know about coverage for subcontractors, reporting of insurable earnings and how to avoid underestimating premiums and having to pay penalties, she said.
Workers compensation is different in every jurisdiction, she said.
Assessable earnings vary from jurisdiction to jurisdiction. Each area sets its own premium rates and the reporting varies from province to province, depending on whether the jurisdiction requires annual or monthly remittances, said Dagsvik.
That’s what makes it a particularly difficult area for payroll professionals who have employees in multiple provinces.
Because workers' compensation is a legislated insurance for most industries in Canada, it’s important payroll professionals understand the requirements involved with assessing wages and paying the required premiums, said Tina Beauchamp, CPA payroll consultant.
Not knowing the requirements could have devastating consequences for a company.
“One of the impacts it can have on their company is, oftentimes when you’re doing business, a customer may require clearance certificates and if your account is not in good standing, you haven’t been paying your premiums, that will slow that up, which will have an impact on the whole organization,” she said.
It could also slow down an employee’s claim for benefits, she said.
Payroll professionals have to make sure they’re aware of what wages are assessable. In some areas this will include taxable benefits, said Beauchamp.
Premiums are another area which varies from jurisdiction to jurisdiction. When premiums are due and whether they are based on the actual payroll or an estimate that is reconciled on an annual basis are some of the factors to be considered, she said.
Estimates, which are calculated by the payroll department, have to be accurate. If there is a shortfall in the estimate, and the company has to pay the difference at the end of the year, it could mean the company could end up paying penalties or interest.
“So if anything happens in your business throughout the year, say you increase or decrease the amount of employees, you need to reassess those estimates,” she said. “If you know that certain things are going to happen in your business, that you’re going to grow or you’re going to have some shutdowns, that will impact the amount of that estimate."
When Beauchamp gets questions from payroll professionals about workers' compensation they are usually about whether certain earnings are assessable, she said.
Sometimes when a company creates a new payment for employees that is out of the ordinary, like a different kind of bonus, payroll professionals will call her to see if it's an assessable payment.
Many professionals process payroll for employees in many areas of the country, so they need to make sure they are up to date on the legislation in every province and territory they are processing for, she said.
“If you are multi-jurisdictional that’s when you want to make sure you understand for each jurisdiction in your payroll system, make sure you indicate which earning types are assessable in that jurisdiction,” she said.
