Workers’ Compensation – Key Vocabulary

A comprehensive set of vocabulary flashcards summarizing foundational terms, classifications, premium concepts, coverage rules, and benefit calculations within Canadian workers’ compensation legislation.

Workers’ Compensation

Provincial/territorial, employer-funded insurance program that provides wage-loss and medical benefits to workers injured or made ill by work.

Meredith Principles

Five founding principles (collective liability, no-fault, security of payments, independent administration, exclusive jurisdiction) that underpin Canadian workers’ compensation laws.

Collective Liability

All covered employers in an industry share responsibility for funding compensation costs through pooled premiums.

No-Fault System

Benefit payments are made to injured workers regardless of who caused the workplace accident or illness.

Security of Payments

Guarantees that injured workers receive benefits based on loss of earnings even if the employer is insolvent.

Independent Administration

Workers’ compensation boards operate at arm’s length from governments and special-interest groups.

Exclusive Jurisdiction

The workers’ compensation board has final authority to adjudicate all workplace injury claims.

Workers’ Compensation Board (WCB) / Commission

The provincial or territorial body that administers workers’ compensation legislation, collects premiums, and pays benefits.

Workplace Safety and Insurance Board (WSIB)

Ontario’s workers’ compensation authority responsible for registration, premium collection, and benefit payments.

Regular Employer

Private-sector employer that pays periodic premiums into the general accident fund; represents about 99 % of covered employers.

Self-Insured Employer

Employer (e.g., railways, crown corporations) that reimburses the board for actual claim costs plus admin fees instead of paying premiums.

General Accident Fund

The pooled fund into which regular employers’ premiums are deposited and from which worker benefits are paid.

Premium Assessment

Amount a regular employer must pay, calculated on assessable payroll and industry classification rate per $100 of earnings.

Assessable Earnings

Types of remuneration on which workers’ compensation premiums are based (e.g., salary, overtime, bonuses) up to a set annual maximum per employee.

Maximum Assessable Earnings

Jurisdiction-specific annual ceiling on each employee’s earnings that are subject to workers’ compensation premiums.

Total Annual Assessable Payroll

Sum of all employees’ assessable earnings (each capped at the jurisdictional maximum) used to calculate an employer’s premiums.

Industry Classification

Category assigned to an employer based on business activity (e.g., construction, manufacturing) that determines the basic premium rate.

Separate Industry Classification

Option for multi-operation employers to have distinct premium rates if each operation meets criteria such as separate revenue and payroll.

Experience Rating Program

System that adjusts an employer’s premium rate up or down (5 %–50 %) based on its claim history relative to others in the same industry.

Premium Reduction (Discount)

Lower premium rate granted when an employer’s injury costs are below the industry average under experience rating.

Premium Surcharge

Additional percentage added to premiums when an employer’s claims costs exceed the industry average.

Personal / Optional Coverage

Voluntary workers’ compensation insurance that owners, partners, executives, and certain other exempt individuals can purchase for themselves.

Independent Contractor (Independent Operator)

Person who carries on business without employees; must open their own workers’ compensation account and cannot buy personal coverage (except mandatory in Ontario construction).

Clearance Certificate

Document issued by a workers’ compensation board confirming a contractor’s account is in good standing, protecting the client from liability for unpaid premiums.

Exempt Employee Classes

Groups such as sole proprietors, partners without wages, executive officers, and independent contractors who are not automatically covered by workers’ compensation.

Excluded Profession

Occupation that provincial legislation specifically removes from mandatory coverage (e.g., private daycare workers in Ontario).

Employee Eligibility

Most full-time, part-time, casual, seasonal, student, and domestic workers are automatically covered if an employer is registered.

When Coverage Is In Force

Coverage applies while employees perform work duties, business travel, or travel between job sites; excludes commuting to regular workplace and leave periods.

Non-Compliance Penalties

Fines or interest charged for late filings, late remittances, or under-estimating assessable payroll beyond a set tolerance.

Workers’ Compensation Award

Periodic benefit paid to an injured worker, calculated on gross or net average earnings depending on jurisdiction.

Net Average Earnings

Employee earnings after statutory deductions (CPP/QPP, EI, QPIP, taxes) used by many boards to compute wage-loss benefits.

Job Protection

Legislated right in some jurisdictions for an injured employee to return to their position (or an equivalent) after compensation leave.

Advance on Workers’ Compensation

Employer-paid temporary payment (e.g., two weeks’ worth) given to an injured worker and later reimbursed by the board or repaid by the employee if the claim is denied.

Collective Liability Program

Funding model where all regular employers in the same industry pool resources to cover claims costs, spreading risk.

Maximum Premium Rate

Highest rate per $100 of assessable payroll assigned within a jurisdiction, often found in high-risk industries like steep-slope roofing.

Sole Proprietor

Unincorporated business owner with no separate legal entity; exempt from automatic workers’ compensation but may apply for optional coverage.

Partner (in Partnership)

Co-owner of an unincorporated business who, if not drawing wages, is exempt from mandatory coverage unless optional coverage is purchased.

Executive Officer

Corporate official (e.g., president, vice-president) typically excluded from mandatory workers’ compensation unless optional coverage is obtained or, in Ontario construction, coverage is compulsory.

Clearance Letter

Alternate term for clearance certificate confirming that a subcontractor’s workers’ compensation account is current.

Underestimating Assessable Earnings

Reporting payroll below actual amounts; may trigger penalties and retroactive premium charges.

Work-Related Bonus

Performance-based payment included in assessable earnings for premium calculation purposes.

Shift Premium

Additional pay for working undesirable hours; considered assessable earnings for workers’ compensation.