Do I Need Workers' Compensation Coverage for My Employees in Canada?

In most cases, yes. Every province and territory in Canada has a workers' compensation board, and most employers who hire workers have to register with the board where those workers work. In BC it's WorkSafeBC and in Ontario it's the WSIB, the Workplace Safety and Insurance Board. Everywhere else it's a board or commission with its own name and its own rules.

What workers' compensation is

Workers' compensation is insurance that employers pay for and that covers workers who are injured or made ill by their work. It pays for things like medical care and lost wages. In exchange, workers generally can't sue the employer over a covered injury.

It isn't the same as Employment Insurance (EI). EI is federal and covers job loss and certain leaves. Workers' compensation is provincial or territorial and covers workplace injury and illness. It also isn't the same as general liability insurance, which protects the business against claims from customers and other third parties.

Who runs it where you work

There are 12 boards and commissions across 13 provinces and territories, because one commission serves both the Northwest Territories and Nunavut.

The Association of Workers' Compensation Boards of Canada keeps a directory of every board with contact details. If you have workers in more than one province or territory, the boards have an agreement to help employers who work across jurisdictions, so contact the board where the work happens.

Who has to register

The rules vary by province and by industry. Some industries are exempt or optional, and each board sets its own details, so ask the board before your first hire. Timing differs too. In Ontario, for example, the WSIB requires most covered businesses to provide registration information within 10 calendar days after their first worker starts. Its formal policy allows the registration process to be completed by the end of the following month, but employers shouldn't wait to begin. You can register before you hire, but it isn't required. Other boards have their own deadlines.

What it costs

Employers pay premiums, and the amount is based on your payroll and on the risk rate for your industry. Rates differ by province and change over time, so a roofing business and an accounting practice with the same payroll pay very different amounts. Premiums are part of what an employee really costs you, which is covered in what an employer pays on top of wages.

What happens if you don't register

The WSIB says employers who don't meet its registration requirements can face interest, charges and prosecution. In general, boards can back-date premiums to the day you should have registered and add penalties and interest. Each board has its own rules, so confirm yours.

Mistakes new employers make

• Assuming the CRA payroll account covers it. The CRA account and the workers' compensation account are separate, and they go to different bodies. Setting up payroll is covered in do I need a payroll account to hire my first employee?
• Calling a worker a contractor to skip registration. A board decides who counts as a worker under its own rules, and its definition can differ from the CRA's.
• Leaving out part-time and casual workers. One part-time worker can be enough to trigger registration, and family members can count too.
• Waiting for a bill to arrive. Boards expect you to register on your own.
• Under-reporting payroll. Premiums are based on your reported payroll, so errors can lead to adjustments later.
• Missing the injury reporting rules. Each board sets its own, often with short deadlines.
• Forgetting about workers in another province. If an employee works in a different province or territory, a different board may apply.

The Guided plan's dashboard keeps your CRA deadlines and monthly close checklist in front of you, so payroll and premium costs are recorded when they happen. For questions about your own situation, ask Margot (bottom right of this page, free to try, no sign-up). She'll give you a plain answer, or tell you when it's one for your accountant or your board.

FAQ

Is workers' compensation the same as EI? No. EI is federal and pays benefits for job loss and certain leaves. Workers' compensation is provincial or territorial and covers workplace injury and illness.

Do I need coverage for myself as the owner? It depends on your province and business structure. Many boards treat owner coverage as optional or limited, so ask yours.

Do I need to register if I only use contractors? Possibly. The board decides who counts as a worker, so check how its rules apply to the people you use.

What if I have employees in more than one province? Contact the board where the work happens. The boards have an agreement for employers who work across jurisdictions, but the details depend on your situation.

Can I register before I hire? In Ontario, yes, though it isn't required. Other boards differ, so ask yours.

Check the rule where your employee works before the first hire.