Reporting requirements

An employer may continue to pay an employee their regular wages or an advance or loan, before or after a claim is decided. There are two withholding and reporting policies for these types of payments. The one you choose will depend on the wording in the employee’s collective agreement or employment contract and how you manage the payments you make to your employee.

The two policies are:

• regular salary paid to an employee; and
• advances or loans paid to an employee.

Both policies apply to:

• self-insured employers who are directly liable for the cost of amounts that the workers' compensation board awards to employees; and
• regular employers who are not directly liable for the cost of amounts that the workers' compensation board awards to employees.

Regular salary paid to an employee

Approved claims

An employer may continue to pay an injured employee who is on a work-related leave of absence. If the employee’s agreement or contract does not refer to a workers’ compensation board, then the employer should treat the payments as regular salary. The employer would deduct CPP contributions, EI premiums and income tax as applicable. The earnings and deductions would be reported on the employee’s T4 slip at the end of the year in the usual way.

An employer who continues to pay an employee’s regular salary before and after a workers’ compensation board claim is decided cannot retroactively reduce earnings in the current year or amend a previous-year T4 slip and call the earnings workers’ compensation benefits. As a result, the employee has to report, in the year it is received, the salary he or she receives before and after a workers’ compensation board claim is decided.

Denied claims

Normally, salary is offset or repaid when a claim is approved by the workers’ compensation board. Report the amount reimbursed by WCB under code 77 on the employee’s T4 slip. However, if the claim is denied and your employee does not have to repay the salary to you, do not enter any amount under code 77. As long as the salary was reported on the employee’s T4 slip in the year they received it, there are no more withholding or reporting actions to make.

If, on the other hand, the employee has to repay the employer when the claim is denied, then any repayments should be handled in the way discussed under Employee did not perform duties.

Date modified:

2017-01-19