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Home > Lowe's for Pros > A Small Business Owner's Guide to Workers' Compensation

A Small Business Owner's Guide to Workers' Compensation

A Small Business Owner's Guide to Workers' Compensation

By Kelly Hagler

As a small business owner, protecting your business interests is your number one priority. But as an employer, the success of your business is determined by the health, safety and productivity of your work force.

According to Human Resources and Skills Development Canada (HRSDC)—a department of the Government of Canada responsible for developing, managing and delivering a range of social programs and services—compensation for occupational injuries and diseases is an employee right, not a privilege. Employers are responsible for protecting and enforcing this right by working with federal and provincial authorities to ensure that injury claims are processed quickly and properly.

Taking the necessary precautions to protect your employees from workplace injuries will help you avoid financial losses while protecting your business’s future.

The worker's compensation process

No matter how many steps you take to try to avoid them, job site accidents are going to happen. The HRSDC urges employers to report all injuries requiring medical attention or involving lost time within three days. After determining whether the employer is covered under the Government Employees’ Compensation Act, the Labour Board checks claims for accuracy and completeness, countersigns, and then forwards them to the appropriate provincial workers’ compensation authority. The compensation authority decides whether the disablement is the result of an occupational injury or disease and determines the benefits to be provided.

According to the HRSDC, there are four key points to remember when taking preventive measures or filing an injury claim:

  1. Be aware of your responsibilities as an employer before an accident happens.
  2. Prevention is always the best strategy. Being knowledgeable about workplace hazards and proper safety procedures reduces the risk of accidents and injuries.
  3. A disability management or return-to-work program can help you and your staff transition an injured employee back to work more quickly.
  4. If you are unhappy with a claim decision, you have the right to appeal through the appropriate provincial workers’ compensation board.

Impact on the small business owner

Steven McInnis, owner of Sandbar Construction, a commercial and residential construction company based in Calgary, Alta., says workers’ compensation protects his business by providing coverage if anything happens on a job site. It also makes it easier to secure new work.

"Workers’ comp has been helpful because potential clients are now asking [businesses] if they have coverage or liability insurance," he says. "By having [workers’ compensation] and other insurances, people will be more comfortable hiring you as their contractor."

Since employers work with individual provincial authorities when handling workers’ compensation claims, the Workers’ Compensation Board of Alberta (WCB) covers McInnis and his employees. For McInnis, WCB coverage benefits include:

  • Compensation for lost wages based on 90 percent of net earnings or income (up to a maximum level)
  • Immediate benefit entitlement
  • Possible lump sum payments for permanent impairment; if an accident results in a fatality, certain funeral expenses and survivor benefits are provided to eligible dependants

The financial side of workers’ compensation

McInnis says coverage is reasonably priced and well worth the cost. For most industries, workers’ compensation is also required by law.

"If an employee is not covered and has an injury from work, the company can be responsible for his or her wages and most likely will be investigated by the WCB," he says.

Both the business and the injured party could be in a lot of trouble if they are without coverage and something happens on a job site, says Vladimir Putilkin, CEO of Forus Development Inc., a design, general contracting and renovation management service in Toronto.

"If your [provincial authority] found out that an employee was not covered, you would lose a lot of money," he says. "Especially if it was something serious."

Though costs vary depending on the province and industry, McInnis says it’s important to know all the facts before you open a workers’ compensation account.

"Make sure you inquire about how much coverage you need," he says. "For an owner, you would most likely need maximum coverage."

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