Document name

Establishing Initial Wage Base

Document number

PRO 35/2024

1. The Workers' Compensation Board (WCB) has approved policy guidelines regarding the establishment of a worker’s wage base.
2. The following procedure provides WCB staff with guidelines for establishing the initial wage base where the worker has a loss of earnings resulting from an injury.

1. WCB staff will calculate the worker’s average weekly earnings using their regular rate of pay at the commencement of earnings loss or their gross earnings as defined in POL 35/2024, Establishing Initial Wage Base, whichever is greater, during the 52-week period directly prior to their commencement of loss.
2. When the worker was employed by the injury employer for a period less than 52 weeks, WCB staff may use a period less than 52 weeks but greater than 13 weeks to calculate the worker’s average gross earnings.
3. When determining the number of weeks to be used in the average gross earnings calculation, WCB staff will include the number of weeks the worker was available for employment. Only unpaid sick leave, maternity or paternity leave, incarceration, full-time school attendance, or time off work due to a work injury (in receipt of benefits for a prior claim) can be considered periods unavailable for employment.
4. Wage loss benefits will be based on information supplied by the employer and or the worker. When the worker is employed by two or more employers at the commencement of loss of earnings, the worker’s gross earnings will be based on the combined regular gross earnings from those employers. The gross earnings used to calculate wage loss entitlement will not exceed the maximum amount payable (POL 26/2024, Maximum Wage Rates).
5. Employers are responsible for providing the WCB with the following information regarding a worker’s gross earnings to establish the wage base:
   1. Gross earnings paid for overtime, shift differentials, vacation pay and other taxable benefits (e.g., room and board allowance, yearend bonuses) that are paid in exchange for the worker’s services,
   2. Tips and gratuities reported to the Canada Revenue Agency,
   3. The gross earnings for up to 52 weeks prior to the commencement of earnings loss,
   4. Periods, during the 52 weeks prior to the commencement of earnings loss, the worker was unavailable for employment, if known by the employer, and
   5. The worker’s tax exemption status as typically confirmed through completion of the Canada Revenue Agency’s TD1 form.
6. WCB staff will use the following information to calculate the wage base for the worker:
   1. The regular rate of pay earned by the worker at the commencement of earnings loss,
   2. The average of the worker’s gross earnings prior to the commencement of earnings loss,
   3. The periods the worker was unavailable for employment, and
   4. The worker’s probable deductions for income tax, Canada Pension Plan premiums, and Employment Insurance premiums.
7. Where the worker has been granted personal coverage or is engaged under other employment arrangements (e.g., contractor, learner), Employer Services staff will verify what gross earnings have been reported and what coverage guidelines apply.

Net Earnings

8. Using the current Canada Revenue Agency guidelines, WCB staff will deduct probable contributions for income tax, Canada Pension Plan, and Employment Insurance premiums from the worker’s gross earnings to determine the net earnings. As per POL 03/2007, Calculation of Probable Compensation, probable deductions will be based upon the information that the worker has authorized the employer to deduct from their gross earnings for income tax purposes and which is available as of the commencement of the loss of earnings.

Calculation of Wage Loss Benefits

9. To calculate the worker’s wage loss benefits, WCB staff will multiply the net earnings calculated in Point 8 by 90 per cent for injuries sustained on or after September 1, 1985.
10. If the WCB determines that the initial wage base was calculated using incorrect information, WCB staff will recalculate and increase or decrease compensation benefits. Recalculations and adjustments will be made retroactively to the first earnings loss date.
11. Any overpayments resulting from a recalculation will be pursued by the WCB (POL 17/2016, Overpayment Recovery – Compensation).
12. Once an initial wage base has been established, the WCB will not recalculate and retroactively adjust benefits to include salary increases or promotions effective after the day of injury that change pre-injury earnings.