Collections Based on Financial Hardship

Policy

If an employer can demonstrate financial hardship, the WSIB may allow an employer to pay debts owed to the WSIB using a phased payment plan. The WSIB sets the terms and conditions of the plan.

Purpose

The purpose of this policy is to outline when and how the WSIB pursues collections based on financial hardship.

Guidelines

Definition

Employer — For the purpose of this policy, an employer is one who has carried on, or is carrying on, a Schedule 1 business activity covered mandatorily or by application. Employers also include those who are deemed to be employers under optional insurance or compulsory coverage in the construction industry. For additional information, see 12-01-01, Who is An Employer?.

Requesting a financial hardship determination

An employer requesting a financial hardship determination must make the request in writing, and include supporting documents, such as:

cash flow projections
credit reports
financial statements, and
other relevant material.

Financial risk analysis

To determine if an employer is experiencing financial hardship, the WSIB does a financial risk analysis of the employer. Using the information provided by the employer, the WSIB determines the risk of loss to the WSIB, and the employer's ability to pay.

In deciding whether to extend relief, the WSIB also considers:

the employer's payment history and past compliance with the WSIB
whether the employer is co-operative and willing to pay the debt, and
the length of time over which the employer is to pay the debt.

After doing a financial risk analysis, the WSIB may:

require immediate payment with no debt relief
offer to partially forgive the debt
offer a phased payment plan, or
suggest another course of action.

Phased payment plans

The WSIB structures phased payment plans to achieve optimal recovery of the debt as quickly as possible, given the employer's financial situation.

All plans are based on an agreement made by the employer (the owner, partner, or authorized executive officer of the employer), and a representative of the WSIB. The employer commits to a plan that the WSIB determines to be reasonable. The WSIB confirms the plan in writing.

Contents of a plan

A plan may include:

the employer's total debt, including all non-compliance interest and/or charges, experience rating surcharges, outstanding premiums including any premium adjustments, and other charges
the manner in which the employer is to make payments
how much the employer is to pay, and frequency of payment
security on the debt
the consequences of defaulting on the plan
notice that the WSIB has the right to perform ongoing reviews of the plan
notice that ongoing premiums are paid as they become due or as agreed within the plan, and/or
notice that any lump sum payments the employer presents in place of, or in addition to, the regular payments to the plan, may result in the plan's renegotiation.

Renegotiating a plan

The WSIB reserves the right to renegotiate the plan if an employer:

intends to dispose or is disposing of assets
becomes insolvent or is subject to bankruptcy proceedings
is subject to collection action by another creditor (e.g., a seizure of assets)
may not be able to pay according to the plan because of a worsening financial situation
experiences an improved financial situation
requests a Clearance Certificate (see 14-02-04, Clearance Certificate), and/or
requests a Purchase Certificate (see 14-02-03, Purchase Certificates).

Defaulting on a plan

If an employer defaults on a plan, the WSIB may require full payment of the debt immediately. If the amount is not paid, the WSIB may escalate collection action by, for example:

realizing any security held by the WSIB
filing a writ of seizure and sale, see 14-04-03, Writs of Seizure and Sale
executing an already filed writ of seizure and sale, and/or
holding the employer responsible for the full cost of any new claim(s) occurring from the first day the employer's account was overdue.

Suspending or waiving interest charges

In addition to addressing interest charges as part of a phased payment plan, the WSIB may suspend or waive interest charges at any time during collection proceedings.

Application date

This policy applies to all decisions made on or after August 1, 2020.

Document History

This document replaces 14-04-04 dated January 2, 2020.

This document was previously published as:
14-04-04 dated October 12, 2004
14-04-04 dated June 15, 1999