Failing to register your business with WorkSafeNB when legally required can lead to devastating consequences. You can face administrative penalties, retroactive premium charges covering your entire unregistered period, and severe fines under the Occupational Health and Safety (OHS) Act reaching up to $250,000 CAD.
Starting a new business in New Brunswick requires managing a long list of legal obligations. For many small business owners in Moncton, Fredericton, or Dieppe, registering for workers’ compensation is sometimes accidentally overlooked. However, failing to secure coverage with WorkSafeNB is not merely an administrative error; it is a serious violation of provincial law.
WorkSafeNB relies on a collective liability system, meaning all qualifying employers must pay their fair share to fund the safety net. 💼 Operating “under the table” or ignoring registration requirements exposes your company to enormous financial risks. If an unregistered employee suffers a severe workplace injury, your business can be held entirely responsible for their medical bills and lost wages. If you are facing an audit or penalties, speaking with a skilled corporate lawyer immediately is highly recommended to mitigate the damages.
Step-by-Step Process in New Brunswick
WorkSafeNB actively investigates unregistered businesses using data matching with the Canada Revenue Agency (CRA) and Service New Brunswick. Here is what typically happens when an employer is caught operating without mandatory coverage.
Step 1: The Initial Audit and Investigation
An investigation usually triggers if a worker gets injured on your site, if a competitor reports you, or during a routine data cross-check. WorkSafeNB compliance officers will contact you to demand your payroll records, T4 summaries, and employee contracts. 📋 Refusing to cooperate with an audit is an additional offence that escalates the situation drastically.
Step 2: Retroactive Assessment of Premiums
If WorkSafeNB determines you should have been registered, they will calculate your assessable payroll for the entire time you were operating illegally. You will receive a retroactive assessment bill. You must pay all the back premiums you should have paid, often stretching back several years, which can easily amount to tens of thousands of dollars.
Step 3: Application of Administrative Penalties
In addition to the back premiums, WorkSafeNB will levy administrative penalties. These are direct financial fines for failing to register, failing to report payroll, or paying late. 💰 These penalties are calculated as a percentage of your unpaid assessments and accrue interest rapidly until the balance is completely settled.
Step 4: Total Liability for Injury Costs
If the investigation was sparked by a workplace injury, this is where the costs become business-ending. An unregistered employer can be held legally liable for the total cost of the worker’s compensation claim. This includes lifetime disability pensions, rehabilitation, and medical equipment, which can reach hundreds of thousands of dollars.
Step 5: OHS Prosecution (Worst Case Scenario)
If the failure to register is accompanied by gross negligence regarding workplace safety, provincial prosecutors may lay formal charges under the Occupational Health and Safety Act. 👮 These are quasi-criminal charges heard in provincial court, and a conviction carries massive statutory fines and potential jail time for company directors.
How Much Does it Cost in New Brunswick?
The financial penalties for operating without WorkSafeNB coverage compound quickly. It is always cheaper to register legally than to face the penalties of being caught.
| Type of Penalty / Fine | Estimated Cost (CAD) |
|---|---|
| Retroactive Premiums | 100% of unpaid premiums for past years |
| Administrative Late Registration Penalty | Often 5% to 15% of the assessed premium |
| Full Cost of an Injury Claim | $5,000 to $500,000+ (Varies wildly) |
| OHS Act Conviction (Corporate Fine) | Up to $250,000 per offence |
Furthermore, company directors can be held personally liable for unpaid WorkSafeNB assessments, meaning your personal bank accounts and home could be at risk. 🔒
How Long Does the Process Take?
Once an investigation begins, an audit of your business records can take anywhere from 1 to 3 months. After WorkSafeNB issues the retroactive assessments and penalties, you generally have only 30 days to pay the balance or formally file an appeal to the Appeals Tribunal. If OHS charges are laid, the court process can drag on for over a year.
Frequently Asked Questions (FAQ)
What if I genuinely didn’t know I had to register?
Ignorance of the law is not a valid legal defence in New Brunswick. While WorkSafeNB might be lenient on administrative penalties if you come forward voluntarily, you will still owe all retroactive premiums.
Can an injured worker sue me directly if I am unregistered?
Generally, WorkSafeNB will still step in to compensate the injured worker, but the board will then turn around and legally pursue your company for the total cost of the claim. You lose the traditional protection from lawsuits that registered employers enjoy.
How many employees trigger mandatory registration?
In New Brunswick, the general rule is that you must register if you employ three or more workers at any given time. However, some specific industries, like certain construction sectors, may have different requirements.
Will WorkSafeNB shut down my business?
WorkSafeNB has the authority to issue Stop Work Orders if conditions are unsafe, but they do not typically dissolve corporations. However, the sheer weight of the financial penalties and seized assets often forces unregistered businesses into bankruptcy.
Can a lawyer negotiate my penalties down?
A lawyer cannot change the statutory laws, but they can aggressively audit the board’s math, argue that certain contractors were incorrectly classified as employees, and negotiate a manageable payment plan for the arrears.
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