Under Ontario law, employers are legally obligated to pay an injured worker their full regular wages for the exact day the accident occurred. Because WSIB Loss of Earnings (LOE) benefits generally begin the day after the injury, many employers offer optional wage advances during the waiting period to support the worker, which the WSIB can later reimburse.
When a workplace accident happens, the immediate concern is always the physical health of the worker. However, once the worker is safely transported to a hospital in Hamilton, London, or Windsor, the next major stressor is financial. Workers immediately worry about missing their rent or mortgage payments, while employers panic about how payroll should be handled while waiting for the Workplace Safety and Insurance Board (WSIB) to approve the claim.
A major point of confusion in Ontario’s workers’ compensation system is the concept of the “waiting period.” 📅 Who pays for the day the worker spent in the emergency room? What happens during the weeks it takes the WSIB adjudicator to review the medical files? The Workplace Safety and Insurance Act (WSIA) clearly outlines the employer’s absolute obligation to pay for the day of the accident, as well as the rules surrounding employer wage advances. If human resources departments mishandle this payroll transition, they risk severe penalties. Consulting a local Ontario employment law firm or WSIB specialist ensures strict compliance.
Step-by-Step Process for Handling Wages During a WSIB Claim
Managing the transition from standard payroll to WSIB benefits requires precise documentation. Here is the legally compliant process employers and workers must follow regarding early wages.
Step 1: Pay 100% of Wages for the Day of Accident
This is a non-negotiable legal requirement in Ontario. If a worker clocks in at 9:00 AM, suffers an injury at 10:00 AM, and spends the rest of the day at the hospital, the employer must pay them for their full, regularly scheduled shift. You cannot deduct this time from their sick bank or force them to use vacation pay. The employer absorbs the entire cost of the accident day.
Step 2: Understand When WSIB LOE Begins
The WSIB does not pay for the day of the accident. 📈 Loss of Earnings (LOE) benefits officially begin on the first working day following the accident, provided the worker remains medically unable to perform their duties. WSIB LOE is generally calculated at 85% of the worker’s net average earnings. Because processing a claim takes time, there will naturally be a gap in the worker’s cash flow.
Step 3: Decide Whether to Offer a Wage Advance
While the WSIB adjudicates the claim (which can take weeks), the employer has a choice. You are not legally required to pay the worker while they wait for WSIB approval. However, many reputable companies in Ontario choose to provide a “wage advance.” This means the employer continues to pay the worker their regular salary as a gesture of goodwill so the worker’s family does not suffer financial hardship during the waiting period.
Step 4: Declare the Advance on Form 7
If the employer chooses to advance wages, it must be properly documented. 📄 When submitting the WSIB Form 7 (Employer’s Report of Injury/Disease), there is a specific section asking if you are paying the worker while they are off. You must check “Yes” and indicate that you are requesting reimbursement. If you fail to check this box, the WSIB will assume the advance was a free gift, and you will not get your money back.
Step 5: The WSIB Reimburses the Employer
Once the WSIB approves the claim, they will calculate the exact amount of LOE benefits owed for the waiting period. Because the employer already advanced the worker their wages, the WSIB will send the retroactive LOE payment directly to the employer as reimbursement. If the WSIB benefit is lower than the amount the employer generously advanced, the employer generally absorbs the difference or deducts it from future earnings based on company policy.
How Much Does it Cost in Ontario?
Understanding the financial flow during a WSIB claim helps both parties manage their expectations and avoid payroll disputes.
- Day of Accident Cost: 100% of the worker’s regular shift wages, paid entirely out of the employer’s pocket.
- WSIB LOE Rate: Generally 85% of the worker’s net average earnings (after standard tax deductions), funded by the WSIB.
- Reimbursement Risk: If an employer advances 100% of the worker’s gross salary, but the WSIB only reimburses at the 85% net rate, the employer effectively loses that 15% difference unless collective agreements stipulate otherwise.
- WSIB Filing Fees: $0 CAD. Submitting forms and claiming reimbursements involves no administrative fees.
| Day of the Accident | Employer (100% regular wages) |
| Days After Accident (Waiting) | Employer Advance (Optional) |
| Approved Claim Period | WSIB (85% net earnings) |
How Long Does the Process Take?
Cash flow timing is crucial for injured workers. ⏱️ The employer must pay the “day of accident” wages on the very next standard payroll run. The WSIB usually takes 2 to 4 weeks to adjudicate a straightforward physical injury claim. Once approved, the WSIB will either send the retroactive reimbursement to the employer (if advances were paid) or issue the first direct deposit to the worker within 7 to 10 days.
Frequently Asked Questions (FAQ)
Can an employer force me to use my sick days instead?
No. For the actual day of the accident, the employer must pay your regular wages, not use your banked sick time. However, for the days following the accident, some unionized workplaces allow workers to temporarily draw from their sick bank as an advance until WSIB kicks in.
What happens to the advance if the WSIB claim is denied?
If the employer advances wages and the WSIB later rules the injury was not work-related, the WSIB will not reimburse the employer. The employer will typically have to recover that advance from the worker’s future paycheques or deduct it from their accrued vacation pay.
Does the employer have to top up WSIB benefits?
By law, employers are not required to “top up” the 85% WSIB payment to reach 100% of your pre-injury salary. However, some generous employers or union Collective Bargaining Agreements (CBAs) in Ontario mandate a top-up as a special workplace perk.
Do I have to pay taxes on WSIB income?
WSIB benefits are generally non-taxable income in Canada. While you must report the WSIB T5007 slip on your annual tax return, it is deducted in a way that ensures you do not pay federal or provincial income tax on that specific money.
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