Highlights of Noteworthy Decisions

Decision 1146 15
07/07/2015
S. Martel
  • Class of employer (scientific and technical services)
  • Class of employer (dual rates) (small employer)

The Board classified the employer in Rate Group 704 for testing, inspection and related services. The employer appealed, claiming that it should be classified in Rate Group 958-08 for offices of engineers. The Vice-Chair identified as an alternative Rate Group 958-09 for other scientific and technical services. The employer agreed with that alternative and submitted that it should be the appropriate rate group.

The employer conducted material testing. A part of the business activity included soil testing (known as geotechnical investigation) but the predominant activity involved concrete and asphalt testing. For the concrete and asphalt testing, the municipalities with which the employer contracted sent samples to the employer. The employer then tested those samples in its lab. For the geotechnical investigations, the employer subcontracted with a driller to obtain the soil samples.
The Board found that Rate Group 704 was appropriate because the employer's business activity involved on-site excavation and drilling as part of the contract, even though the drilling was subcontracted to third parties.
Board Operational Policy Manual, Document No. 14-01-04, on aggregated payroll, provides that, if an employer's operation involves more than one activity and the employer does not maintain segregated payroll, the Board classifies the employer in the rate group with the highest premium. However, the policy also states that a small employer is excepted from this rule and is instead classified in the rate group for the predominant business activity.
A small employer is defined as one with annual insurable earnings that are less than five times the maximum insurable earnings ceilings for the premium year in question. The authority for this policy derives from O. Reg. 175/98, s. 9. The maximum annual insurable earnings for the year in question (2011) was $79,500, so that an employer would be a small employer if its annual payroll upon which premiums are payable is no more than $398,000.
The Vice-Chair noted that geotechnical investigation which includes drilling is excluded from the 958 rate groups. However, the employer, which had insurable earnings ranging from about $145,000 to $370,000, was a small employer. The employer's predominant business activity involved lab testing with no drilling, so that it was excepted from the classification with the highest premium rate.
The best fit for the employer was Rate Group 958-09. The appeal was allowed.