Highlights of Noteworthy Decisions

Decision 2480 17
S. Martel
  • Earnings basis (room and board)
  • Assessment of employers (assessable payroll) (travel allowance)

The employer appealed a decision of the Appeals Resolution Officer finding that travel allowances paid by the employer to its workers were insurable earnings to be included in the calculation of the employer's premiums

The employer provided contract administration in respect of construction of roads and bridges. The employer paid travel allowances to its workers to attend the various work sites. The allowance is based on an estimate of the distance to be travelled from a worker's homes to the job location, as well as the length of the road or bridge and an approximation of the number of times the worker will travel it in a day.
Board Operational Policy Manual, Document No. 14-02-08, deals with the calculation of employer premiums. Appendix I to the policy is a non-exhaustive list of what is considered to be insurable earnings. It includes allowances for a car and travel that are reported as taxable benefits and therefore included in income. Appendix II is an exhaustive list of non-insurable earnings. It includes a number of items but none of them concerns travel allowances.
The Board appeared to take the position that if the employer simply reimbursed its workers pursuant to expense reports, the amount remitted would not be an allowance but, rather, a payment of expenses. Reimbursement of expenses are not earnings and therefore not insurable. However, in this case the employer approximated the likely expenses and paid a travel allowance based on the approximation.
In Decision No. 3422/00, the Tribunal found that fixed amounts for meals paid to a worker on a business trip were not earnings for the purposes of determining the earnings basis. While it was an allowance to defray the cost of meals while travelling, it was still considered as reimbursement for an expense. The Vice-Chair noted that Decision No. 3422/00 dealt with the determination of a worker's earnings basis and not insurable earnings for employer premiums. Insurable earnings are not always the same as average earnings. None the less, the Vice-Chair found that analysis in Decision No. 3422/00 to be helpful and applicable.
The travel allowance was paid to help defray costs relating to a worker's use of a personal vehicle for work purposes. In this way, the allowance was in the nature of an expense reimbursement rather than earnings.
Further, Appendix II of the Board policy is an exhaustive list of non-insurable earnings, and does not include travel allowances. Appendix I qualifies the types of travel allowances that are included in insurable earnings as allowances that are reported as taxable benefits and therefore included in income. In this case, the travel allowances were not reported as a taxable benefit. Therefore, it follows that travel allowances not reported as taxable benefits are not insurable earnings.
The Vice-Chair concluded that the travel allowances paid by the employer were not insurable earnings. The appeal was allowed.