The Appeals Commission for Alberta Workers’ Compensation has denied a worker’s appeal to increase his compensation rate by including earnings from his concurrent self-employment after he refused to provide documents and tax information it requested.
The decision upheld an earlier ruling by the Dispute Resolution and Decision Review Body (DRDRB) that found the worker’s self-employment income could not be added to his compensation rate.
Background and appeal
The worker sustained significant injuries on June 6, 2020, including a right shoulder dislocation, a complete full thickness tear of two tendons, a left shoulder sprain, and a left shin laceration.
The Workers’ Compensation Board (WCB) accepted his claim and set his compensation rate based on his earnings from his primary employer, which amounted to $58,316.65 annually.
The worker later revealed he also operated a self-employed welding business at the time of his accident and argued that his compensation rate should include his income from this business. He provided documentation showing gross income from his welding company for various years, including $114,443.53 in 2018 and $14,818.28 in 2019.
WCB’s request and worker’s response
The WCB requested additional documentation to verify the worker’s self-employment income, including a T4, a Personal T1 General, or a “Statement of Business Activities” for 2019.
The worker provided tax summaries for his company, showing total revenue and net income for several years, but did not provide the specific documentation requested by the WCB.
The WCB reiterated that to consider self-employment income, the worker needed to provide taxable income documentation. The worker, however, refused to refile his taxes or provide a T4 statement, citing concerns over potential increased tax liabilities.
Commission’s analysis and decision
The Appeals Commission thoroughly reviewed WCB policies and the evidence provided by the worker. The Commission emphasized that under WCB Policy 04-01, compensation for earnings loss is based on confirmed earnings that fairly represent a worker’s wage loss or impairment of earning capacity.
The policy requires documentation that allows the WCB to calculate net earnings using a standard formula, which includes taxable remuneration.
The worker’s refusal to provide the requested documentation prevented the WCB from verifying and including his self-employment income. The Commission also noted that WCB Policy 04-01 considers earnings for subcontractors to be contractual earnings minus business expenses, but the worker did not provide sufficient information on his business expenses.
The Commission found that the worker’s compensation rate, based solely on his earnings from his primary employment, fairly and justly represented his earnings at the time of the accident. They concluded that the worker’s refusal to provide necessary documentation and his concerns over tax liabilities were insufficient grounds to alter the compensation rate.
Key points and submissions
The worker’s representative argued that his self-employment income was substantial and its exclusion from the compensation rate caused financial hardship. The representative referred to a previous Appeals Commission decision (2018-0351), which found that corporate earnings could be considered in calculating a worker’s compensation rate.
However, the Commission distinguished the present case from the 2018 decision, noting differences in the evidence and circumstances.
The Commission highlighted that the worker’s refusal to refile his taxes or provide a T4 statement was a significant factor in their decision. They noted that the WCB had repeatedly asked for specific documentation to include the self-employment earnings, but the worker’s refusal to comply left them with no choice but to uphold the original compensation rate.
Conclusion
The Appeals Commission confirmed the DRDRB’s decision, ruling that the worker’s compensation rate should not be increased to reflect his concurrent self-employment earnings. The worker’s appeal was denied, and the compensation rate based on his primary employment earnings of $58,316.65 per year was upheld.
For more information, see Decision No.: 2024-0342, 2024 CanLII 69934 (AB WCAC).
