What is COIDA?
COIDA is the law that provides compensation to employees who are injured, disabled or fall ill because of their work, and to the families of employees who die from work injuries. Employers fund it through the Compensation Fund. In return, an employee covered by COIDA generally claims from the Fund rather than suing the employer.
Who must register for COIDA?
Any employer with one or more employees, full-time, part-time or casual, must register. This includes domestic employers. Sole owners with no employees do not register as employers, but they cannot get a letter of good standing either, and some clients will ask for one once you have staff.
How do I register for COIDA?
Registration is done online with the Compensation Fund. You need:
- Company registration documents (COR 14.3) or the owner's ID for a sole proprietor
- Directors' ID copies
- Business address and contact details
- Number of employees and estimated annual payroll
- A description of the business activity (it sets your industry class and rate)
- Bank details and, often, a letter confirming the account
After registration you receive an employer registration number.
How much does COIDA cost?
You pay an annual assessment: a percentage of your total payroll, at a rate that depends on how risky your industry is. Construction, security and cleaning usually have higher rates than office-based work. The Fund issues the assessment after you submit your return of earnings.
What is the return of earnings?
The return of earnings (ROE) is the yearly declaration of what you paid your employees. You submit it once a year, usually by the end of May, and the Fund uses it to calculate your assessment. Late or missing returns lead to penalties and stop you getting a letter of good standing.
What is a letter of good standing and why do I need it?
A letter of good standing confirms you are registered with the Compensation Fund and up to date with returns and payments. Clients and government buyers ask for it before you work on their sites, because it shows your workers are covered. It is a standard document in cleaning, construction, security, maintenance and tender submissions.
What are the common mistakes?
- Only registering when a client asks for the letter, instead of when you employ your first worker
- Declaring the wrong industry, which leads to the wrong rate
- Missing the yearly return of earnings
- Not reporting injuries on duty to the Fund within the required time
Step by step
- Prepare documents. Gather company registration, director IDs, payroll estimate and bank details.
- Register with the Compensation Fund. Complete the online employer registration and describe your business activity accurately.
- Receive your registration number. Keep the employer registration number for returns and correspondence.
- Submit the return of earnings yearly. Declare what you paid employees, usually by the end of May.
- Pay the assessment. Pay the amount the Fund calculates from your payroll and industry rate.
- Request a letter of good standing. Request the letter once you are up to date, and renew it before it expires.