WSIB’s New Rate Framework: Are You Ready?

As an employer, you should have received within the past month or so a letter from the Workplace Safety and Insurance Board (WSIB) providing you with a detailed breakdown of WSIB’s new rate framework and your new classification information. Since the new rate framework will come into effect on January 1, 2020, employers need to understand what it means for their business.

The new framework is meant to be easier to administer as it will use the North American Industry Classification System (NAICS) which is already being used by Canada Revenue Agency and Statistics Canada for classifying all Canadian employers.

How will WSIB premiums be determined under the new framework?

The new framework will use a two-step process to determine the rates that employers will pay on their WSIB premiums.

Risk Band Rate

The first step is called the risk band rate. This is the average rate for all employers in any given industry and the rate is determined by the claim experience of all employers within that industry.

Predictability

In the second step called predictability, the individual experience – covering the previous six years – of the specific employer is taken into account and it is compared with the rest of the class. If the individual experience of the employer is better (has fewer claims) than the experience of the class, that employer will receive a lower than average premium for that industry. Conversely, employers with a higher than average amount of claims will have to pay a higher than average premium for their industry class.

Special Rules

In addition to being easier to administer, the new framework helps to protect employers from dramatic changes to their premiums in any given year. During the first three years of the framework, there will be special rules governing changes to premiums. These rules are as follows:

2020

Employers will move downward directly to their projected risk band. During the first year, companies will not move up risk bands.

2021

Employers may move an unlimited number of risk bands downward or a maximum of one risk band upward (representing a 5% premium increase).

2022

Employers may move an unlimited number of risk bands downward or a maximum of two risk bands upward (representing a 10% premium increase).

Occupational Disease (OD) claims

Under the new WSIB rate framework, Occupation Disease (OD) claims will be factored into the risk band rate for the industry but not into the rate-setting for the individual business.

How can employers find out their predictability under the new framework?

Employers can now contact WSIB in order to receive a copy of their extended detailed premium rate statement. This statement will let them know what their predictability level is as well as provide them with a breakdown as to how their rate was calculated.

Is your business ready?

The new WSIB framework provides employers with an opportunity to reduce their premiums by introducing safety protocols and return to work programs that help them to outperform their peers. If you would like to learn more about how WSIB’s new rate framework will affect your business, and discover ways to reduce your premiums, contact TeksMed today.

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