Canadian Payroll Reporter

November 2017

Focuses on issues of importance to payroll professionals across Canada. It contains news, case studies, profiles and tracks payroll-related legislation to help employers comply with all the rules and regulations governing their organizations.

Issue link: https://digital.hrreporter.com/i/886446

Contents of this Issue

Navigation

Page 7 of 7

November 2017 | CPR Published 12 times a year by Thomson Reuters Canada Ltd. Subscription rate: $179 per year Customer Service Tel: (416) 609-3800 (Toronto) (800) 387-5164 (outside Toronto) Fax: (416) 298-5106 E-mail: customersupport.legaltaxcanada @tr.com Website: www.carswell.com One Corporate Plaza 2075 Kennedy Road Toronto, Ontario, Canada M1T 3V4 Director, Media Solutions, Canada Karen Lorimer Publisher/Editor-in-Chief Todd Humber Editor Sheila Brawn sbrawn@rogers.com Editor/Supervisor Sarah Dobson News Editor Marcel Vander Wier Sales Manager Paul Burton paul.burton@thomsonreuters.com (416) 649-9928 Marketing Manager Robert Symes rob.symes@thomsonreuters.com (416) 649-9551 Circulation Co-ordinator Keith Fulford keith.fulford@thomsonreuters.com (416) 649-9585 Payroll Reporter Can R Can R adian adian a www.payroll-reporter.com ©2017 Thomson Reuters Canada Ltd ISBN/ISSN: 978-0-7798-2810-4 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, photocopying, recording or otherwise without the written permission of the publisher (Thomson Reuters, Media Solutions, Canada). Return Mail Registration # 1522825 | Return Postage Guaranteed Paid News Revenue Toronto Canadian Payroll Reporter is part of the Canadian HR Reporter group of publications: • Canadian HR Reporter — www.hrreporter.com • Canadian Occupational Safety magazine — www.cos-mag.com • Canadian Payroll Reporter — www.payroll-reporter.com • Canadian Employment Law Today — www.employmentlawtoday.com • Canadian Labour Reporter — www.labour-reporter.com See carswell.com for information Extensive education campaign underway The projected rate will show how much an employer should pay in premiums to fund both its share of claims costs and the col- lective cost for its class; however, the rate is not necessarily what the employer will have to pay in the following year. To set the actual premium rate that an employer will pay, the WSIB will take into account fac- tors related to the employer's risk band (employers in each class are further placed in hierarchical di- visions that represent a different level of accident risk compared to the risk profile of their class), its premium rate in previous years and the collective costs of the class in which it is placed. "Projected premium rates will provide you with the future direction (up or down) of your insurance premium rates. Pro- jected rates will help businesses prepare and adjust for future rate changes," said Baird. With the new framework, some employers will see rate in- creases, while others may have their rates go down. To help em- ployers prepare, Baird said the WSIB will gradually phase-in any changes. "Changes will also be capped so they are spread over time to allow businesses to adjust to any changes gradually. We expect the majority of employers to reach their projected rates with- in five years of implementation." Since the new framework will use an employer's own claims ex- perience to set its premium rate, the board will eliminate its expe- rience rating programs, such as New Experimental Rating Plan (NEER), Construction Industry Plan (CAD 7), and Merit Adjust- ment Program (MAP), once the framework is in place. Experience rating programs use what the board calls a "ret- rospective approach." Employ- ers in the same rate group have the same initial premium rate, but individual employers may receive premium rebates or sur- charges at a later date once the WSIB compares their expected claims costs to their actual costs. The new framework will use a prospective approach. "Experience-based adjust- ments will be incorporated into each employer's rate individually each year," said Baird, generally eliminating the need for rebates and surcharges. The board says one of the drawbacks of using a retrospec- tive approach is that there can be "significant changes from year to year that result in employers moving from a surcharge posi- tion to a refund position or vice- versa." With experience rating, it says some employers have a 150 to 200 per cent change in their premiums from year to year. Even without experience rat- ing, however, the WSIB will still have the authority to levy surcharges against employers who repeatedly have high claims costs. "The model will allow for surcharges in very limited cases where employers continue to exhibit very poor claims per- formance. In these cases, there would be a two-year period of education and health and safety engagement with affected busi- nesses before any surcharge is applied," Baird said. While the new framework will change the way the board sets premium rates, it will not affect the types of earnings that employers must include when calculating their gross annual payroll for paying workers' com- pensation premiums. Payments such as wages, salaries, bonuses, commissions and taxable ben- efits will still be included, and items such as top-ups of WSIB benefits and maternity benefits paid in addition to employment insurance benefits will still be excluded. Baird said the new frame- work would also not effect the way in which the WSIB sets its annual maximum for insurable earnings or its premium remit- ting procedures. "Maximum insurable earn- ings are set by a formula which takes into account the average industrial wage in Ontario as published by Statistics Canada. This will continue under the new model. Due dates and reporting processes will not change." To support the new rate framework, the WSIB is devel- oping new policies on topics such as workers' compensation coverage, the new classification structure, premium rate setting and adjustments, associated employers, temporary employ- ment agencies, and employer eligibility for single or multiple premium rates. Stakeholder feedback on the draft policies was due last month. The board says its goal is to publish the final policies at least one year before it imple- ments the new rate framework. The board has also begun an "extensive education campaign" to inform employers of the changes. "Every business registered with the WSIB will be receiving a letter with information about the rate framework, the new classification system and what their new classification will be in the new model, along with instructions on how to update or change the new classification online," said Baird. "This is the first step in mak- ing sure employers are informed and aware of what will be chang- ing in the rate framework. Our aim is to keep employers en- gaged with the WSIB as we transition into the new model. In 2018, we will begin provid- ing further information to help employers prepare for the rate framework, including what pre- mium rates will look like under the new model." from WSIB on page 3 Some employers will see rate increases, while others may see rates go down.

Articles in this issue

Links on this page

Archives of this issue

view archives of Canadian Payroll Reporter - November 2017