Canadian Payroll Reporter

3 Canadian HR Reporter, a Thomson Reuters business 2017 Big changes coming to WSIB premiums As of 2020, Ontario's board will have implemented new rate-setting structure BY SHEILA BRAWN BIG CHANGES are coming to the way the Ontario Workplace Safety and Insurance Board (WSIB) classifies Schedule 1 em- ployers and sets and adjusts their premium rates. Beginning in 2020, the board will implement what it calls an innovative new framework that will make the rate-setting pro- cess more transparent and better align employer premium rates with the actual costs of the work- ers' compensation system. The changes will make the system easier for employers to understand, according to Sean Baird, vice-president of employ- er services at the WSIB. "The new system will allow us to provide rates that more ac- curately reflect a business's own risks and experience," he said. "We've been working with busi- nesses for a long time to develop this model that boosts fairness and transparency." The board began consultations on the new framework over two years ago. At the time, it proposed implementing the framework in 2019; however, it later pushed the date back to 2020 to give employ- ers more time to adjust. "We understand that chang- ing the way we calculate pre- mium rates for businesses across Ontario cannot happen over- night. An implementation date of Jan. 1, 2020 will allow for a smooth transition and ensure businesses have time to prepare for the changes they will see un- der the new system," said Baird. The new framework will not apply to Schedule 2 employers, who are individually liable for the costs of benefits for their em- ployees who suffer work-related illnesses or injuries. It will replace the current system that the WSIB uses for classifying employers with one based on a North American Industry Classification System (NAICS), which was developed by statistical agencies in North America, is simpler to use and easier to understand since it groups businesses based on type of economic activity and is updated more frequently than the current system. The Canada Revenue Agency and Statistics Canada both use it. Instead of grouping employ- ers into one of 840 classification units and 155 rate groups, as it currently does, the WSIB will classify employers into 34 class- es/subclasses adapted from NA- ICS. The board will assign em- ployers to a predominant class based on their largest percent- age of WSIB insurable earnings. The board will then use a two- step process to determine each employer's premium rate for the year. First, it will set a projected premium rate for each class/sub- class based on their collective re- sponsibility for new injury and illness claims, past claims costs (including unfunded liability costs), and administrative costs. Next, it will set what it calls a "risk adjusted" premium rate, based partially on the employ- er's own claims experience and insurable earnings when com- pared to that of their class. Once the new framework is in place, each year the WSIB will send employers registered with the board a projected premium rate and an actual premium rate for the coming year. see EXTENSIVE page 8 News CPR | November 2017

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