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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