Wednesday
Dec232015

New rate framework on the way...have your say on WSIB

The impact of the Workplace Safety and Insurance Board (WSIB) rates has been an issue on the minds of many members of the Peterborough Chamber of Commerce this past year.  We heard concerns on rates, rate increases and concern around communication of the rates.  As such, the Peterborough Chamber was part of an Ontario Chamber of Commerce (OCC) task force developing recommendations for presentation to the WSIB.  

In September, the Chamber Network submission was presented as part of the stakeholder consultation process. In all, the Chamber Network provided the Government of Ontario with ten recommendations, seven of which dealt directly with the proposed changes to the rate framework.  Of those seven, six were incorporated in the new WSIB Rate Framework document released earlier this month.  

The OCC has provided us with an update on the seven rate framework recommendations (these are the Top 5):

Recommendation 1: Provide a public and detailed analysis of how the proposed rate framework changes will impact employers. The WSIB has committed to conducting a risk disparity analysis that will form part of the regular, ongoing monitoring of the Rate Framework. Emphasizing the key goal of ‘fairly allocated premiums’, the WSIB indicated that the analysis could lead to updates to the class structure designed to better distribute the costs by industry.

Recommendation 2: Introduce a surcharge mechanism to ensure that employers with effective health and safety programs don’t pay the cost of poor performing employers within their class. In our submission, the OCC noted that the elimination of the surcharge mechanism in the proposed framework would become problematic when an employer’s costs far exceed the rate charged to the highest risk band in their class.  The WSIB has responded with a commitment to implement a program similar to the Alberta Poor Performance Surcharge (PPS) to encourage high cost employers to improve their health and safety management efforts.

Recommendation 3: Expand the proposed class structure. The WSIB originally proposed to reduce the number of employer classes from 155 to 22. Members of the business community expressed concern that the proposed class structure risks grouping employers with very different risk profiles – which could impose undue costs on businesses. The WSIB has responded by increasing the number of classes in the proposed framework from 22 to 34. We will continue to work closely with the WSIB to ensure that businesses are fairly classified
according to their risk profile.

Recommendation 4: Reconsider implementing the predominant class model. The WSIB originally proposed to subject employers to a premium rate based solely on the business’ predominant activity. We view this as problematic as it could lead to significantly higher premium rates for employers engaged in multiple business activities. The WSIB has committed to ‘further exploring’ exceptions to this general rule to allow employers to pay multiple premium rates that are reflective of their business activities. The OCC will work closely with the WSIB to ensure fairness for employers engaged in multiple business activities.

Recommendation 5: Implement a weighted cost claims ‘window’. The OCC recommended that the WSIB implement a weighted cost claims ‘window’ based on employers’ claims cost history over the past three rather than six years to ensure that the rate charged to employers is reflective of their recent commitments
to health and safety. Although the WSIB plans to move ahead with the six years claims window, the OCC is encouraged by the updated weighted feature in which the most recent three years are weighted at 66.6 percent and the remaining three years at 33.3 percent, a significant improvement from the model that had been previously proposed.

These three recommendations:

 

  • The WSIB should be subject to oversight by the Auditor General.
  • The Government of Ontario should study the merits of introducing comparable WSIB delivery models including options such as full and/or partial privatization.
  • The Government of Ontario should amend the Workplace Safety and Insurance Act to exempt construction employers who have obtained comprehensive 24/7 insurance coverage from coverage under the WSIB scheme.

 

did not deal directly with the rate framework, but are still very much part of the lobbying effort by the Ontario Chamber Network as they are important to creating a more competitive business climate for Ontario.  

The Peterborough Chamber will be hosting the WSIB Secretariat’s Executive Director of Strategic
Revenue Policy on Wednesday, January 6, 2016 from 8:30-11:00am at the Kawartha Shrine Club.  The event is in conjunction with the Kawartha Manufacturers’ Association and the Peterborough & the Kawarthas Home Builders Association.  

Comment through the "Peterborough Chamber" group of LinkedIn. 

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