Big changes are coming to how the WSIB sets and reviews employer premium rates.
The WSIB has posted its draft policies outlining the proposed new Rate Framework. They are accepting feedback until Oct 13 – just email firstname.lastname@example.org with your comments. The WSIB is committed to having the final policies published at least a year before implementation in January 2020, so I expect we will see these finalized within the next year.
Looking through the policies, I noticed a few key points that will be of interest to our members. First is the proposed classification system. The WSIB had a goal to simplify how it was classifying companies. The new framework will sort firms into Classes and Subclasses based on their 6-digit NAICS code. There is a tool on the WSIB’s website to help you find out what your code is.
Manufacturing will be Class E, with 6 Subclasses.
|Appendix Class/Subclass||Description||NAICS Equivalent|
|Subclass 1||Food, textiles and related manufacturing||31|
|Subclass 2||Non-metallic, and mineral manufacturing||321-322-326-327|
|Subclass 3||Printing, petroleum, and chemical manufacturing||323-324-325|
|Subclass 4||Metal, transportation equipment, and furniture manufacturing||331-332-336-337|
|Subclass 5||Machinery, electrical, and miscellaneous manufacturing||333-335-339|
|Subclass 6||Computer and electronic manufacturing||334|
From there, the WSIB has proposed a new system of setting your premiums rates which will be based on your Class/Subclass’s risks as well as your own company’s performance. The premium rate will be based on a few things: insurable earnings, claim count and the associated claim costs for all accounts (open and closed) over the 6-year period before the year premium rates are set.
The Board is proposing a range of premiums which will correlate to Risk Bands. Your company will be given a Risk Profile which will place you somewhere on that range with a corresponding premium rate. For an employer’s individual Risk Profile, greater weight will be placed on the claims from the 3 most recent years. The proposed 6-year review window will stretch an employer’s financial responsibilities over an even longer period of time.
Annually the WSIB will review your Risk Profile and adjust it based on your claim activity. From that, you will know which Risk Band you sit in for your Class/Subclass and the associated premium rate which you can then use to plan your budget for the following year. This will stop the flow of cash through rebates and surcharges every fall, giving you a set premium rate based on your performance. The WSIB is proposing that companies will be able to move up or down on the Risk Bands up to a maximum of 3 Bands. This will limit wild swings in premiums year to year.
The new system will allow companies with good performance to realize lower premium rates.
Lastly, there is a draft policy specifically to address Temporary Employment Agencies. This policy is proposing that the Agencies will need to find out from their client employers what their classification is and then keep segregated payroll records for each client and pay premiums to the WSIB based on the hours the temporary employees worked at each site.
I suspect this won’t be a burden to our members, but it may result in higher costs for those temporary employees if the agencies are having to pay higher premiums.
Check out the WSIB’s website for additional information on the upcoming changes. We will also keep you posted as we hear more.