Area of Law: Workers' Compensation
Answer # 644
Benefits and costs of workplace safety and insuranceRegion: Ontario Answer # 644
Registering with the WSIB
Most employers in Ontario have an obligation to register for Workplace Safety and Insurance coverage with the Workplace Safety and Insurance Board (WSIB) within 10 days of hiring their first employee. Even if an employer contracts out work, they may be responsible for Workplace Safety and Insurance premiums for contractors, sub-contractors and their employees, if the contractor or subcontractor defaults in their premium payments to the Board. Employers can register their business online at the WSIB.
Mandatory registration for construction industry
For anyone who is an independent operator, sole proprietor, partner or executive officer and works or carries on a business in construction, Workplace Safety and Insurance coverage is required by law and registration is mandatory. The legislation does not apply, however, to people who work as employees of construction-related firms.
Employers who do not pay premiums
Not every employer is required to be registered with the WSIB. Each province and territory sets the criteria for employers exempted from premiums or registering with their Workers’ Compensation Board or Commission. Most public sector employers engaged in inter-provincial transportation and communication do not pay premiums and, instead, are directly responsible for all the costs of an injured worker’s claim plus the payment of an administration fee to the WSIB. These employers include governments, Crown corporations, telephone companies and railways.
Benefits of paying employer premiums
Private sector employers are obligated to pay Workplace Safety and Insurance premiums to insure employees for work-related injuries and disease. Most public sector employees, including the provincial and municipal governments, do not pay premiums but pay benefits under the legislation directly to employees. Public and private sector employers, covered by the Workplace Safety and Insurance Act, cannot be sued for work-related injury or disease.
Costs of paying employer premiums
The costs for most employers are the premiums set each year by the Workplace Safety and Insurance Board.
2020 Changes to WSIB Experience Rating programs and premiums / NEW Premium Rating and Payment Process
As of January 1, 2020, WSIB has changed the way premium rates are set to reflect an individuals claims experience and risk.
Previously the WSIB used three experience rating programs. Which program was used was based on the type of employer and the amount of premiums paid. Under these programs, an employer’s premiums could increase or decrease, depending on the number of accident claims, the cost of claims, or both.
The previous programs were:
1. MAP Program: Premiums less than $25,000: For all employers, non-construction and construction, which are smaller in size, and whose WSIB premiums are between $1,000 and $25,000 per year, the WSIB used the Merit Adjusted Premium experience rating program, or MAP.
2. NEER Program: Non-construction employers, premiums over $25,000: For private sector employers and some public sector employers that pay annual premiums over $25,000, the WSIB reviewed the frequency and cost of claims under a system called the New Experimental Experience Rating program (NEER).
3. CAD-7 Program: Construction employers, premiums over $25,000: CAD-7 (Council Amendment to Draft #7) was used for construction employers that had annual premiums over $25,000.
New premium rate-setting system:
The new premium rating system is a prospective rate-setting approach instead of a retrospective rate-setting approach, meaning that an individual claims experience will be factored in when premium rates are set. The new two step process involves:
- setting an average rate for each industry class based on their risk profile and share of responsibility to maintain the insurance fund, and
- studying how an individual claim history compares to the rest of the businesses in their class.
For 2020 and forward, WSIB will use the North American Industry Classification System (NAICS), to categorize businesses, scaling down from approximately 200 rate groups to 34 classes/subclasses. Visit wsib.ca for more information on the new premium and payment system.
Final statements, rebates/surcharges and adjustments to previous experience rating programs:
- Final statement issued: December 2018
- Final rebate: 2019 premium year
- Final surcharge: 2019 premium year
- Final statement issued: November 2020
- Final rebate: January 2021
- Final surcharge: December 31, 2020
- Final statement issued: September 2020
- Final rebate: November 2020
- Final surcharge: October 31, 2020
Visit wsib.ca for more information on transitioning from the previous experience rating programs to the new premium rating system.
For more information about the benefits or costs to employers, or if you need to register you can contact a lawyer, call the Workplace Safety and Insurance Board, or visit the WSIB website.
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