The WSIB has launched a consultation on one of its most ambitious, comprehensive and far-reaching initiatives in recent memory. It’s called the “Rate Framework Reform” initiative, and it proposes to change pretty much everything about how the Board assesses employer premiums, including classification and experience rating.
This undertaking flows out of several years of prior reviews including the Harry Arthurs Review, and the subsequent Doug Stanley Review. The Board has posted the consultation documents, executive summaries, and backgrounders on the review website: www.WsibRateFrameworkReform.com.
The following is a high-level overview of the changes being considered:
- The current classification model will be replaced by the North American Industry Classification System (NAICS).
- There will be 22 NAICS classes (this includes three construction and three manufacturing classes).
- Multiple rate groups will not be allowed, except for the temporary work sector. These companies will be able to segregate payroll based on the type of work performed by their staff.
- Employers will be classified based on their predominant business activity, similar to the small employer rule. Predominance will be determined by which activity has the greatest proportion of assessable payroll.
- Rules pertaining to ancillary activity and contracting out will be eliminated (except, perhaps, for the temporary work agencies).
- And one of my favourite rules, the special operations rule, will be eliminated as predominant activity will be the test.
- Long latency diseases such as cancers will continue to have their costs assigned to the class level.
- The WSIB proposes to eliminate SIEF.
- The current CAD-7, NEER and MAP experience rating programs are to be replaced by an “Employer Level Premium Rate Adjustment” process.
- This will be a prospective experience rating plan for all employers who are currently experience rated (there will be no rebates or surcharges).
- Premiums will be adjusted up or down, or stay the same, on an annual go-forward basis.
- It looks like there will be a six-year accident cost window.
- Employers will be assigned a target rate, and move through dozens of risk bands (depending on the class) in 5% increments.
The initial phase of consultation is 90 days, ending on June 30, 2015. Phase 2 of the Consultation Plan will run from the summer of 2015 to the fall of 2015 to allow the WSIB to review submissions, and to assess stakeholder input on implications of the proposed initiative. The WSIB will hold a “What We’ve Heard” session in the fall of 2015 with key stakeholders/participants in the consultation process.
The OEA will be involved in this process, and welcomes any comments you may have.
The Rate Framework Reform process will significantly change how the WSIB assesses employer premiums, potentially for decades to come
Contact us for more information.