Construction stakeholder reaction is mixed over upcoming WSIB changes in how premium rates will be set and business will be classified under the board’s new model coming into effect next year.
“We’re nervous,” said Andrew Pariser, vice-president of the Residential Construction Council of Ontario (RESCON). “The builders want more lead time, they want to understand what the changes are, they want the real numbers and they want more time to implement it … We do recognize that WSIB provided information and there has been stakeholder engagement, but people just don’t understand the new system. Our fear is it’s nice that we are getting a look in September with the new rates but between September when they’re released and January that is not a lot of lead time.”
The new WSIB (Workplace Safety and Insurance Board) rate framework, which comes into effect Jan. 1, 2020, aims to streamline and make it easier to understand how businesses are classified, better reflect individual claims experience and help businesses plan for the future by providing projected rate information, explained the WSIB.
“Now we will be providing people not just their rate for the individual year, but also their projected rate, which is the direction that their rate is going based on their individual experience and the experience of the class that they are in,” said Janine Dyck, vice-president, employer account services, WSIB.
Businesses will receive their 2020 individual and class premium rates in September before the changes are implemented in January. Employers will receive a letter which outlines the rate framework and the changes to the WSIB’s premium rate structure, and they will also receive their annual statement which shows what their rate will be for 2020 and will include their updated classification under the new model, said Dyck.
The Council of Ontario Construction Associations has been supportive of the new rate framework throughout the process, said association president Ian Cunningham, adding, in general, construction will benefit from the new system.
“No initiative like this is perfect or is going to be without its opponents but in general they are moving from an outdated system to the more modern system,” said Cunningham, adding overall the new system motivates companies implement health and safety management systems to reduce claims and rates over time.
Cunningham explained that companies that currently have multiple rates based on two or more work activities could end up with an overall higher rate if their predominant activity based on payroll is lower rated. But most construction firms will benefit he said.
RESCON asked the WSIB to provide shadow rates to help everyone understand how companies will be affected before it’s put into place but that never happened. As an example of shadow rates, he pointed out some utilities, before changes are made, show you your rate before and show you your rate after in advance of the actual change.
“It would have been a better way to engage employers and stakeholders,” said Pariser. “It also would have allowed if there are any mistakes for those mistakes to be identified before the switch over.”
A change to the model specific to the construction industry is that non-exempt partners and executive officers in construction who were previously classified under rate group 755 will continue to receive a separate premium rate that reflects the low risk of their work in comparison to the rest of the construction industry.
“Essentially what it does is recognize that not all participants in a construction company are actually on the tools and so the risk that they bring to insurance and to the insurance system is much less than somebody who would be on the tools,” said Dyck.
“Because we don’t have rate groups under the new model, we have classes, there will be a rate that non-exempt partners and executive officers in the construction industry will be charged which will be reflective of the rate group 755 concept.”
The 2020 premium rate is based on the 2019 rate group 755 rate and moving forward, it will be based on the collective experience of all non-exempt partners and executive officers in construction.
The WSIB will be using the North American Industry Classification System (NAICS), which is already used by the Canada Revenue Agency and Statistics Canada. Using NAICS will allow WSIB to move from 155 different rate groups to 34 classes/subclasses. A new Employer Classification Manual is now available which outlines details on how your business is being classified.
In terms of making premium rates easier to understand, WSIB will set an average premium rate for each class based on its risk profile and share of responsibility to maintain the insurance fund, states the WSIB website.
Each NAICS class will then be broken down into a series of risk bands, and each risk band will have an associated premium rate. WSIB will look at your specific claims history to create a risk profile that compares your risk to the rest of the businesses in your class, adds the website.
More information is available at www.wsib.ca/rateframework.
(Editor’s Note: This is an updated version of this story which originally ran on Aug. 26.)