The WSIB Rate Model Has Changed
On January 1, 2020 Ontario’s Workplace Safety Insurance Board (WSIB) introduced a new rate model for setting employer premiums.
WSIB is an arm’s length provincial agency responsible for workplace compensation claims. Like other workplace compensation agencies in Canada, it is funded by employer premiums and administration fees. It covers over 5 million Ontario workers across 300,000 workplaces.
The new WSIB rate model seeks to simplify job classification, winnowing the framework from 155 groups to 34 classes and subclasses. It is based on the North American Classification System (NAICS), which classifies businesses by economic activity. As a result, WSIB classes are easier to understand but less specific.
WSIB sets employer premiums based on your industry’s risk profile and the history of your business. The rate model is applied through a two-step process:
- They set average premiums for each industry, classified by NAICS code. This risk profile is based on an analysis of claims by real businesses over their 100 years of operation.
- They compare your claim history, going back six years, to that of other businesses in your industry and place you in a risk band. The mid point of a risk band 60. If your business is assessed below 60 your premiums will decrease; if your business is assessed above 60 your premiums will increase.
- In setting your rate, WSIB also considers the size of your business. Larger businesses may find themselves in higher risk bands, because with a larger workforce the chance of a workplace accident increases.
The intent of the new WSIB rate model is to ensure fair premiums for every business. However, under the simplified structure some businesses have seen their premiums go up. And because one rate is applied to your whole workforce, no matter the job description, for some businesses that increase has been a challenge. To ease the transition, businesses with large premium increases will see it phased in over the next three years.
You can find WSIB’s updated Employer Classification Manual here.
