The Prince Edward Island (PEI) Department of Environment, Labour and Justice will bring forward a series of amendments to the Worker’s Compensation Act that will result in employer cost increases but will still keep rates competitive and the system harmonized with neighbouring provinces.

The PEI Worker’s Compensation Board (WCB) released its employer assessment rates for 2014.  For most employers, the rates are going down.  The only exception for the retail sector is furniture and appliance stores, which have been moved into a new rate group that has resulted in an increased assessment rate.  The PEI WCB has stated that it has already notified the province’s furniture and appliance stores to inform them of the rate increase.

For 2014, the average assessment rate of all rate groups will be $1.90, which is $0.07 cents lower than it was in 2013.

The proposed amendments will also remove the mandatory five year review of the system as the government and the WCB would like to have the ability to conduct reviews as needed.

The government is committed to these changes, which will be more generous to workers but still compare favorably to neighbouring jurisdictions.  The changes will also ensure the long term health of the system.

Action Plan:

RCC has expressed its concern to Hon. Janice Sherry, Minister of Environment, Labour and Justice regarding the changes to the Worker’s Compensation Act.  RCC’s expressed concern is intended to caution the government to not use these changes as impetus to end stakeholder consultation while making future changes that will result in considerable costs to employers.

Member To-Do:

Members are encouraged to voice their concerns to Minister Sherry directly.  Members are welcome to use the form letter attached to this Member Notice.

Members should be aware that the PEI WCB stated that improper lifting is the main cause behind workplace claims in PEI’s retail sector.  The PEI WCB noted specifically that injuries due to lifting are the main reason behind the Furniture and Appliance retailers being moved into a new and more expensive rate group.

What RCC Did / Next Steps

RCC participated in the PEI WCB’s stakeholder consultation in 2012 and 2013.  RCC expressed concern with any proposed action to increase employer costs while limiting stakeholder consultation.

RCC has consulted with other industry associations in PEI on these issues.  The general consensus is that no association will speak favorably regarding these changes however, opposition will be somewhat muted due to the fact that the changes will help to ensure the long term funding status of the Board and the rates are still competitive with neighbouring provinces.

RCC will reach out to its members in Furniture and Appliance stores to see if they are interested in working as a group and with PEI WCB to share best practices in improving on accident rates in the workplace.

Background:

The changes to the WCB Act would:

  • Maintain fully funded status for the Workers Compensation Board.  The Board considers ‘fully funded’ as being 100-110% funded.  The proposed changes oblige the Board to be fully funded.  If the PEI WCB fell below the acceptable level of funding, the Board would be obliged to present the government with a plan to achieve fully funded status within a defined period of time.
  • Reduce the wait time for claims from three to two days (NS is 2 days – it’s a deductible of 2/5th a weekly wage for someone who works a 5 day work week, NB is 3 days).  No other province has a wait time before claims begin.  Actuaries for the government were not able to estimate the cost of this change on the system.
  • Increase wage loss benefits from 80 per cent to 85 per cent of net insurable earnings (NS is 75% for first 26 weeks and 85% thereafter) (NB is 85%).  Under the current system in PEI, a worker would be eligible to receive 80 per cent of their wages for the first 38 weeks and 85 per cent after 38 weeks.  Actuaries for the government have stated that this change will cost the system an estimated two cents on the rate, which has already been factored in to the proposed 2014 rates.
  • Increase the indexation of benefits from 75 to 80 per cent of the Consumer Price Index (CPI).  (NS: indexation of benefits is 50% of the change in CPI while in NB: benefits are increased by the annual percentage increase in CPI from June of the current year to July of the previous year).  Actuaries for the government have stated that this change will cost the system an estimated one cent on the rate, which has already been factored in to the proposed 2014 rates.
  • Remove the five year mandatory review of the WCB Act to provide flexibility for changes to be made as needed.  Department of Labour staff noted that the Board currently has a special mandate to allow them to conduct a review before the end of the five year period.

 

The changes in the WCB Employer Assessment Rates are as follows:

Sales and Service Sector (Encompassing Rate Groups #101-#105)

Rate Group

2013 Rate

2014 Rate

101

$0.34

$0.32

102

$0.95

$0.94

103

$2.09

$1.93

104

$3.98

$4.30

105

$6.84

$6.17

For 2014, Furniture and Appliance stores will be moved from Rate Group 102 to 103. In 2013, they were paying $0.95 in Rate Group 102.  In Rate Group 103, the rate is $1.93.  However, WCB PEI will limit the 2014 increase to a capped amount of 20% of $0.95 which equals $1.14.  The Furniture and Appliance stores will be reviewed each year but usually, the members of a Rate Group stay where they are for 3 years.

All RCC retail members would fall into one of these rate groups.  eg: Grocery retailers and Department stores fall into Rate Group #102.

Should RCC members wish to receive further information on any issues related to the PEI WCB, they are encouraged to either contact Mr. Greg McCallum, Manager Employer Services for PEI WCB at 902-368-5697 or Jim Cormier, Director (Atlantic) for RCC at the coordinates listed below.

If you have any questions or concerns, please don't hesitate to contact Jim Cormier at: [email protected] or (902) 422-4144