WorkSafeNB Increases Employer Premiums By 33% / Employers Push Back, Offer Solutions and Affect Positive Change

As noted in the Fall of 2016, WorkSafeNB announced a 33% increase in the average employer assessment rate for 2017.

This excessive increase was done without employer consultation or notification and thus, it mobilized the employer community to push back against the increase. Retail Council of Canada (RCC) worked with the Coalition of New Brunswick Employers to uncover that much of the premium increase is due to inadequacies in the province’s Workers’ Compensation Act. These inadequacies became apparent following the creation in mid-2015 of an independent Workers’ Compensation Appeals Tribunal (WCAT). WCAT does not have a mandate to consider the overall health of the workers’ compensation system and thus, the shortcomings of the Workers’ Compensation Act unwittingly gave WCAT too much power to overrule WorkSafeNB decisions. Overruling WorkSafeNB decisions quickly increased immediate and future costs to the system. Further troubling was the realization that there was little in the current legislation to prevent WCAT decisions from being retroactive.

Workers’ compensation is an insurance program that must follow strict rules regarding its balance sheet and thus, there was nothing that employers could do to reverse the rate increase for 2017. Instead, RCC worked with the Coalition and WorkSafeNB to successfully convince government to make changes to the Act that will protect industry from future rate shocks.

Background:

After years of being partners in a New Brunswick workers’ compensation system that was fully funded, had six consecutive years of declining rates, and was seen as a model for the rest of the country, it was deeply concerning to see this increase occur without consultation.

The system began to change two years ago with a minor increase in the province’s accident rate combined with the government’s legislative changes that created an independent WCAT. RCC did not oppose the creation of WCAT as industry was not aware of the inadequacies with the Workers’ Compensation Act that would be exploited by WCAT decisions. RCC did successfully oppose WorkSafeNB’s legislative recommendation to increase benefits and reduce the waiting period from three to two days before a claimant can access benefits.

Since the creation of an independent WCAT in August 2015, the Tribunal has overturned many WorkSafeNB decisions that have changed benefit policies and impacted WorkSafeNB’s liabilities by an estimated $87 million (payable over eight years). The manner in which WCAT is interpreting the legislation has allowed it to wield too much power while severely limiting the policy making authority of WorkSafeNB. Evidence of this inequity is seen in the fact that in the past 16 months, WCAT decisions have resulted in worker appeals being successful (in whole or in part) over 92% of the time. This is a 15% increase over the five-year average (2009 – 2013) for employer and worker appeals combined.

The Coalition was able to push the New Brunswick government to pass legislation in December 2016 that amended the Workers’ Compensation Act and will provide some much needed relief to employers. For instance, Workers’ Compensation Pension Benefits have now been changed so that the annuity set aside will recognize that risk must be taken by the injured worker as well as WorkSafeNB. This means that the benefits will be subject to the rate of return, whether positive or negative. The legislation also improved the fairness of the appeals process by allowing WorkSafeNB to appeal a WCAT decision even if they were not present at the initial hearing.

The Coalition also succeeded in securing a commitment from WorkSafeNB to withdraw its recommendation for an immediate increase in benefits and the reduction of the waiting period before accessing workers’ compensation benefits.

Taken together, all of these changes should bring more balance to the system and limit future premium increases to more manageable levels.

Next Steps:

RCC will continue working with the Coalition of New Brunswick Employers and WorkSafeNB to push for the government to make additional legislative amendments this spring. The proposed amendments deal with legislative language surrounding the Canada Pension Plan Disability benefit calculations, estimated capable earnings and non-compensable intervening conditions which could provide approximately $55 million in liability relief to employers. The Coalition is advocating a requirement for WCAT to provide WorkSafeNB with prior notice if it intends to overrule any WorkSafeNB policies and give WorkSafeNB an opportunity to comment before the rendering of any decision.

RCC will continue to advocate on behalf of members for a workers’ compensation system in New Brunswick that is fair with predictable, affordable and with sustainable costs. Such a system is needed to protect employees, safeguard jobs and improve the business environment.

NOTE: See Appendix A for statistics regarding assessment rate changes in the Atlantic Provinces.

If you have any questions or concerns, please don’t hesitate to contact: Jim Cormier, Director (Atlantic) at: jcormier@retailcouncil.org or (902) 422-4144

Appendix A – Statistics

The average assessment rate for New Brunswick retailers is detailed below. The comparison between the 2016 and 2017 rates is telling, especially when considering the fact that rates had been declining since 2010. There is a closer comparison between New Brunswick’s 2017 rates and the 2017 rates in the other Atlantic Provinces. However, it should be noted that the rates in the other Atlantic Provinces have been declining.

New Brunswick:
Liquor Stores, Gen Merchandise Stores, Supermarket and Grocery Stores:
2017 Rate: $1.60
2016 Rate: $1.16
2010 Rate: $2.29

Consumer Goods and Miscellaneous Retailers:
2017 Rate: $0.88
2016 Rate: $0.68
2010 Rate: $1.18

Food Beverage and Health Stores:
2017 Rate: $0.56
2016 Rate: $0.39
2010 Rate: $2.18

Prince Edward Island: 2017 Rates:
All retail stores, except furniture, appliance, TV, stereo, cellular, electronics, flooring, drapery stores: $0.92
Furniture, appliance, TV, stereo, cellular, electronics, flooring, drapery stores: $1.73
Auto repair, tire shops: $3.62

Newfoundland and Labrador: 2017 Rates:
Liquor /Beer Stores: $1.80
Most retail stores (including pharmacies): $1.21
Household Furnishing, Appliance Stores: $2.36
Supermarket: $2.72
Grocery and General Merchandise Stores: $1.27

Nova Scotia: 2017 Rates:
Liquor Stores, Gen Merchandise Stores, Supermarket and Grocery Stores: $1.93
Consumer Goods and Miscellaneous Retailers: $1.16
Food Beverage and Health Stores: $0.49