The WCB classifies employers based on the industry they do business in. This classification helps us in setting rates and determining premiums.
Like all workers' compensation jurisdictions in Canada, we classify employers based on the industry they do business in rather than by occupation.
Classifications are based on the industry as a whole because:
Classification by occupation would lead to multiple classifications for each employer. Determining each occupation for each individual would be difficult and time consuming, and would not materially change an individual business's premium. As well, it would increase the WCB's need to audit employers and subsequently the administrative costs needed to run the compensation program.
Rating by occupation alone would greatly increase the number of classifications we use. Each of these classification units would be far smaller than the current industry classes, leading to a less stable statistical base and the possibility of wide fluctuations in assessment rates.
In order to establish the premium rate an employer will pay, the Assessment Services Department ("ASD") needs to determine what kind of business activities an employer is engaged in. We take into consideration such things as processes, end products and services, classifications of competitors, etc. Based on this information, the employer is placed into the most suitable industry classifications.
Each industry classification is assigned a risk category based on the relative risk of the activity. This risk category dictates the lowest and highest premium rate most employers assigned to that classification will pay. Understandably, mining and logging firms pay higher premiums than flower shop owners due to the higher risk associated with those industries.
The WCB's premium rate setting system is based on collective liability and experience rating. Basically, this means most employers' premiums go into an "accident fund", which collectively, is used to pay the benefits of injured workers and the administrative costs of running the WCB.
An individual employer's premium rates are calculated by comparing that employer's injury experience (costs) to that of other employers who are of similar payroll size and who share the same level of risk. These rates are set annually based on an overall "average rate", which is determined by the WCB based on forecasted expenditures.
The costs of workplace injuries that relate to your firm's rate calculation are reflected in monthly Firm Experience Statements. If you have a question about a claim cost reflected on this statement, please contact our Claims Department at (204) 954-4922.