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Risk categories and movement

An industry classification is made up of a group of employers who operate in a similar industry with a similar level of risk. Each industry classification is assigned a risk category that describes their cost of injuries compared to the system average. The purpose of grouping together employers into an industry classification with similar business activities and similar levels of risk is to assist in setting fair and equitable assessment rates that best reflect the collective liability of that group.

Employers are also grouped according to their average payroll, as outlined below.

The size of your business affects the range of rates you might pay above or below your industry classification’s base rate, as well as how your business’s claims costs and your industry’s claim costs are blended to calculate your rate.

 

Small
employers 

Medium
employers 

Large
employers 

The percentage of your individual experience used to calculate your rate

20%

30-40%

40-100%

The percentage of your classification’s experience used to calculate your rate

80%

60-70%

0-60%

Each industry classification is assigned to a risk category based on claim cost trends over a period of several years. The risk categories are set as a percentage of the average assessment rate. For example, the average assessment rate is $0.95 and the risk category is 200%, the risk category base rate is 200% of $0.95 or $1.90. The risk categories are:

15%33%60%125%250%500%
20%40%75%150%300%600%
25%50%100%200%400%800%

Industry classification movement

The WCB monitors industry classification forecast rate annually to determine proper risk category placement. Industry classifications are limited to one risk category move every two years.

When an industry classification changes risk category, all employers, including large employers, in that industry classification are similarly affected. When an industry classification is moved to a new risk category, the large employers maintain their position relative to the industry classification risk category. For example, if a large employer is one risk category above its industry classification risk category, the large employer also moves down a risk category when the industry classification moves down a risk category.

An industry classification may be moved to a different risk category if certain criteria are met.

If an industry classification forecast rate is below or above the base rate of the next adjacent risk category for four consecutive years, the industry classification may be eligible to move to that risk category.

The time period for moving to a lower risk category will be reduced to three consecutive years, if the industry classification has an industry-based safety program with 50 per cent or more of the relevant payroll that is SAFE Work Certified and has a forecast rate that is below the base rate of the next adjacent risk category for three consecutive years.

Large employer movement

Annually, large employers forecast rates are monitored to determine proper risk category placement. Forecast rate is a blend of an employer’s own experience and that of their industry.  Forecast rates are the best estimate of a rate required to cover an employer’s expected claim costs along with its share of collective and administrative costs.

A large employer may be moved to a risk category different from its industry classification if certain criteria are met: 

  • If the forecast rate is below or above the next adjacent risk category base rate for four consecutive years, the employer may be eligible to move to that risk category. SAFE Work Manitoba certified employers may be eligible to move down a risk category in three years if their forecast rate is below the next adjacent risk category base rate. 
  • Where a large employer has cost experience lower than its industry’s cost experience, the WCB will provide notice to the employer advising them that continued positive experience could result in moving to a lower risk category. Before any large employer is moved to a lower risk category, the WCB will ensure that the employer can demonstrate good practices in safety and health, claim reporting, return to work, and that there are no outstanding issues of non-compliance. 
  • Where the employer has cost experience higher than its industry’s cost experience, the WCB will provide notice to the employer advising them that continued poor experience could result in the employer moving to a higher risk category. An employer in this situation may be referred to SAFE Work Manitoba or to its industry-based safety program for support in workplace injury prevention, or to the WCB’s Return to Work Program Services for support with return to work. 

Large employers are limited to one risk category move every two years and further restricted to moving no greater than six risk categories away from its industry classification risk category. 

In addition to large employers moving to a different risk category from its industry classification, all employers regardless of size may experience a change to their industry classification risk categories as a result of changing cost experience among the industry classification.

To learn more about the criteria for risk movement, view the WCB’s Rate Model Policy 31.05.05.

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