WSIB Rate Framework Change

On January 1, 2020 the Ontario Workplace Safety and Insurance Board (WSIB) will introduce a new rating system which will change the way premium rates are calculated across the province.

New North American Industry Classification System (NAICS)

According to the WSIB they are moving away from the current classification structure to the North American Industry Classification System (NAICS) to simplify and make it easier for employers to understand how they are classified. The new model will help simplify and streamline the WSIB classifications from 155 rate groups to 34 rate classes. The WSIB will use a two-step approach to set and adjust the rates for employers.

  1. The first step involves setting the average rate for each industry class based on their risk profile and share of responsibility to maintain the insurance fund.
  2. The second step will adjust individual rates by looking at the individual claim history and how it compares to the rest of businesses in the same class.

Under the new framework, a starting point class rate will be determined based on the Average Premium Rate for all employers within that class.  Each class will have a series of “risk bands” with an associated rate either above or below the class rate. Each employer will be assigned to a risk band that represents their risk in comparison to other employers in their class. Individual rates will be adjusted based on their individual experience either above or below the class rate, based on their individual experience. If the class rate changes as a result of the overall claims experience of that class, it will impact the risk band rates within that class. Therefore if the number of claims and cost go up for example, your rates will go up and if the number of claims and cost goes down, your rates will go down.

How premium rates are set and adjusted

The new framework will simplify, and bring consistency to how premium rates are set and adjusted. Employers with more than one business activity will be classified according to the activities of their predominant business – the business activity with the highest amount of insurable earnings.  The new framework will also ensure that the premium an individual employer pays accurately reflects their risk and claims experience eliminating the possibility for any future additional surcharge or rebate. The new framework also allows for predictability of future rates allowing employers to plan ahead for their business.

Learn more about the WSIB Rate Framework Change:

For more details or greater insight into the WSIB’s new premium rate-setting model, please visit their website:
https://www.wsib.ca/en/businesses/premiums-and-payment/rate-framework

To review details on how your business is being classified under NAICS visit: https://safetycheck.onlineservices.wsib.on.ca/safetycheck/ecm

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