What factors are used to determine premium rates?
Your rates are calculated by considering three components:
- Insurable earnings
- Number of claims
- Claims costs
What years are considered when calculating my premium rate?
A rolling six-year period is used to calculate your premium rate. Specifically the six years prior to the rate-setting year.
For example, in 2021, we used the years 2015-2020 to determine your 2022 premium rate. During the course of that time, your insurable earnings, claims count and claims costs are the components reviewed and taken into consideration.
What are risk bands and how do they relate to premium rates?
Each class will have a set of risk bands and each risk band represents a rate in relation to the class rate. A rate is assigned to each risk band, either above or below the class rate. The difference between each risk band rate is approximately five per cent. Depending on your claims experience, your business will be assigned to a risk band that best represents your risk in relation to your class. Your assigned risk band rate includes rate adjustments based on your individual experience.
How does predictability impact premium rates?
Your predictability is a measure of how much your past claims experience and insurable earnings can be used to predict future outcomes.
A low predictability means a business’ insurable earnings and the number of past claims is quite low. In this case, your claims experience would not have a significant impact on your rate. Instead, your premium rate will be more influenced by the rates of your class to protect against volatility and the dramatic effect one claim could have on your rate.
Businesses with a higher number of allowed claims, claims costs and larger insurable earnings, have a higher predictability. In this case, volatility is not as high, as each single claim likely will not have a significant impact on your rate.
What is a class rate?
The class rate represents the premium rate for a given class based on the collective risk profile for all the businesses within the class and your class’s shared responsibility to maintain the insurance fund.
Can a business be assigned the class rate?
We assign the class rate to new businesses. Your business is considered a new business if you have less than 11 months of experience available in the review period. Once a business has 11 months or more of experience in the review period, their following year’s premium rate will be set based on their past insurable earnings and claims experience.
Businesses with experience similar to the class are also assigned the class rate.
How can I reduce my premiums?
The better your company’s health and safety record, the less it costs the insurance system. For this reason, the WSIB supports financial incentive programs that reward employers for good health and safety practices. Learn about our Health and Safety Excellence program.
You can also work with your peers to encourage industry-wide best practices for workplace health and safety, to lower the collective costs to the system by your class.
If you suspect that a business in your class is getting an unfair financial advantage by not registering with the WSIB, not reporting injuries or illnesses or not paying premiums, you can report fraud and abuse of the system.
What is a projected premium rate?
Your projected premium rate provides the future direction, up or down, that your premium rate is headed if there is no change in your individual and class experience from year-to-year.
Now that the 2021 rate hold is over, how does transition to the rate-setting model implemented in 2020 work?
We have updated our approach to smoothly transition all businesses to our rate-setting model following the rate hold in 2021. Any projected increases due to your individual and/or class risk and experience will be applied as follows:
- In 2022, businesses with a projected premium rate increase will move up a maximum of one risk band from their prior year risk band (approximately five per cent).*
- In 2023, businesses with a projected premium rate increase will move up a maximum of two risk bands from their prior year risk band (approximately 10 per cent).*
Any projected decreases due to your individual and/or class risk and experience will be applied in 2022 and 2023 (subject to transition funding, and other rate adjustments). Starting in 2024, our policies for premium rate setting under the new model will be fully in effect. Businesses with projected premium rate increases will move up or down a maximum of three risk bands from their prior year risk band (approximately 15 per cent),* until they reach their projected premium rate.
*In rare circumstances risk band movement may result in a rate change lower or greater than the approximate percentage indicated. Please see the FAQs on risk bands and yearly increases.
How are 2022 rates calculated for Temporary Employment Agencies (TEAs)?
All TEAs eligible for a reduction will see decreases to their premium rate and businesses with a projected premium rate increase will move up a maximum of one risk band from their prior year risk band (approximately five per cent).* Please note that a separate rate is calculated for each North American Industry Classification System (NAICS) class to which a TEA supplies labour, their activities classified in NAICS code 561320, and their non-supply of labour operations (if any).
*In rare circumstances risk band movement may result in a rate change lower or greater than the approximate percentage indicated. Please see the FAQs on risk bands and approximate yearly percentage increases.
How will 2023 rates be calculated for TEAs?
In 2023, TEA premium rates will be set using the same approach as all other businesses, as they were in 2022. A new rate-setting approach for TEAs will not be coming into effect in 2023.
All TEAs will receive their individual premium rate for 2023 this fall.
Our TEA consultation will help inform our analysis on the rate-setting approach for TEAs beyond 2023.
How are rates set for Non-Profit Organizations (NPOs) in 2022?
During the next three years projected increases related to your class and/or individual risk and experience will not be applied and your rate will be capped at or below your 2021 rate. Any projected decreases related to lower risk and/or experience will be applied to your account in 2022-2024.
Starting in 2025 through 2027, each year non-profit organizations can move a maximum of three risk bands down from their prior year risk band (approximately 15 per cent)* or a maximum of one risk band up from their prior year risk band (approximately five per cent).*
In 2028 and 2029, non-profit organizations can move a maximum of three risk bands down from their prior year risk band (approximately 15 per cent)* or a maximum of two risk bands up from their prior year risk band (approximately 10 per cent).*
Starting in 2030, our policies for premium rate setting under our rate-setting model introduced in 2020 will be fully in effect. Non-profit organizations with projected premium rate increases or decreases will see their rates move up or down a maximum of three risk bands from their prior year risk band (approximately 15 per cent),* until they reach their projected premium rate.
*In rare circumstances risk band movement may result in a rate change lower or greater than the approximate percentage indicated. Please see the FAQs on risk bands and approximate yearly percentage increases.
What is the prior year risk band?
For 2022, the prior year risk band is the risk band which contains the 2021 actual premium rate (referred to as “Your Rate” in the premium rate statement). Mine rescue charges, if applicable, are subtracted from the 2021 actual premium rate before determining the prior year risk band. Every prior year risk band has an assigned rate, called the prior year risk band rate, which is calculated annually to reflect changes in the class rate. The 2022 prior year risk band rate may be different from the 2021 actual premium rate.
Why did my rate increase by more than the approximate yearly percentage indicated in the rate-setting model transition approach?
Risk band movement may result in a rate change greater than the approximate percentage indicated in the transition approach depending on where a business’s rate falls in the prior year rate range. For example, your 2021 actual premium rate may have placed you in the lowest end of your risk band and changes in class/individual risk and/or experience have resulted in moving up to the next risk band resulting in a rate increase of more than five per cent in 2022. Alternatively, your prior year rate may have been so low that a one cent increase represents an increase greater than the approximate yearly percentage indicated in the rate-setting model transition approach.
The average rate increase for businesses with higher rates in 2022 compared to 2021, is 4.1 per cent.
What is transition funding and is it the same for all businesses?
It is a provision needed to cover costs associated with transitioning businesses smoothly to our rate-setting model implemented in 2020.
The transition funding adjustment is not the same for all businesses.
Transition funding adjustments are applied after a business’s rate has been determined. The total funding adjustment for the year is determined based on projected rate increases compared to the transition approach. Only those businesses with projected rate decreases from the prior year actual premium rate may be subject to a transition funding adjustment.
Can I get a detailed breakdown of how my premium rate was set?
You can request an extended statement that will provide you with details on how your individual premium rate was calculated, the adjustments made based on your claims experience and a breakdown of your claims costs.
To request an extended statement:
- Email firstname.lastname@example.org
- Call 1-800-387-0750
- Contact your Experience Rating Advisor if you were part of NEER or CAD-7
How will lost time and no-lost time claims impact premium rates?
When determining your premium rate, we will assess three components: insurable earnings, number of claims, and claim costs. All allowed claims, both lost time and no-lost time injuries, will be used to calculate premium rates. Lost time claims typically have higher claims costs and may increase premium rates accordingly.
I received my premium rate summary statement and do not agree with the rate, how can I appeal?
Your premium rate cannot be appealed, however, you can appeal any of the following components by providing supporting documentation that shows:
- Your insurable earnings are inaccurate
- A claim(s) that occurred should not have been applied to your account
- Your claims costs are incorrect
Temporary Employment Agencies
How will Temporary Employment Agencies (TEAs) be classified under the new NAICS classification structure?
TEAs will be classified under NAICS code 561320 (Temporary Help Services) for the business activity of supplying labour and you will report your office staff’s insurable earnings under this classification. Each class you supply labour to will also be added to your account, based on the reporting class information you provide to the WSIB.
How will TEAs transition to the new model?
To help you adjust to the new reporting obligations and administration under the new premium rate-setting model, we have implemented a one-year transition approach.
To determine the 2020 rates TEAs pay, we have compared your assigned starting point rate to the class rate of each of the NAICS classes you supply labour to. In 2020, if your starting point rate is equal to or higher than the class rate in a class you supply labour to, you will pay the class rate. You will pay your starting point rate if it is lower than the class rate.
Beginning in 2021, you will be assigned the class rate for each of the NAICS classes to which you supply labour, meaning the rates you pay will be more reflective of your clients' actual business and the associated risk.
For more information on the starting point rate, visit our understanding your 2020 premium rate page.
What are TEAs reporting obligations under the new model?
You need to segregate your earnings for each class you supply labour to and for your operations classified in NAICS 561320. If a temporary employee is going to different clients/industries each day, TEAs will need to segregate that person's earnings between all classes to which they are being supplied.
You also need to report on all of the classes to which you supply labour to ensure the right reporting classes are added to your account. If you add or remove a class to which you supply labour, you will need to provide supporting information to us to confirm a change has occurred, such as a client employer list with legal names and addresses. Further documentation may be requested if there is insufficient or incomplete information.
How can I determine my client employers’ premium rate setting classes?
Download our Businesses Classification Details data to search for your client employers' 2020 classifications. You will need the exact legal names of your client employers in order to find them on the spreadsheet. The data reflects all businesses registered with the WSIB as of April 30, 2019.
If you cannot find classification details for any of your client employers, it may be because they are not required to register with us, or may have registered after April 30, 2019. You can contact our dedicated TEA team to help determine your client employers' classification details by calling us at 1-800-387-0750, and then pressing two from our menu options.
Prior to calling, please have the list of client employers you were unable to locate with their full legal names, addresses and phone numbers.
Who are clients?
Clients are the businesses that TEAs supply labour to on a temporary basis for a fee.
Are TEAs required to provide coverage for the labour they supply to businesses not registered with the WSIB?
Yes, TEAs are required to provide coverage for all the labour they supply to clients, whether they are Schedule 1, Schedule 2 or non-mandatory business activities.
Do rules of association apply to TEAs?
Yes, the rules of association apply if a TEA supplies staff to an affiliated business. You are considered to be in a cooperative business relationship for the portion of labour you supply to the affiliated business.
In the new model, will there be a class similar to the current rate group 755?
In our new model, non-exempt partners and executive officers in construction, who were previously classified under rate group 755, will continue to receive a separate premium rate that reflects the low risk of their work in comparison to the rest of the construction industry.
How is the non-exempt partners and executive officers premium rate calculated?
The 2020 premium rate for non – exempt partners and executive officers in construction is based on the 2019 rate group 755 rate. Moving forward, your premium rate will be based on the collective experience of all non-exempt partners and executive officers in construction. You will gradually move towards a projected rate that is based on that collective experience.
I received my premium rate summary statement and my account was assigned to class G1- Building construction. Why does my classification differ from my business activity?
Your premium rate statement shows your business activity as class G1 to reflect your classification as non-exempt partners and executive officers in construction. In our new model, non-exempt partners and executive officers in construction were previously classified under rate group 755. They will continue to receive a separate premium rate that reflects the low risk of their work in comparison to the rest of the construction industry.
Prior to the new premium rate-setting model, my business activity was not classified as construction, why has my business activity been reclassified in construction?
Your business has been reclassified as a construction business activity based on the North American Industry Classification System (NAICS). NAICS is a more modern classification system that reflects the changes in industry composition and new industries that have come into existence.
What are the industry-specific requirements for businesses moving into the construction class?
As a business moving into the construction class, here are some industry-specific requirements you need to know:
What is the criteria for considering two or more businesses associated?
Two or more businesses will be considered associated if they meet the combined experience outlined under both the Test of Affiliation and Test of Cooperation.
For more information, view the Associated Employers policy.
If family members operate businesses that are separate and distinct from one another, are they considered associated?
If two or more businesses meet both the tests of affiliation and cooperation, they are considered associated. Just being affiliated with another business does not necessarily mean that the two businesses are associated.
When considering the test of Affiliation, what is the definition of ‘control’ in the case of a corporation?
A person, group of persons, or partnership controls a corporation if enough voting shares in relation to the holdings of other shareholders are held by or for the benefit of the person, group of persons or partnership, in order to elect a relative majority of the board of directors.
If I close and then re-open my business, will the WSIB transfer the insurable earnings and claims experience to my re-opened business?
Yes, if a business closes and re-opens within 12-months of the closure, the transfer of experience will occur even if the business registers the business under a new name, produces new articles of incorporation, or obtains a new WSIB account number.
The transfer of experience will occur if the reopened business substantially retains the same of any two of the following:
- business processes and equipment
- health, safety and disability management programs, and
- Management team.
What is a non-profit organization?
Non-profit organizations are associations, clubs, or societies that are not charities and are organized and operated exclusively for social welfare, civic improvement, pleasure, recreation, or any other purpose except profit.
Registered charities are charitable organizations, public foundations, or private foundations that are created and resident in Canada. They must use their resources for charitable activities and have charitable purposes that fall into one or more of the following categories:
- the relief of poverty
- the advancement of education
- the advancement of religion
- other purposes that benefit the community
How will a non-profit organization transition to the new model?
Non-profit organizations will be a part of an extended transition into the new model.
During the next five years, any rate decrease will be applied to your account and your rate will be capped at or below your 2020 rate.
Projected premium rates, which provide the future direction that your premium rate is headed – down or up – based on your individual and class experience from year-to-year, will not be reflected in your account during this period.
Retroactive rate adjustments
My business activities have changed. Can retroactive adjustments be made to my rate to reflect these changes?
If you have added, changed or deleted any business activities, or if you now meet the criteria for multiple premium rates, you may be eligible for a retroactive rate recalculation.
Adjustments can be made to your rate dating back to January 1 of the current year (or the year in which you notified us of the change).
What other changes can be made to my account resulting in a retroactive rate recalculation? How many years back can these retroactive adjustments be made?
You may be eligible for a rate recalculation if any of the following changes have been applied to your account retroactively. Adjustments can be made to your account dating back to January 1, up to three years prior to the current year.
Changes to account leading to debit or credit adjustments to your premium rate:
- interest charges are applied to your account
- a change in insurable earnings, including insurable earnings transfers from one business to another
- there is a change in your predominant class, including any predominant class changes resulting from a change in insurable earnings
- change in associated employer status
- non-compliance penalties
- status decisions for executive officers and contractors
- optional insurance
- claim count and/or claim costs due to a WSIB error
- earnings of non-registered businesses
- transfer of costs
Changes to account leading to debit adjustments to your premium rate:
- you previously provided incomplete or inaccurate information to the WSIB, or failed to act on information provided by the WSIB that directly affects your premium rate
- you declared your business to be exempt from compulsory coverage in construction under 'home renovation work' or claimed a 'partner or executive officer exemption' while performing construction work that is not eligible for the exemption
Changes to account leading to credit adjustments to your premium rate:
- Secondary Injury Enhancement Fund (SIEF) relief
- accident date changes
- claim amalgamation
- reversal of entitlement to a claim
What is the notification date?
For the WSIB’s audit area, the notification date for a rate adjustment is the date of the audit visit, or the due date indicated on the Notice of Audit.
For the WSIB’s other operating areas, the notification date for a rate adjustment is the receipt date of a request from a business, a business representative with valid authorization, or the date of a site visit documented in the business’s file.
Are there any other situations that may lead to retroactive rate adjustments?
In cases of court judgments and provisional premiums, debit or credit adjustments may be made in any prior year.
Debit adjustments may also be made in any prior year where non-compliance under the Workplace Safety and Insurance Act has been found (this includes claims reporting obligations and claims suppression).
Businesses who provide inaccurate or incomplete information and who have been identified as the result of the following may also have retroactive adjustments made to their account(s) in any prior year:
- the WSIB's information exchange agreements with the Canada Revenue Agency or other authorities or administrations
- Stakeholder Compliance Services referrals
- audit notifications and discoveries
- Action Line referrals (anonymous telephone calls)
- revenue recovery activities
- decisions resulting from worker status reviews, or any other means of identification
For additional details on retroactive adjustments, see Policy 14-02-06 Employer Premium Adjustments.