Rate Framework: FAQs

Our new model

What are the benefits of the new model?

Our new premium rate-setting model will make it easier to understand how businesses are classified, how your rates are set and better reflect your individual risk and claims experience.

See your 2020 premium rates.

Classification

What is NAICS?

We are moving from our current classification structure to the North American Industry Classification System (NAICS). It is a North American standard and is already used by Statistics Canada and the Canada Revenue Agency. NAICS streamlines our classifications from 155 rate groups to 34 classes/subclasses.

Where can I review my classification?

Prior to 2020, you can review your classification in our Employer Classification Manual (ECM). The new ECM will provide a list of all the classification categories under NAICS and their corresponding descriptions.

I currently have different business activities and pay separate premium rates. Will I continue to receive multiple premium rates under the new model?

In the new model, businesses with multiple business activities are assigned a class and a rate based on their predominant business activity - the business activity with the highest insurable earnings.

Businesses that have more than one business activity, that appropriately separate their payroll and meet the multi-rating criteria, can be assigned multiple premium rates. For more information on how we determine if a business qualifies for multiple premium rates, refer to Policy 14-01-07 Single and Multiple Premium Rates (PDF).

What should I do if my business activities have changed?

You should advise us of any material changes within 10 days (for example, changes in: insurable earnings, business activities, ownership, etc.), and we will make the appropriate changes to your account. These changes may affect your classification and premium rate under the new model, since your premium rate is based on your business activity, insurable earnings and claims experience. Any potential adjustments to your premium rate due to a change in classification, will be communicated in January 2020.

Premium rate-setting

What factors will be used to determine premium rates under the new model?

In the new model, your rates will be calculated by considering three components:

  1. Insurable earnings
  2. Number of claims
  3. 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 2019, we will use the years 2013-2018 to determine your 2020 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?

In our new model, classes will have a set of risk bands, where 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.

Starting in 2023, our policies for premium rate-setting under the new model will be fully in effect. Generally, businesses with projected premium rate increases will see their rates increase up to a maximum of three risk bands per year, until they reach their projected premium rate. Businesses eligible for decreases will see their rates decrease up to three risk bands per year until they reach their projected premium rate.

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.

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.

What is starting point rate?

In the new model, each business will be assigned a starting point rate that reflects their claims experience and 2019 rate group rate. Our transition rules will be applied to the starting point rate a business receives in determining the 2020 premium rate that they will pay.

We will take into consideration whether or not your business was previously in an experience rating program, when calculating your starting point rate.

How will businesses transition to the new model?

To help you smoothly transition into our new model, any initial projected rate increases will be staggered over time and any rate decrease will be applied immediately.

Businesses with projected premium rate increases

In 2021, businesses with projected premium rate increases will move up a maximum of one risk band from their 2020 risk band.

In 2022, businesses that have not yet reached their projected premium rate will move up a maximum of two risk bands above their 2021 risk band.

Businesses with projected premium rate decreases

Any projected rate decreases have been applied to your 2020 rates. This will also happen in 2021 and 2022.

Starting in 2023, our premium rate setting policies under the new model will be fully in effect. Businesses with projected premium rate increases or decreases will see their rates move up or down a maximum of three risk bands each year until they reach their projected premium rate, protecting them from any sudden changes to their premium rates.

Can I get a detailed breakdown of how my 2020 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:

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.

My business is currently ineligible for a potential rate adjustment, what does this mean and how do I become compliant?

Your business is ineligible for a potential rate adjustment as payroll reporting has not been received for one or more years in the review period (2013-2018). As a result, provisional insurable earnings has been applied to those years.

To become compliant and eligible for a rate recalculation and potential rate adjustment, please contact us at 1-800-387-0750 or employeraccounts@wsib.on.ca.

Once your account has been reconciled and you are compliant, we will help you smoothly transition into our new model by staggering any initial projected rate increases over time. Any projected rate decreases will be applied to your rates.

What are provisional insurable earnings?

Provisional insurable earnings are an estimate of a business’s insurable earnings, when a business has not reported their payroll in more than one period in the preceding year, and the account has not been reconciled at the time of rate calculation.

If the transition rules state that any initial rate increase will be staggered over time, why is my starting point rate higher than my 2019 rate?

Your businesses starting point rate could be higher than your 2019 rate if, you have experienced a NEER or CAD7 surcharge or a MAP increase during calendar years 2016 to 2018.

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 for 2016 through 2018
  • A claim(s) that occurred between 2013 to 2018 should not have been applied to your account
  • Your claims costs are incorrect from 2013 to 2018

Construction

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.

Associated Employers

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:

  • employees
  • clients
  • suppliers
  • business processes and equipment
  • health, safety and disability management programs, and
  • Management team.

Temporary Employment Agencies

How will 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. You will receive separate rates reflecting the class rate for each class you will supply labour to in 2020, if this information was provided to the WSIB following a communication sent to you in December 2018. If you haven’t provided details on the businesses you will be supplying labour to, you will be classified as class G3, the highest class rate, until we receive further information regarding your account.

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 a non-mandatory business activities. 

Can a TEA have multiple rates?

Yes, TEAs will receive a separate rate for each of the classes and subclasses you supply labour to if you have provided these details to the WSIB. The rate you are assigned for each class you supply labour to is the class rate.

If you have not provided details on the businesses you will be supplying labour to, you will be assigned to class G3, the highest class rate, until you provide us with this information.You may also have NAICS codes assigned for the non-supply of labour.

If a client’s class changes, will the TEA account be impacted?

Yes, if you are supplying staff to a client and that client’s class changes, you are required to report the new class. This is effective going forward from the date the TEA is made aware of the change.

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. 

Are TEAs required to maintain separate payrolls?

Yes, TEAs must maintain separate payrolls and wage records, for each class they supply labour to and for their operations classified in NAICS 561320. You must also keep segregated records for any business activity not related to supplying labour. If you do not separate your insurable earnings, you will be assigned a single premium rate based on either the class you supply labour to or the highest class rate of your other business activities.

Non–profit organization

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.