Earnings limit to increase for workers' compensation in 2013

Employers council says excessive regulatory costs hurt the economy, jobs, communities

Published on October 30, 2012
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The Workplace Health, Safety and Compensation Commission (WHSCC) has announced that the average assessment rate for employers in the province will remain at $2.75 per $100 of payroll for 2013.

But the maximum compensable and assessable earnings limit for injured workers will increase to $54,155. The WHSCC says the $2.75 average assessment rate per $100 of payroll will continue to include a 25-cent surcharge to address the unfunded liability of the injury fund.

The WHSCC said in a news release, about 60 per cent of employers will see a decrease in their assessment rates in 2013, while 40 per cent will remain the same or experience a slight increase. The average annual assessment rate has not increased since 2000 and has remained stable at $2.75 since 2006.

 Since 2000, the commission said it’s funded position has improved from 65.2 per cent to 91.8 per cent at the end of 2011.

Assessment rates are premiums paid by employers to cover anticipated costs of workplace injuries, return-to-work programs, prevention initiatives and the cost of administering the workers’ compensation system.

The WHSCC said the increase in maximum compensable earnings reflects a 2.4 per cent increase in the consumer price index (CPI).  Any injured worker whose earnings prior to being injured were at or above the new maximum compensable limit will be compensated based on the new limit effective Jan. 1, 2013.  

The Newfoundland and Labrador Employers Council (NLEC) says this province has had the highest workers’ compensation premiums of any province in the country for two decades and currently premiums paid by employers are 42 per cent higher than the average in the rest of Canada.

The council said in a news release, these  excessive regulatory costs hurt the Newfoundland & Labrador economy, jobs and communities and the NLEC believes it is time that government address this impact.

To back its case, the council references a recent study released by the NLEC in September, which was conducted by award winning economist Morley Gunderson, professor at the Centre for Industrial Relations and the Department of Economics at the University of Toronto,

Gunderson calls payroll taxes such as worker's compensation premiums “killers of jobs or killers of wages – pick your poison.” He said excessive regulatory costs cause Newfoundland and Labrador communities to suffer from lost investment opportunities and the jobs associated with those investments, as well as the negative image and reputation as being “unfriendly” to business opportunities.

“After two decades of being extremely uncompetitive on worker’s compensation employer insurance premiums, employers are frustrated and angry,” said NLEC executive director, Richard Alexander. “We understand that the commission is under financial pressure due to increasing health care costs, demographics and recent market fluctuations, but employers in this province cannot continue to be disadvantaged by these high regulatory costs. The inability to reduce premiums in any way this year just reinforces the fact that new legislation is required for worker’s compensation to make competitive premiums possible.”

The NLEC says it hopes that the ongoing statutory review of the WHSCC will focus on bringing costs in line with the Canadian average, and securing its financial sustainability. The council plans to make multiple recommendations through the statutory review process for legislative change to focus on reducing the cost of the system, while maintaining current benefit levels to workers.

The WHSCC, meanwhile, said notification of individual employer assessment rates for the coming year would be mailed to employers starting Tuesday.  A complete listing of the classification of industries and assessment rates for 2013 can be found in the publications section of the commission’s website at www.whscc.nl.ca/publications.whscc.

There are an estimated 12,000 injured workers and more than 18,500 employers in the province.