Experience rating (ER) is supposed to encourage employers to make their workplaces healthier and safer and encourage return to work. In reality, there is little to no evidence that experience rating accomplishes these goals – the WCB/WSIB’s own reports from the 1980s onwards have cast doubt on the ability of ER systems to create safe workplaces. On the contrary, experience rating is bad for workers because it provides employers with strong financial incentives to minimize claims costs.
New framework ignores “moral crisis”
Professor Arthurs’ 2012 report on WSIB funding identified the experience rating system as a “moral crisis” that must not be ignored and called for radical change or termination of the related programmes. Instead, the Board commissioned another report (2014) by Douglas Stanley which recommended embedding experience rating even more deeply into the system to achieve “insurance equity.” In 2015 the WSIB introduced a rate framework reform consultation.
Experience rating is the practice of adjusting an employer’s assessment (premium) rate based on its claims costs (and sometimes number of claims). Previously the Board’s experience rating programs imposed extra fees (surcharges) on employers who perform worse (that is, have higher claims costs) than other employers in the same class of industry or occupation. Employers who have claims records that are better than other employers in the same class received partial refunds (rebates).
Same game under any other name….
The WSIB ‘s new Rate Framework (in effect Jan 1, 2020) has expanded experience rating, making it the key factor in rate setting. For more information about the Board’s framework see “What Workers Should Know”. Replacing all existing experience rating programs, the framework uses claims experience more directly in setting a employer’s premium rate. Employers with lower claims costs will be placed in a lower “risk band” and pay a lower rate, while employers with higher costs will move up the scale to a higher “risk band” and pay a higher rate. There will be fewer classes of employers (currently called rate groups) and so claims experience will be the main factor in determining what an employer pays.
Submissions from injured worker advocates on the 2017 draft policies highlighted that the Rate Framework promotes premium rate equity (not a permitted purpose under the Act) and that the policies continue to ignore :
- the incentive under experience rating to avoid premium increases by using temporary workers for more dangerous work
- the incentive for claims suppression (and the many forms it can take) by basing premium rates solely on claims costs rather than classification and actual health and safety practices
- integrating measures to promote health and safety into the rate framework
- Experience Rating Working Group. 2018 Jan. 18. Submission re Rate Framework Policy Consultation
- Experience Rating Working Group. 2015 Oct. Submissions to the WSIB Rate Framework Reform Consultation‘ and 2016 Mar Letter to WSIB Chair on the Consultation’s response to worker concerns.
- Injured Workers’ Consultants. 2015 Nov. Submission re Bill 109, Employment and Labour Statute Amendment Act 2015 (how to better effectively address claims suppression)
- Ontario Network of Injured Workers Groups. 2015 Oct. From Experience Rating to Rating Experience
- IWO Backgrounder. 2015 Mar. Experience Rating [pdf] – [Word version]
- Schwartz, Joel. 2014. Rewarding Offenders: Report on How Ontario’s Workplace Safety System Rewards Employers Despite Workplace Deaths and Injuries. Toronto: Ontario Federation of Labour.
- Experience Rating Working Group. 2011. Experience Rating: An Addiction Looking for a Rationale? Toronto: ERWG. (Submission to the WSIB / WCB Funding Review)