Companies might be overpaying for workers’ compensation (and don’t even know it)
New Year’s Day is traditionally an occasion to celebrate, but for many New Brunswick businesses, January 1, 2018 was less festive than usual. That day was a cautionary reminder to organizations across Canada that one province’s amendment to its existing workers’ compensation rules could have a farther reaching impact.
That day, employers across New Brunswick started paying higher premiums for workers’ compensation, with premiums shooting up 15 per cent to a rate of $1.70 per $100 of payroll. This wasn’t the first time that companies would feel such a dramatic increase. Just one year earlier, organizations experienced a steeper jump of 33 per cent.
Joel Richardson, Chair of the Coalition of New Brunswick Employers,discussed the situation with CBC, explaining how some employers in the province were worried about having to lay off staff after two rate hikes in a row. This situation illustrated how quickly and dramatically workers’ compensation costs can change, and how deeply they can affect businesses and their employees.
Take control of your WC costs
Many organizations mistakenly view their WC premiums simply as a fixed cost of doing business, rather than a controllable cost. Some organizations will even pay their WC premiums without thoroughly reviewing statements and investigating further.
By conducting those investigations earlier and using services to predict events before you even get a statement from the provincial WC boards, you will take that control back. In fact, there are specific strategic actions that can be taken to definitively manage and lower WCB costs — no matter how they arise.
Here are three ways that you can reduce what your business is spending on workers’ compensation premiums.
1. Stay up to speed on provincial regulations
For organizations that operate in multiple provinces, it’s crucial that there is a clear understanding of the variances of the different WC rules and regulations as they vary across the provinces. If you outsource or work with an HR management company, it is essential that they are up-to-date and currently practicing on a provincial level. Working with a partner that has the knowledge to handle and interact with all provincial boards can take a lot of pressure off your team.
Staying informed about different provincial programs can also save you money. For instance, Manitoba’s WCB offers free employer workshops on crafting return to work (RTW) plans for injured workers, which can help them get back on the job sooner. In Alberta, employers can get a 20 per cent refund on their WCB premiums by taking part in the Partners in Injury Reduction program.
Meanwhile, employers in British Columbia are able to earn a Certificate of Recognition through WorkSafeBC if they implement an occupational health and safety management system (OHSMS) that meets provincial standards and passes an audit. The voluntary program encourages employers to take their OHSMS to the next level, and “recognizes employers that are proactive about improving workplace safety.” This is the only program in BC that employers can participate in to receive an incentive on their WC premiums, so it’s well worth exploring further.
2. Audit past occupational claims
Historical reviews of past occupational claims can also help organizations manage their workers’ compensation costs. An audit of these past claims can help return funds to your company by revealing inaccuracies, or areas where past claims can be reevaluated.
An experienced HR management company can be a great resource in conducting a thorough workers’ compensation claims audit. They are geared towards looking for and recognizing cost relief opportunities, omissions and errors, while providing consultation around the benefits of appealing or objecting a claim. By uncovering errors, they can also help object or appeal the individual claims — and that can reduce your premiums going forward.
Combing through past data also takes time and an experienced eye, so your HR management company can be an invaluable partner. Typically, they can also help review occupational claims three to four years in the past to look for cost relief opportunities, omissions, and errors. At that point, the HR management company should consult with you to determine whether or not it is financially beneficial to appeal a claim.
If your organization has recently acquired a new company, or if your business has a complex structure with different job titles, responsibilities and operating locations, an audit can also reveal inaccuracies in how you are registered with the WC board. For instance, upon conducting an assessment, it may be revealed that the business you had recently acquired isn’t in the correct rate group. Having this rate group assessment adjusted can save you money on your premiums.
3. Aim for prevention
Don’t turn your attention to Health and Safety only after a claim has been filed and an employee is already on extended leave. It literally pays to prevent workplace accidents and injuries. As an incentive to keep employees safe and healthy, many provinces charge lower WCB premiums for employers whose incidence of injuries and claims decrease over time.
Beyond striving for a safe and healthy workforce through preventative measures, companies should spend time looking through past claims to identify those opportunities for adjustments. Reviewing the overall workflow of how organizations handle a workers’ compensation claim can also help find efficiencies, improve the process, reduce time spent handling claims and prevent future inaccuracies.
The end-game is clear: the landscape in worker’s compensation is forever changing, province to province, and sometimes in unpredictable ways. Organizations that adopt a proactive posture in mitigating and understanding this changing landscape will lower costs and enjoy a competitive advantage over organizations who are missing the boat.