NLEC lobby to reduce WHSCC premiums saves employers millions

January 1, 2014 will mark the first reduction in workers’ compensation employer insurance premiums in this province since 2006. Due to a sustained lobby by the NLEC, the average employer insurance premium in Newfoundland & Labrador will drop by $0.30 to $2.45 per $100 of payroll for 2014, putting millions of dollars back into the hands of employers.

The Board of Directors of the NLEC made the decision to devote signifcant resources to the workers’ compensation fight in 2013, making it the most signifcant lobby effort in the association’s history. This reduction shows that government and the Workplace Health, Safety and Compensation Commission (WHSCC) Board of Directors finally realize that these high premiums are a problem in our province.

NLEC Board Frustrated

The NLEC Board of Directors is frustrated and disappointed that government also announced that the maximum compensable and assessable earnings (MCAE) limit will increase by more than $6000 to $60,760. This increase will affect new claims only, beginning January 1st. This means that for some employers, due to an increase in assessable payroll, the net revenue paid to the Commission will increase. However, this rate reduction is so significant that even with this MCAE increase an estimated 92% of employers will see a drop in the dollar amount paid to the Commission in 2014. A rough analysis by the NLEC puts the potential net savings to employers in WHSCC insurance premiums at an estimate of nearly $18 million a year, provided incident rates do not increase.

Workers’ Comp Fight Not Over

The NLEC’s fight on Worker’s Compensation is not over. There are still inefficiencies, inequities and loopholes within the system that must be addressed to ensure this rate reduction is sustainable, and to allow for further reductions, particularly in light of the increase in benefits. The NLEC hopes to see some aggressive legislative changes come out of the Statutory Review report providing the Commission with the legislative tools necessary to tighten up the system. The NLEC’s recommendations to Statutory Reviewincluded reducing the average length of time it take an injured worker to return to work in this province. Average composite duration of claim in Newfoundland & Labrador is 122.33 days – 57 days, or nearly double, the Canadian average. While reducing premiums is important, without addressing our alarming duration numbers reducing the costs of the system will never be possible long term. The NLEC will continue this lobby on your behalf.

For more details on the NLECs lobby to reduce worker’s compensation premiums in 2013-14, view our Annual Report. The NLEC Board of Directors congratulates all who played a role in lobbying for this reduction.

What does this mean for your business?

  • Average rates by sector should experience a decrease ranging from 3% – 21%, or approximately $0.14 to $0.69.
  • Individual employer rates will be provided in writing by the Commission in early January 2014. Rates will be available via connect online services before year-end.
  • Injured workers will continue to receive a maximum of 80% of pre-injury earnings, to a maximum of $60,760, for new claims only.
  • For employers with employees earning above the previous MCAE of $54,155, premiums will now be paid on all payroll (per $100) up to the new MCAE of $60,760.
  • For an employer paying the new average rate of $2.45, this will amount to close to $150 per employee per year at or over the threshold.
  • 99.8% of employers should see a reduction in rates in 2014.
  • 92% of employers should see a reduction in net dollar value paid to the Commission in WHSCC insurance premiums.

If you have any questions or concerns, or would like further information on this announcement, please contact the NLEC office.

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