The Assessment Rate Setting System

The WCB's assessment rate setting system is based on a system of collective liability and experience rating. The costs of a single serious workplace injury could be enough to put some smaller employers out of business. That's why the premiums most employers pay go into the accident fund, which collectively, is used to pay the benefits of injured workers. Employers pay premiums or assessments, based on the level of risk associated with the industry they are involved in. Understandably, mining and logging firms pay higher assessments than flower shop owners due to the higher risk associated in those industries.

In simple terms, employer assessment rates are calculated by factoring the employer's injury experience and the collective injury experience of other employers who share the same level of risk.

Each year, the WCB sets assessment rates for employers. Assessment rates are calculated by examining the costs associated with a particular firm over the preceding 12 months. There are two kinds of costs:

• direct costs which are composed of wage-loss, medical aid and rehabilitation expenses for the firm's injured workers and
  
• indirect costs which are costs of running the workers compensation system that cannot be apportioned to any one claim, for example, administration.

These, along with a calculation that represents the collective injury experience of employers with comparable risk are used to determine a firm's assessment rate.

Click here for more information about the rate setting model and here for detailed information on rate calculation. For infomation about rates for new businesses, click here.